1 00:00:11,910 --> 00:00:15,550 Hello and welcome back to the SAP Learning Insights podcast. 2 00:00:15,630 --> 00:00:18,670 Today, we're revisiting a topic introduced over two years ago, 3 00:00:19,150 --> 00:00:23,350 Sustainability within the SAP ecosystem, featuring our expert 4 00:00:23,350 --> 00:00:26,350 Michael Jordan. Last time, we discussed the 5 00:00:26,350 --> 00:00:29,950 basics and broader impacts on businesses of Sustainability 6 00:00:29,950 --> 00:00:33,200 within the SAP ecosystem. In this episode, we're going to 7 00:00:33,200 --> 00:00:36,520 focus on recent changes and how newcomers to SAP can leverage 8 00:00:36,520 --> 00:00:38,440 these insights as they grow their careers. 9 00:00:38,920 --> 00:00:40,400 Great to have you back on board, Michael. 10 00:00:40,560 --> 00:00:43,360 How are things on your side? Oh, super, really interesting. 11 00:00:43,400 --> 00:00:46,080 I mean, always very, very busy. There's so much happening in the 12 00:00:46,080 --> 00:00:48,720 sustainability world, and I don't think that's going to ever 13 00:00:48,720 --> 00:00:51,480 change until I retire. Job security. 14 00:00:51,800 --> 00:00:53,560 Job security. Perfect. 15 00:00:54,400 --> 00:00:56,960 All right, so let's start off with a broad question. 16 00:00:56,960 --> 00:00:59,840 And for everybody who's missed the initial conversation, you 17 00:00:59,840 --> 00:01:03,680 might want to check episode 23. That was back in 2023. 18 00:01:04,000 --> 00:01:07,520 So check that episode out if you want to quickly catch up on sort 19 00:01:07,520 --> 00:01:08,760 of the introduction to the topic. 20 00:01:09,120 --> 00:01:12,080 But so we're going to try to build up upon that with a very 21 00:01:12,400 --> 00:01:15,720 broad and vague question to you, Michael, what's new? 22 00:01:16,480 --> 00:01:18,200 Well, what's new? I mean, within the 23 00:01:18,200 --> 00:01:21,600 sustainability world itself, just with sustainability topics, 24 00:01:22,000 --> 00:01:25,360 it's a lot of the same stuff. And, and, and if you just look 25 00:01:25,360 --> 00:01:27,000 at that, it can be a little bit depressing. 26 00:01:27,000 --> 00:01:29,560 If you look at what's been happening with the growth 27 00:01:29,760 --> 00:01:32,120 emissions, despite all the best efforts we're trying to make, 28 00:01:32,640 --> 00:01:35,720 the growth in the amount of stuff we're using and how little 29 00:01:35,720 --> 00:01:39,000 is being reused. At the World Resources Institute 30 00:01:39,000 --> 00:01:41,200 each year brings out the global Circularity Report. 31 00:01:41,400 --> 00:01:44,320 And a few years ago, they said 9% of materials were being 32 00:01:44,320 --> 00:01:48,520 reused and it was 8% the next year 7 and just some weeks ago, 33 00:01:48,520 --> 00:01:51,280 the latest said 6%. So in some ways, we're going 34 00:01:51,280 --> 00:01:54,600 backwards. And yet there are some fantastic 35 00:01:54,720 --> 00:01:57,280 opportunities. And in the business world, we're 36 00:01:57,280 --> 00:01:59,960 learning more and more how to do a better and better job. 37 00:02:00,320 --> 00:02:03,200 And so if you look back quite some years, we had a corporate 38 00:02:03,200 --> 00:02:04,800 social responsibility departments. 39 00:02:04,800 --> 00:02:08,600 It was very much on the side of business business and then SAP 40 00:02:08,960 --> 00:02:11,520 and some other companies, but particularly SAP made 41 00:02:11,520 --> 00:02:14,200 sustainability a core part of its corporate strategy. 42 00:02:14,200 --> 00:02:17,200 So 1/4 of under Christian Klein of that. 43 00:02:17,360 --> 00:02:21,240 And now what's interesting is it's what I think is really new 44 00:02:21,440 --> 00:02:24,240 is the fact that sustainability is just becoming more and more 45 00:02:24,360 --> 00:02:26,800 how you do business. It's not some bit of software on 46 00:02:26,800 --> 00:02:30,760 the side that manages things, but it's just part of the 47 00:02:30,760 --> 00:02:32,120 day-to-day business more and more. 48 00:02:32,160 --> 00:02:34,480 I mean, we're, it's kind of at the start of that journey, but 49 00:02:34,480 --> 00:02:37,440 that's the direction and I think that's the really exciting part 50 00:02:37,440 --> 00:02:38,720 for us. OK. 51 00:02:39,640 --> 00:02:42,720 You touched on something I wanted to follow up with is I 52 00:02:42,720 --> 00:02:46,520 feel like in public discourse, the topic of sustainability is 53 00:02:46,520 --> 00:02:50,800 sort of taking a backseat and maybe reframed or looked at more 54 00:02:50,800 --> 00:02:54,120 as an efficiency gain. So I'm not necessarily trying to 55 00:02:54,120 --> 00:02:56,680 reduce waste, but from an environmental perspective, but 56 00:02:56,680 --> 00:02:58,720 just to improve your bottom line. 57 00:02:59,160 --> 00:03:01,960 And I feel like anything that can improve your bottom line and 58 00:03:01,960 --> 00:03:04,560 not necessarily count as a sustainable practice from an 59 00:03:04,560 --> 00:03:07,080 environmental perspective, but sort of fall into the same 60 00:03:07,080 --> 00:03:09,360 bucket these days. What's your take on that? 61 00:03:09,360 --> 00:03:12,760 Am I being too cynical? No, I, I, I don't think you're 62 00:03:12,760 --> 00:03:14,560 being cynical. I think that sometimes there are 63 00:03:14,760 --> 00:03:18,680 different kinds of public discourse taking place within 64 00:03:18,680 --> 00:03:21,720 the business world and within the news generally and within 65 00:03:21,720 --> 00:03:22,800 politics. I mean, certainly within 66 00:03:22,800 --> 00:03:25,040 politics, I think we know who we're speaking about. 67 00:03:25,040 --> 00:03:29,000 There's been a kind of a real cynicism about sustainability. 