THE AI LEAPFROG: Why the ERP Modernisation Playbook is being Rewritten
THE AI LEAPFROG: Why the ERP Modernisation Playbook is being Rewritten
SAP and customers are converging on it; human nature guarantees it.
This weeks newsletter has been co-authored with Paul Byrne, a joint effort, sharing our observations as to a fundamental change in how the transformation model that has held firm for decades has moved on in a flash with the arrival of AI and Industry 5.0 edge. I wrote this as an essay to my self, I hope it hits the spot.For the last decade, the SAP ecosystem has lived off one central assumption:Extend and Modernise, Move to S/4HANA.That assumption is evolving towards a more balanced model.Not because of SAP. Not because of S/4HANA. Because AI has changed the economics of transformation, the market is arriving at this converged crossroads together, many organisations are looking for ways to progress in steps, SAP is the enabler and platform owner.The biggest opportunity in enterprise technology is no longer another multi-year ERP programme. It is the ability to leapfrog it through partnership with DragonERP continuity and optionality rather than large scale organisation disruption.That leapfrog helps make the Cloud ERP path more practical, It gives hope to the SAP ECC install base. It allows SAP to make subtle measured evolution in how its portfolio is consumed and monetised. And it creates a boom in micro-projects that deliver targeted value at speed.The organisations that create the most value will not always be the ones with the biggest programmes.They will be the organisations that create the most value will be the AI experimentalists.
Welcome to the SAP Omniverse.
DragonERP predicted it two years ago. Now we are watching it happen.The SAP Omniverse
The Rules of the ERP Universe
Every week we add another rule.
We are seeing a shift toward smaller, faster value delivery, we call it "Enterprise Kaizen"
We are all working through the same context and execution challenges.
"We can preserve investment while modernising", a term we don't like, its a term the industry has been wedded to for decades, modernisation on the whole is dead and Leapfrog will be the method of ensuring operating models remain fresh, relevant and can evolve at pace.
We should think of AI as an accelerator for the Operating Model and enabling SAP Solution , not a replacement for it
Like physics, ERP has universal laws. They apply whether you are a £50 million
manufacturer or a $50 billion global enterprise.
Industry changes. Scale changes. Geography changes.
The rules do not, they morph
Eighty percent is common. Twenty percent is localisation, regulation and enterprise uniqueness.
Always has been. Always will be.
AI and robotics do not change the ERP universe. They become a new force acting on it.
Gravity did not invent the universe.
It shaped it.
AI will do the same.
Sapphire Was Evolution Not a Revolution
Let’s get one thing out of the way. Most of what we experienced at Sapphire was about future preparedness.
There was no revolution, this is evolution at scale
No dramatic change of direction. No ERP singularity. No extinction-level event for ECC.
What we saw was a course correction.
Subtle. Important. Deliberate.
SAP are making pragmatic customer-aligned move rather than simply adjusting trajectory.
The “Why 2027 Matters. The market interpreted it as a moon landing.
It was not.SAP are building the platform that is making agentic ERP possible through Joule, PCE, and bridge strategies to ECC. The future is less about Rip and Replace and more about extension and selective micro transformation (Enterprise Kaizen)The reaction across parts of the ecosystem has been varied telling you everything you need to know, they are often trying to absorb change too quickly, borrowing your watch to tell you the time.DragonERP understood what happened. SAP, customers, and partners are now converging on a more pragmatic model of transformation, where value can be delivered in steps rather than only through large-scale change wall-to-wall AI.SAP are helping customers preserve investment while modernising in steps.For years We have said the pattern has consistently pointed away from an ECC apocalypseSAP are broadening access to AI while protecting customer investmentNow we have ECC on PCE extending to 2033.We also said Joule would eventually find its way into SAP ECC.Here we are.The direction of travel has not changed.The route has changedThat matters.SAP’s ecosystem depth is an advantage because it already contains the process context AI needs.SAP is becoming even more central to how enterprise AI is consumed SAP is providing the control plane for the next phase of enterprise automation. SAP is helping customers extend value from what they already own. SAP is enabling a more practical path to AI adoption.SAP’s ecosystem depth is an advantage because it already holds the context AI needs.
The Great AI Context Myth
Apparently, AI has a context problem.Apparently, the answer is Business Data Cloud, knowledge graphs, domain models, semantic layers and yet more toolchains.Here is the practical reality.Most enterprises do not have a context problem.They have an execution problem.The business context already exists. It is buried inside the ERP. It sits inside process flows, master data, customisation, controls, integrations, workarounds and twenty years of operating scar tissue.Some of it is ugly.Some of it is brilliant.Most of it is real.The context is already there.The challenge is teaching AI how to consume it through partnership, continuity, and optionality rather than disruption.That is a very different problem.And it is solvable through partnership, continuity and optionality with DragonERPWhat We BuiltRecently we built what we call a Level 4 Systemisation Stack.Every process. Every document. Every Standard Operating Procedure (SOP). Every process design. Every technical specification. Every integration. Every application dependency. Every control. Every data object.Then with the use of Signavio we defined two alternate best of breed TOMs, one industry specific and one generic to add the I.50 edge to it, and so Nvidia APIs landed into our design for the firs time and we were exceited beyond words.Everything, loaded into our model A complete contextual framework describing how the organisation actually operates.Not how PowerPoint says it operates.How it genuinely operates.Then we linked the whole thing together.Level 4 Business Context, Processes. Data. Applications. Controls. Integrations. Architecture and I5.0 systemisation + RICEFWThe result was a I5.0 business operating model full of context.Ready for AI.Ready for agents.Ready for automation.Ready for Industry 5.0.Paul Byrne laughed and told me I had reinvented a BPML.He is probably right.But that is exactly the point.The enterprise already contains the context. You do not need to rip everything out to find it.You need to train the intelligence that sits on top of it.
Why 2027 Matters
Not for the reason everyone thinks.2027 is not the end of ECC.It is the beginning of ERP deconstruction.The shift will not be SAP ECC to S/4HANA.The shift will be application-centric On Premise (Hosted) ERP to agent-centric Cloud ERP.That is the real transition.By 2027 We expect to see agentic wrappers around SAP ECC, Joule everywhere, a proper bridge strategy for Business ByDesign, composable business services replacing monolithicERP thinking and faster consumption of AI capability without waiting for core migrations.The destination is not the Autonomous Enterprise.Most SAP systems have been semi-autonomous for years thanks to customisation.The destination is the Agentic Enterprise.Then the Cognitive Enterprise by 2030.2027 is the signpost.Not the destination.
The Real AI Opportunity
Recently an SRO gave us a challenge.Dirty unstructured data.Critical to the future operating model.Potentially programme threatening.The traditional answer would have been obvious: a massive data programme, months of design, months of cleansing, millions spent and a steering committee quietly losing the will to live.Instead, we built an agentic context engine front door.We trained it against more than 200,000 examples.The result?Structure. Classification. Business meaning. Systemisation.Good data from bad data.No major customisation.No platform