68 00:03:29,000 --> 00:03:33,040 And I think some on the further on the right think it's just an 69 00:03:33,040 --> 00:03:35,520 excuse for sort of more regulation. 70 00:03:35,800 --> 00:03:37,360 And to a certain extent that's true. 71 00:03:38,040 --> 00:03:40,680 You know you it's very important to use markets, it's very 72 00:03:40,680 --> 00:03:42,640 important to use business practices to drive 73 00:03:42,640 --> 00:03:44,960 sustainability forward and to see opportunities there. 74 00:03:45,120 --> 00:03:47,120 But a lot of them see it in those terms. 75 00:03:47,280 --> 00:03:50,880 But actually within the business world, to a large degree, not 76 00:03:50,880 --> 00:03:54,000 100%, but to a large degree, it's just carrying on and in 77 00:03:54,000 --> 00:03:56,960 some cases accelerating. What you can do for this because 78 00:03:57,320 --> 00:03:59,600 it makes sense. I mean, if you're looking at 79 00:04:00,200 --> 00:04:02,840 most businesses rely to a certain extent on natural 80 00:04:02,840 --> 00:04:05,200 capital. They take stuff, they add value 81 00:04:05,200 --> 00:04:07,040 to it, they produce a product and they sell it. 82 00:04:07,160 --> 00:04:09,440 And there's less and less stuff in the ground. 83 00:04:09,600 --> 00:04:12,400 So the best thing to do is to keep that material in use 84 00:04:12,400 --> 00:04:14,840 through multiple cycles. That's sustainability. 85 00:04:15,040 --> 00:04:18,440 So doing it makes sense anyway as a business model. 86 00:04:18,600 --> 00:04:21,560 So looking at what they call servitization, leasing products 87 00:04:21,560 --> 00:04:24,080 instead of selling them or selling the experience, like 88 00:04:24,080 --> 00:04:27,000 with a, you know, I don't have a car anymore, but if I need a tax 89 00:04:27,320 --> 00:04:30,080 taxi, I can book a taxi. So I just have it when I need 90 00:04:30,120 --> 00:04:34,600 access to a car, for example. So a lot of these things just 91 00:04:34,600 --> 00:04:39,280 make business sense. Now, for sure not all businesses 92 00:04:39,280 --> 00:04:43,120 will become sustainable. And some of the nervousness on 93 00:04:43,120 --> 00:04:46,680 the right, I can understand a little bit because in some areas 94 00:04:46,680 --> 00:04:50,800 of business, really they're not taking the, the whole cost of 95 00:04:50,800 --> 00:04:53,000 the production. So if you if you put a lot of 96 00:04:53,000 --> 00:04:56,240 bad stuff into the environment as a side effect of, of doing a 97 00:04:56,240 --> 00:04:59,440 business, then I think there is a role for regulation. 98 00:04:59,560 --> 00:05:03,040 It's typically called EPR, not ERP like we talked about, but 99 00:05:03,200 --> 00:05:05,520 extended producer responsibility, which basically 100 00:05:05,520 --> 00:05:09,320 means the producer pays. But if producers often, if they 101 00:05:09,320 --> 00:05:12,040 can get away with just dumping that pollution into someone 102 00:05:12,040 --> 00:05:15,320 else's yard so that they make more profit, very often they do. 103 00:05:15,320 --> 00:05:18,840 So there is a definite role for government to say, OK, great 104 00:05:18,840 --> 00:05:20,840 that you have a business, it's great that you're making money, 105 00:05:21,040 --> 00:05:24,240 but you should be taking the whole cost of production, 106 00:05:24,240 --> 00:05:26,920 whether that's an environmental cost or a social cost. 107 00:05:27,160 --> 00:05:30,200 However, when we're looking at it from an SCP point of view, we 108 00:05:30,200 --> 00:05:34,240 want to help companies obviously disclose and report on on some 109 00:05:34,240 --> 00:05:37,280 of those things, which we do. But we also want to show 110 00:05:37,280 --> 00:05:40,440 opportunities of how business can be used with these new 111 00:05:40,440 --> 00:05:44,840 sustainable business models to reduce risk, provide opportunity 112 00:05:44,960 --> 00:05:48,280 and obviously deal with regulation as well and and make 113 00:05:48,280 --> 00:05:49,640 profit. There's nothing wrong with that 114 00:05:49,640 --> 00:05:51,200 from my point of view. OK. 115 00:05:51,360 --> 00:05:54,640 So at a bare minimum, I'm going to stay with my cynicism hat on 116 00:05:54,640 --> 00:05:57,680 for for a little longer. So at a bare minimum, so the 117 00:05:57,720 --> 00:06:01,040 sustainability topic or having sustainability consciousness 118 00:06:01,040 --> 00:06:06,160 within your ERP could save you from APR crisis or from legal 119 00:06:06,160 --> 00:06:08,960 action that might follow up based on your practices in the 120 00:06:08,960 --> 00:06:10,760 past. So you're at least insured 121 00:06:10,760 --> 00:06:11,800 there? Absolutely. 122 00:06:11,960 --> 00:06:14,640 I mean, putting it in a very simplistic way, this is super 123 00:06:14,640 --> 00:06:17,600 simplistic, but I always kind of think there are three things 124 00:06:17,600 --> 00:06:20,400 that move business. One is regulation, they have no 125 00:06:20,400 --> 00:06:23,360 choice. One is risk, the cost of not 126 00:06:23,360 --> 00:06:26,800 doing it means it will affect their cost of capital, it'll 127 00:06:26,800 --> 00:06:29,840 affect their insurance and and it could potentially affect 128 00:06:29,840 --> 00:06:32,560 their business badly. And one is opportunity for new 129 00:06:32,720 --> 00:06:35,000 potential revenue opportunities to be honest with you, 130 00:06:35,000 --> 00:06:38,680 regulation, we have to help our customers deal with that anyway. 131 00:06:39,560 --> 00:06:42,400 And we do that with helping them report him because there's all 132 00:06:42,400 --> 00:06:44,160 these different climate regulations now. 133 00:06:44,200 --> 00:06:47,200 And I mentioned the CPR extended producer responsibility 134 00:06:47,200 --> 00:06:49,600 regulations. And so we do that anyway. 135 00:06:49,760 --> 00:06:52,800 But if we, if we just take risk as an example, if you look at 136 00:06:53,440 --> 00:06:56,960 like, I won't give company names, but if you look at big 137 00:06:56,960 --> 00:07:00,400 beverage producers, if they rely on freshwater, if they're not 138 00:07:00,400 --> 00:07:03,960 managing access to freshwater and they're just using it up, 139 00:07:04,000 --> 00:07:05,320 they will have no business in the end. 140 00:07:05,840 --> 00:07:09,360 The same with, I remember talking to a, a very large food 141 00:07:09,360 --> 00:07:11,720 producer that had about 20,000 farmers. 142 00:07:11,920 --> 00:07:14,600 Now, at the time they were complaining they have no real 143 00:07:14,600 --> 00:07:17,600 data on the quality of soil health. 144 00:07:17,760 --> 00:07:20,160 And so soil health around the world is dropping and dropping 145 00:07:20,160 --> 00:07:22,200 and dropping. Now, if you've got no soil, you 146 00:07:22,200 --> 00:07:24,720 have no crops and so you can't produce the food. 147 00:07:24,720 --> 00:07:26,160 So you don't have a business anymore. 148 00:07:26,440 --> 00:07:28,840 And this is true of so many businesses, quite apart from the 149 00:07:28,840 --> 00:07:32,360 climate risk, which effects all of us, but the natural capital, 150 00:07:32,440 --> 00:07:36,160 because people make things, even service providers rely on 151 00:07:36,160 --> 00:07:38,600 things. In the end, we have to manage 152 00:07:38,600 --> 00:07:41,840 that natural capital. And the idea that we can just 153 00:07:42,000 --> 00:07:44,920 avoid those discussions is crazy in my opinion. 154 00:07:45,360 --> 00:07:48,360 But, and what's interesting is that's being much more connected 155 00:07:48,360 --> 00:07:50,080 into some of the financial instruments. 156 00:07:50,080 --> 00:07:53,800 So last week I was at a climate conference and there was a one 157 00:07:53,960 --> 00:07:57,160 panel discussion with some senior people from the insurance 158 00:07:57,160 --> 00:08:00,800 industry about climate risk and natural capital risk. 159 00:08:01,320 --> 00:08:05,600 And they were saying that this is all being connected more and 160 00:08:05,600 --> 00:08:08,800 more and more into the overall cost of doing business. 161 00:08:08,800 --> 00:08:12,720 So if you have to insure companies and their natural 162 00:08:12,720 --> 00:08:15,920 capital risk is too high, that will cost them more if they want 163 00:08:15,920 --> 00:08:19,760 to raise funds and it's clear to investors or clear to the banks 164 00:08:19,760 --> 00:08:22,240 that they're not managing their natural capital. 165 00:08:22,560 --> 00:08:25,840 Certainly it's not connected in fantastically yet, but in the 166 00:08:25,840 --> 00:08:28,520 future it will become more and more expensive for them to get 167 00:08:28,520 --> 00:08:31,160 that funding. So managing your sustainability 168 00:08:31,160 --> 00:08:34,159 risks, it helps you to manage your business risk. 169 00:08:34,559 --> 00:08:37,600 And at the moment, many businesses are just building 170 00:08:37,600 --> 00:08:40,320 half of their risk profile. So just taking this one example 171 00:08:40,320 --> 00:08:43,919 of risk shows that sustainability avoiding it would 172 00:08:43,919 --> 00:08:46,600 be arguably insane for businesses. 173 00:08:46,880 --> 00:08:49,120 And if you think about it, one of the things businesses, 174 00:08:49,360 --> 00:08:52,320 especially publicly listed companies do is whenever they're 175 00:08:52,320 --> 00:08:55,960 talking about their investments, they have to list out what are 176 00:08:55,960 --> 00:08:58,280 the risks for those things going wrong. 177 00:08:58,520 --> 00:09:01,600 And yet natural capital risk is, I mean, it's getting more and 178 00:09:01,600 --> 00:09:04,520 more into the mix, but it's it's not being front and center. 179 00:09:04,640 --> 00:09:07,000 And yet it's one of the most important indicators of the 180 00:09:07,000 --> 00:09:10,160 potential success or lack of success of a future business. 181 00:09:10,520 --> 00:09:13,920 OK, that makes a lot of sense. And steering this back towards 182 00:09:14,160 --> 00:09:16,920 what SAP is up to, I'm sure we've all heard of the SAP 183 00:09:16,920 --> 00:09:20,760 Business Suite by now. The concept it's, it's all their 184 00:09:20,760 --> 00:09:23,960 age at the moment. Do you have maybe an overview as 185 00:09:23,960 --> 00:09:27,680 to how the sustainability topic and built into the business 186 00:09:27,680 --> 00:09:30,080 Suite concept? I imagine it's, it's hard to 187 00:09:30,120 --> 00:09:32,960 pinpoint because there's not one circle on a diagram that says 188 00:09:32,960 --> 00:09:35,360 sustainability, correct, because it needs to be sort of built 189 00:09:35,360 --> 00:09:38,240 into the practices and processes across the entire business 190 00:09:38,240 --> 00:09:39,640 suite. But maybe you can give us a 191 00:09:39,640 --> 00:09:41,280 bird's eye view as that role it plays. 192 00:09:41,720 --> 00:09:44,400 Sure. Well, this kind of goes back to 193 00:09:44,400 --> 00:09:47,240 what I said right at the start that this is what's new is that 194 00:09:47,240 --> 00:09:50,040 it is becoming core to what businesses do. 195 00:09:50,040 --> 00:09:53,800 So until fairly recently and and still out there in many cases, 196 00:09:54,040 --> 00:09:57,280 it's sustainability is treated a little bit like a bolt on. 197 00:09:57,480 --> 00:09:59,320 So you have companies that produce little bits of 198 00:09:59,320 --> 00:10:01,480 sustainability reporting software and they're not that, 199 00:10:01,480 --> 00:10:03,200 you know, they're very good for what they do. 200 00:10:03,480 --> 00:10:07,880 But the point is it has to be rooted and embedded in the core 201 00:10:08,000 --> 00:10:10,360 business and that's where SAP is really strong. 202 00:10:10,560 --> 00:10:13,920 Everything from materials procurement and evaluating 203 00:10:14,240 --> 00:10:16,760 supplies in your supply chain through product design, through 204 00:10:16,760 --> 00:10:18,800 product life cycle management. So all the supply chain 205 00:10:18,800 --> 00:10:22,200 management software, it has to be embedded there, all the 206 00:10:22,200 --> 00:10:25,080 operations software and management software and 207 00:10:25,080 --> 00:10:29,240 everything through logistics, just about every finance, every 208 00:10:29,240 --> 00:10:31,600 part of the business has to reflect this. 209 00:10:31,880 --> 00:10:35,360 So in that sense, sustainability is an outcome and the one thing 210 00:10:35,480 --> 00:10:36,960 that I guess is a challenge for us. 211 00:10:36,960 --> 00:10:39,600 Sometimes we do have a kind of portfolio of sustainability 212 00:10:39,600 --> 00:10:43,360 solutions. But I would argue and I hope 213 00:10:43,360 --> 00:10:46,600 this isn't too contentious, but I would argue that customers 214 00:10:46,600 --> 00:10:49,760 don't care whether we call it sustainability software or not. 215 00:10:50,280 --> 00:10:52,680 They care that it solves A sustainability problem they've 216 00:10:52,680 --> 00:10:55,400 got. So if you look at, if you go 217 00:10:55,400 --> 00:10:58,240 right back to the beginning, if we, I talked about circular 218 00:10:58,240 --> 00:11:00,720 economy as one of the sustainability challenges we 219 00:11:00,720 --> 00:11:02,440 work on, how do you keep materials in use? 220 00:11:02,680 --> 00:11:06,440 And I mentioned that the global Circularity report has had the 221 00:11:06,440 --> 00:11:10,280 worst amount of reuse this year that they've seen since they've 222 00:11:10,280 --> 00:11:12,320 been producing a report. It's just six point something 223 00:11:12,560 --> 00:11:14,520 percent. Now the starting point for 224 00:11:14,520 --> 00:11:19,160 Circularity is being able to design products for a life cycle 225 00:11:19,160 --> 00:11:23,720 management that are a modularizable with components 226 00:11:23,720 --> 00:11:27,600 that are ethical from ethical sources that can be taken apart 227 00:11:27,600 --> 00:11:30,880 and reused with products that can be upgraded, remanufactured, 228 00:11:30,880 --> 00:11:32,760 refurbished and eventually recycled. 229 00:11:33,040 --> 00:11:36,000 And so it starts there and then all the way through the 230 00:11:36,000 --> 00:11:38,400 business. And this is of course SA P's 231 00:11:38,400 --> 00:11:40,400 raison d'etre. This is what we do business 232 00:11:40,400 --> 00:11:43,400 processes from end to end. There are impacts within 233 00:11:43,400 --> 00:11:46,880 existing software where it's less necessarily about 234 00:11:46,880 --> 00:11:50,160 capabilities, although we do add particular sustainability 235 00:11:50,160 --> 00:11:52,360 capabilities. It's more about the use case 236 00:11:52,360 --> 00:11:54,920 where they're applied all the way through to the kind of 237 00:11:54,920 --> 00:11:57,280 external logistics. And then potentially within the 238 00:11:57,280 --> 00:12:00,720 context of circular economy, you couldn't need to introduce take 239 00:12:00,720 --> 00:12:03,880 back processes because let's say instead of selling the product 240 00:12:04,000 --> 00:12:07,080 which ends up in landfill, you want to bring it back in house 241 00:12:07,080 --> 00:12:09,040 and maybe you lease it to the customer instead. 242 00:12:09,240 --> 00:12:12,160 And, and we do have scenarios where we, we do that and then 243 00:12:12,160 --> 00:12:14,800 the customer needs to be able to track the performance of that 244 00:12:15,120 --> 00:12:18,400 product and then quickly be able to decide, can we upgrade this, 245 00:12:18,400 --> 00:12:20,800 can we refurbish this? Can we remanufacture this? 246 00:12:21,040 --> 00:12:25,760 Or is it now such a poor quality that we, we have to recycle it 247 00:12:25,760 --> 00:12:27,960 somehow? And we can recycle it because 248 00:12:27,960 --> 00:12:31,400 back at the design stage, we designed it so it could easily 249 00:12:31,400 --> 00:12:33,840 be taken apart. And you don't have components 250 00:12:33,840 --> 00:12:36,840 which are so stuck together or melded like plastics for 251 00:12:36,840 --> 00:12:38,440 example, that it can't be recycled. 252 00:12:38,720 --> 00:12:40,840 So that whole thing is an end to end thing. 253 00:12:40,840 --> 00:12:44,240 It involves enhancing existing processes and involves creating 254 00:12:44,240 --> 00:12:47,160 new processes around take back at the end of life. 255 00:12:47,480 --> 00:12:51,400 And that is stuff that which is SA PS bread and butter, to be 256 00:12:51,400 --> 00:12:52,560 honest. OK. 257 00:12:52,840 --> 00:12:56,520 And since beginners and students are probably a primary audience 258 00:12:56,760 --> 00:13:00,080 for this podcast, I had to turn it back to their perspective and 259 00:13:00,080 --> 00:13:03,400 understand what exactly do they do they have to do anything here 260 00:13:03,400 --> 00:13:06,920 or it sounds to me like this is just going to filter down 261 00:13:06,920 --> 00:13:10,160 naturally through the the stuff that they're learning and on the 262 00:13:10,160 --> 00:13:11,880 job training well. Yeah. 263 00:13:11,920 --> 00:13:14,640 I mean, in a sense, like AI, it's just becoming filtered into 264 00:13:14,640 --> 00:13:17,600 everything. However, I think the important 265 00:13:17,600 --> 00:13:20,040 thing is you. I don't think there is an area, 266 00:13:20,240 --> 00:13:22,240 somebody may come up with an example where this isn't the 267 00:13:22,240 --> 00:13:26,720 case, but I don't think there's an area in what SAP does where 268 00:13:26,760 --> 00:13:28,920 sustainability will not be part of it. 269 00:13:29,160 --> 00:13:32,800 And I guess my argument is that if you're not doing 270 00:13:32,960 --> 00:13:35,640 sustainability as part of what you're doing in whatever 271 00:13:35,640 --> 00:13:38,480 business scenario, you are not doing proper business. 272 00:13:38,480 --> 00:13:40,440 It's not that you're missing something. 273 00:13:40,440 --> 00:13:42,800 I mean, I'm on the Advisory Board of a sort of a 274 00:13:42,800 --> 00:13:46,200 sustainability MBA. And with a slight tongue in 275 00:13:46,200 --> 00:13:48,240 cheek, they were talking about how do we position this? 276 00:13:48,240 --> 00:13:52,560 And I was saying, why don't we say don't sign up for half an 277 00:13:52,560 --> 00:13:55,160 MBA? Because if you're, my argument 278 00:13:55,160 --> 00:13:58,960 is if you're like, if you learn risk management, but you don't 279 00:13:58,960 --> 00:14:01,000 take into account natural capital risk, like I was just 280 00:14:01,000 --> 00:14:03,600 saying, you've only got half your risk profile. 281 00:14:03,960 --> 00:14:06,240 If you're not looking at strategy from the point of view 282 00:14:06,240 --> 00:14:09,000 of where these sustainability opportunities are, you're only 283 00:14:09,000 --> 00:14:11,920 doing half an innovation module and all these other cases. 284 00:14:11,960 --> 00:14:15,040 In some sense, this is becoming part of everything. 285 00:14:15,040 --> 00:14:17,080 And so for a student, they will see this. 286 00:14:17,080 --> 00:14:21,520 However, there is a need to change mindset. 287 00:14:21,760 --> 00:14:24,720 And if you've got the mindset that allows you to see the 288 00:14:24,720 --> 00:14:27,280 opportunities and the problems that come as a result of 289 00:14:27,280 --> 00:14:30,720 sustainability, then you're, you're going to be in a much 290 00:14:30,720 --> 00:14:34,280 better position to be identifying this when you're as 291 00:14:34,280 --> 00:14:36,400 a student as learning this or you're, you become a 292 00:14:36,400 --> 00:14:39,360 practitioner for it. And what I would say is we don't 293 00:14:39,360 --> 00:14:42,240 talk about this very much, but one of the topics that's very 294 00:14:42,240 --> 00:14:44,920 popular out there on the market now for people interested in it, 295 00:14:45,120 --> 00:14:47,840 in sustainability is systems thinking. 296 00:14:48,680 --> 00:14:51,240 It's not massively complicated, but basically what the the 297 00:14:51,240 --> 00:14:55,400 premise, if I really simplify it, is most companies SA PS got, 298 00:14:55,520 --> 00:14:58,280 you know, 51 years of experience of seeing a problem or an 299 00:14:58,280 --> 00:15:00,960 opportunity and building a piece of software which helps us to 300 00:15:00,960 --> 00:15:03,560 manage that. What we've not necessarily 301 00:15:03,560 --> 00:15:06,760 systematically done, which although it's definitely 302 00:15:06,760 --> 00:15:10,440 developed over the years, is to look at and say, is there a risk 303 00:15:10,440 --> 00:15:12,520 that we've just moved the problem somewhere else? 304 00:15:13,200 --> 00:15:15,840 We've fixed it in one place, but we haven't looked at the wider 305 00:15:15,840 --> 00:15:19,320 impact for other stakeholders. And if I give a really kind of 306 00:15:19,320 --> 00:15:23,400 slightly silly example, if I buy an electric car but it's powered 307 00:15:23,400 --> 00:15:26,480 off a coal-fired power station down the road, then I've just 308 00:15:26,480 --> 00:15:28,240 moved the problem. I haven't fixed the problem. 309 00:15:28,400 --> 00:15:31,080 So I feel very good about having my electric car, but in the 310 00:15:31,080 --> 00:15:34,240 source of the electricity is possibly even worse than getting 311 00:15:34,240 --> 00:15:38,560 it from gas at the gas station. So one of the things I would 312 00:15:38,560 --> 00:15:43,440 recommend to any learner is to just look up and get an 313 00:15:43,440 --> 00:15:46,800 understanding of systems thinking and this is reflected 314 00:15:46,800 --> 00:15:49,720 in lots of areas. Now there's within the design 315 00:15:49,720 --> 00:15:52,440 world, there was this trend towards human centred design to 316 00:15:52,440 --> 00:15:55,760 look at the impacts on human and now the trend is towards a 317 00:15:55,760 --> 00:15:57,480 concept called life centred design. 318 00:15:57,760 --> 00:16:01,200 So when you're trying to fix a problem, you see an opportunity, 319 00:16:01,480 --> 00:16:05,320 look at the potential innovation opportunities and the potential 320 00:16:05,320 --> 00:16:09,600 impacts on human beings and on the environment as a whole. 321 00:16:09,720 --> 00:16:11,960 So that should be a core part of your process. 322 00:16:12,160 --> 00:16:15,480 And so these kinds of things, I think make the product by 323 00:16:15,480 --> 00:16:19,000 product learning that they do make more sense in my opinion 324 00:16:19,160 --> 00:16:21,040 and you'll be able to seed some of the sustainability 325 00:16:21,040 --> 00:16:23,320 opportunities there. OK. 326 00:16:23,400 --> 00:16:26,280 And from the employer perspective, I imagine if a 327 00:16:26,280 --> 00:16:29,680 potential employer within the SAP ecosystem, SAP itself or one 328 00:16:29,680 --> 00:16:33,520 of our partners could make it clear to a student that has I 329 00:16:33,520 --> 00:16:36,240 guess an interest in this area that the company as a whole, the 330 00:16:36,240 --> 00:16:38,720 organization as a whole already has its orientation. 331 00:16:39,040 --> 00:16:41,480 Perhaps that could be a recruiting advantage. 332 00:16:41,480 --> 00:16:44,040 I don't, I don't know. But I'm wondering, is there 333 00:16:44,040 --> 00:16:48,080 something that a partner company within the SAP ecosystem can do 334 00:16:48,400 --> 00:16:52,200 to differentiate themselves in this light or or is it just it's 335 00:16:52,200 --> 00:16:54,400 sort of standard all across the board, we're all doing the same 336 00:16:54,400 --> 00:16:57,040 thing? Yeah, that's a funny question 337 00:16:57,040 --> 00:16:59,680 because my immediate response is I don't want them to be 338 00:16:59,680 --> 00:17:01,880 differentiated in this way. I just want everyone to be doing 339 00:17:01,880 --> 00:17:03,800 it. It's such a different thing. 340 00:17:03,960 --> 00:17:06,440 However, you're quite right. It's it's certainly at this 341 00:17:06,440 --> 00:17:08,760 stage and for some years it's going to be a differentiator. 342 00:17:08,920 --> 00:17:12,440 I think the key thing, I mean the opportunity for partners and 343 00:17:12,440 --> 00:17:15,839 if you're a learner, the way to differentiate yourself is 344 00:17:16,000 --> 00:17:19,319 helping customers to see a line of sight between their 345 00:17:19,319 --> 00:17:22,040 day-to-day business and what they can do with our 346 00:17:22,040 --> 00:17:24,640 sustainability software. So it's not treated as two 347 00:17:24,640 --> 00:17:26,920 separate worlds. Quite frankly, people are too 348 00:17:26,920 --> 00:17:28,920 busy. You know a lot of CEOs, they 349 00:17:28,920 --> 00:17:31,040 have children and grandchildren. They know that they should be 350 00:17:31,040 --> 00:17:34,640 doing this, but they just don't have a line of sight between how 351 00:17:34,640 --> 00:17:37,040 they can integrate these, for example, carbon emissions 352 00:17:37,040 --> 00:17:40,120 software and make it part of their everyday world. 353 00:17:40,120 --> 00:17:43,120 Just like as if they were doing financial accounting or 354 00:17:43,120 --> 00:17:46,600 managerial accounting or transaction materials, building 355 00:17:46,600 --> 00:17:48,120 materials, Ledger and all that kind of stuff. 356 00:17:48,120 --> 00:17:51,360 All that financial materials transactions they can track at 357 00:17:51,520 --> 00:17:53,840 at very detailed level and aggregate it all up. 358 00:17:54,200 --> 00:17:58,520 And, and we need to show them how with our software, they can 359 00:17:58,520 --> 00:18:02,120 do similar things in using similar approaches. 360 00:18:02,240 --> 00:18:04,520 So they're not having to learn a whole bunch of new stuff. 361 00:18:04,520 --> 00:18:06,040 They don't have much time for this stuff. 362 00:18:06,040 --> 00:18:09,080 So if learners can show this relationship, it's really good. 363 00:18:09,080 --> 00:18:12,440 So for example, we're at the moment, we've just started work 364 00:18:12,440 --> 00:18:14,720 on carbon accounting and management certification. 365 00:18:14,720 --> 00:18:18,160 I don't quite know what the the title will be, but we had a 366 00:18:18,160 --> 00:18:21,000 couple of very large SAP partners and one of the senior 367 00:18:21,160 --> 00:18:25,400 leaders from one of the partners said to me in a big meeting, you 368 00:18:25,400 --> 00:18:27,560 know, I don't care about your individual products and your 369 00:18:27,680 --> 00:18:29,840 learning journeys. Like we can manage that, we can 370 00:18:29,840 --> 00:18:32,440 train ourselves. The problem we have is that 371 00:18:32,440 --> 00:18:36,480 we're dealing with big companies and we we need to share with all 372 00:18:36,480 --> 00:18:39,480 these different products how we can architect the whole thing 373 00:18:39,480 --> 00:18:42,040 together to meet all the emissions challenges. 374 00:18:42,040 --> 00:18:44,920 Because there are so-called scope one, scope 2, scope three 375 00:18:44,920 --> 00:18:46,800 there, they're all managed to different levels. 376 00:18:46,800 --> 00:18:49,800 You have to learn about how you set the organization, you know, 377 00:18:49,800 --> 00:18:52,600 could be equity based boundaries for your emissions or it could 378 00:18:52,600 --> 00:18:56,040 be your level of control based boundaries and all this stuff 379 00:18:56,040 --> 00:18:58,480 that is probably people are listening to it thinking what on 380 00:18:58,480 --> 00:19:00,800 earth is that all about? These are really important 381 00:19:00,800 --> 00:19:02,760 things for companies to understand. 382 00:19:03,000 --> 00:19:06,000 And then then they can see how our solution set around 383 00:19:06,000 --> 00:19:09,080 emissions handling can help them manage that and meet all the 384 00:19:09,080 --> 00:19:12,840 regulatory requirements. And if we can help partners, 385 00:19:13,000 --> 00:19:16,520 customers see that line of sight and see how we simplify that 386 00:19:16,520 --> 00:19:18,840 whole process, there's a huge opportunity. 387 00:19:19,320 --> 00:19:21,560 But it has to be done within customer language. 388 00:19:21,560 --> 00:19:25,320 It has to be done using the kind of, This is why I say I'm 389 00:19:25,320 --> 00:19:28,760 talking again and again about making sustainability just part 390 00:19:28,760 --> 00:19:31,280 of how you do business. And the the extent to which we 391 00:19:31,280 --> 00:19:33,480 do that. In my humble opinion, the extent 392 00:19:33,480 --> 00:19:35,720 to which we do that is the extent to which we'll be 393 00:19:35,720 --> 00:19:38,520 successful and the extent to which we help our customers 394 00:19:38,760 --> 00:19:41,280 become more and more sustainable while being successful 395 00:19:41,280 --> 00:19:42,600 businesses. Well said. 396 00:19:42,840 --> 00:19:47,080 But you touched on this being an additional thing that has to be 397 00:19:47,080 --> 00:19:50,160 sort of covered or adapted to in addition to the regular 398 00:19:50,160 --> 00:19:53,800 day-to-day business that it has always been a focus of CE, OS 399 00:19:53,800 --> 00:19:58,080 and everybody else That sort of brings in the opportunity for 400 00:19:58,320 --> 00:20:01,120 artificial intelligence perhaps to help pick up the slack here 401 00:20:01,120 --> 00:20:06,000 to assist in the improvement of practices, efficiency, etcetera. 402 00:20:06,200 --> 00:20:09,560 So doesn't need to be so much more, I guess, human focus into 403 00:20:09,560 --> 00:20:12,080 this. Do you have a take on AI and how 404 00:20:12,080 --> 00:20:13,960 it'll help or potentially harm here? 405 00:20:14,560 --> 00:20:16,600 Sure. Well, I, I think there are some 406 00:20:16,600 --> 00:20:19,800 huge opportunities here. I mean, of course we're building 407 00:20:19,840 --> 00:20:22,840 AI capabilities into sustainability solutions all the 408 00:20:22,840 --> 00:20:25,160 time. And that's great for me. 409 00:20:25,320 --> 00:20:27,720 One of the, I'll give you an example of where I think there's 410 00:20:27,720 --> 00:20:30,680 a huge opportunity. And this is, I wouldn't say this 411 00:20:30,680 --> 00:20:33,640 is an SAP position, but it's something that that I, I've 412 00:20:33,640 --> 00:20:35,800 seen. And if we look at some the 413 00:20:35,800 --> 00:20:39,680 challenge for example of helping customers become circular, now 414 00:20:39,720 --> 00:20:42,720 there's so many conferences about circularity and keeping 415 00:20:42,720 --> 00:20:45,440 materials in use and how you change your business model. 416 00:20:45,440 --> 00:20:48,320 And like I said earlier on, you change your approach to product 417 00:20:48,320 --> 00:20:51,360 development to material procurement and then that has an 418 00:20:51,360 --> 00:20:53,080 impact all the way through the business. 419 00:20:53,360 --> 00:20:56,160 And then like I said before, you need to have some take back 420 00:20:56,160 --> 00:20:59,480 processes in many, not all of them, but many of those circular 421 00:20:59,480 --> 00:21:02,640 business models so that you can upgrade, remanufacture, 422 00:21:02,640 --> 00:21:05,160 etcetera, etcetera and you keep control of the materials and 423 00:21:05,160 --> 00:21:07,440 therefore you can reuse those materials theoretically. 424 00:21:07,920 --> 00:21:11,880 The challenge with that is it requires process changes all the 425 00:21:11,880 --> 00:21:15,000 way through the business. So if you think of, you know, 426 00:21:15,000 --> 00:21:18,160 everything from design, procurement and manufacturing, 427 00:21:18,160 --> 00:21:21,560 but even marketing and legal and the logistics and reverse 428 00:21:21,560 --> 00:21:24,200 logistics as they call it, bringing things back in there is 429 00:21:24,200 --> 00:21:27,440 not an area that I can think of that isn't impacted. 430 00:21:27,600 --> 00:21:31,440 So the physical amount of change for a business to become 431 00:21:31,440 --> 00:21:34,480 circular is pretty scary. And the amount of knowledge 432 00:21:34,480 --> 00:21:37,040 that's need that each of those groups need to add to what they 433 00:21:37,040 --> 00:21:42,240 already do is quite a challenge. Now, one of the things I think 434 00:21:42,320 --> 00:21:46,800 can be transformative will be dual agents and AI agents 435 00:21:46,800 --> 00:21:50,400 generally. So if you look at theoretically, 436 00:21:50,720 --> 00:21:53,000 if you were looking at this, doing this with human beings, 437 00:21:53,280 --> 00:21:55,440 you would, let's say, let's start with product design. 438 00:21:55,880 --> 00:21:58,560 So you'd get a small group of people and say, right, we need 439 00:21:58,560 --> 00:22:02,000 to change our design approaches so that it's ethical design. 440 00:22:02,000 --> 00:22:04,720 We're designing our washing machines or cars or whatever so 441 00:22:04,720 --> 00:22:07,680 that they can be upgraded, recycled, the materials that 442 00:22:07,680 --> 00:22:09,640 won't degrade so far, all those kinds of things. 443 00:22:09,960 --> 00:22:13,400 So you may say to person A, can you go and start doing some 444 00:22:13,400 --> 00:22:16,400 research on materials that we could replace the existing ones 445 00:22:16,400 --> 00:22:19,480 with that don't meet the our sustainability standards? 446 00:22:19,600 --> 00:22:22,040 Person two, you can say, right, can you check out the data 447 00:22:22,040 --> 00:22:24,840 requirements and look at all the person three, you can say get 448 00:22:24,840 --> 00:22:27,520 the feedback from customers in terms of the existing and 449 00:22:27,520 --> 00:22:30,200 there's a whole bunch of activities you'd need a team. 450 00:22:30,520 --> 00:22:34,920 I'm working on this and now you replicate that kind of team in 451 00:22:34,960 --> 00:22:38,000 every part of the business for the change that's needed to 452 00:22:38,000 --> 00:22:40,240 become circular. Now with dual agents, 453 00:22:40,240 --> 00:22:44,240 effectively what you can do is you can just tell them, OK, this 454 00:22:44,240 --> 00:22:47,200 is what we want you to do. This is the data that will 455 00:22:47,200 --> 00:22:51,240 ground, as it's called you, you ground you with, you know, the 456 00:22:51,240 --> 00:22:54,080 regulations, maybe with a new set of design standards, 457 00:22:54,080 --> 00:22:56,640 etcetera, etcetera. And you will be and this is 458 00:22:56,640 --> 00:22:57,840 where the human will be in the loop. 459 00:22:57,840 --> 00:23:00,440 We talk about human in the loop for this because it shouldn't be 460 00:23:00,440 --> 00:23:03,040 the AI just makes all the decisions on its own, go and do 461 00:23:03,040 --> 00:23:04,840 this. And this can be done in a very 462 00:23:04,840 --> 00:23:07,120 short amount of time. I mean, it's, it's super fast. 463 00:23:07,280 --> 00:23:09,960 And then you could replicate it with again throughout the 464 00:23:09,960 --> 00:23:12,160 business and get the agents to work with each other. 465 00:23:12,360 --> 00:23:15,560 We some weeks ago, we got one of our colleagues from the 466 00:23:15,560 --> 00:23:18,200 Innovation Aviation Labs in Vancouver to build a sort of a 467 00:23:18,200 --> 00:23:21,720 lab preview of something like this for a designer who had no 468 00:23:21,720 --> 00:23:24,760 clue about sustainability, no clue about circular economy, and 469 00:23:24,760 --> 00:23:28,080 no clue about regulations. And just to you create a kind of 470 00:23:28,080 --> 00:23:31,280 a agent that would work with them to do a product design to 471 00:23:31,280 --> 00:23:33,840 make it circular. And one of my colleagues, Darren 472 00:23:33,840 --> 00:23:36,560 W, presented at the Science Museum in London to a new 473 00:23:36,560 --> 00:23:39,520 circular economy institute and it generated a lot of excitement 474 00:23:39,520 --> 00:23:41,920 around their potential. So I think this is just one 475 00:23:41,920 --> 00:23:44,840 example I think and maybe in a year's time I come back and 476 00:23:44,840 --> 00:23:47,800 realize it wasn't quite simply is that, but I think agents 477 00:23:47,800 --> 00:23:51,320 could be transformative for realizing the opportunity that 478 00:23:51,320 --> 00:23:53,520 comes from circular economy that's not being realized right 479 00:23:53,520 --> 00:23:56,120 now. OK, that sounds good. 480 00:23:56,640 --> 00:24:00,040 So there's hope. I hope there's hope by the way, 481 00:24:00,040 --> 00:24:03,760 it keeps me in a job, but it's I think there are quite a lot of 482 00:24:03,760 --> 00:24:06,520 false starts. But the thing that's I think 483 00:24:06,520 --> 00:24:10,040 that's the most exciting for me is that this movement away from 484 00:24:10,040 --> 00:24:13,240 being a separate bolt on think sustainability. 485 00:24:13,240 --> 00:24:16,520 It's just for me, I'm seeing these academia and I'm seeing 486 00:24:16,520 --> 00:24:19,720 this in business that it's it seems that the trend to me is 487 00:24:19,720 --> 00:24:21,920 this is just how you do business, right? 488 00:24:21,960 --> 00:24:24,680 You know, that's the opportunity for me. 489 00:24:25,280 --> 00:24:26,880 All right, that's been some great insights. 490 00:24:26,880 --> 00:24:30,160 And since we've taken basically half an hour of your time, I 491 00:24:30,160 --> 00:24:33,680 always want to collect some final thoughts, advice that you 492 00:24:33,680 --> 00:24:37,160 have for newcomers SAP on the future outlook and things they 493 00:24:37,160 --> 00:24:40,600 should look out for and maybe learn along the way as they 494 00:24:40,600 --> 00:24:42,960 start their journey. Yeah, I, I did mention this 495 00:24:42,960 --> 00:24:45,880 mindset thing, systems thinking thing, all that sort of stuff is 496 00:24:45,880 --> 00:24:47,880 good. And and I think it's keeping 497 00:24:47,880 --> 00:24:51,120 half, you know, not too much of your time, but realizing our 498 00:24:51,120 --> 00:24:54,680 business doesn't exist independently of the planet and 499 00:24:54,680 --> 00:24:57,360 independently of society. And and it's so easy. 500 00:24:57,360 --> 00:25:00,000 We're so involved in our day-to-day business. 501 00:25:00,000 --> 00:25:01,760 We see that we think that's the only world. 502 00:25:01,840 --> 00:25:05,200 And if I was speaking to a newbie, especially a student or 503 00:25:05,280 --> 00:25:09,160 a learner, at the point where you're getting is just an SAP 504 00:25:09,200 --> 00:25:13,600 view, make sure that you take any opportunity to get an 505 00:25:13,600 --> 00:25:15,280 outside in view of what's going on. 506 00:25:15,520 --> 00:25:18,080 Because this, this has really put, I mean, there's a lot of 507 00:25:18,080 --> 00:25:20,880 things you can read. There's a fascinating book, you 508 00:25:20,880 --> 00:25:23,200 don't have to agree with its concept, but fascinating book 509 00:25:23,200 --> 00:25:26,640 called Doughnut Economics, which looks at how the business world 510 00:25:26,800 --> 00:25:30,480 has to recognize there are limits within the ecosystem we 511 00:25:30,480 --> 00:25:32,080 we live in. We can't just destroy it. 512 00:25:32,440 --> 00:25:34,880 Oh, great. And there are needs of society 513 00:25:34,880 --> 00:25:37,760 that we need to take account of things like that just to be 514 00:25:37,760 --> 00:25:42,240 proud of, of SAP and, and be committed to what SAP is doing, 515 00:25:42,320 --> 00:25:46,720 but always keep a bit of a perspective that's outside in, I 516 00:25:46,720 --> 00:25:48,600 suggest. I mean, I'm, I'm an academic 517 00:25:48,600 --> 00:25:50,640 ambassador. I've done a lot, I'm lucky 518 00:25:50,640 --> 00:25:52,880 enough to be able to do a lot with outside SAP. 519 00:25:53,040 --> 00:25:56,400 And, and I, I think that's essential for my SAP job. 520 00:25:56,560 --> 00:25:59,240 I couldn't imagine doing my job if I wasn't able to collect 521 00:25:59,240 --> 00:26:02,880 those outside in perspectives. All right, excellent advice. 522 00:26:03,000 --> 00:26:05,360 Maintain your perspective. Look to your left and right. 523 00:26:05,640 --> 00:26:09,160 Yep, no tunnel vision. All right, Michael, thanks for 524 00:26:09,160 --> 00:26:11,280 sharing your insight today. Really appreciate you giving us 525 00:26:11,520 --> 00:26:13,000 your time. Thanks to everybody for 526 00:26:13,000 --> 00:26:14,640 listening. Reminder to everybody out there, 527 00:26:14,840 --> 00:26:17,640 Episode 23 if you want to get an introduction to the topic. 528 00:26:18,040 --> 00:26:19,560 Michael, thanks again for joining. 529 00:26:20,040 --> 00:26:21,680 You're welcome, it's great to speak to you all. 530 00:26:22,320 --> 00:26:23,520 Right. Keep learning everybody. 531 00:26:23,520 --> 00:26:24,720 Stay curious. Bye.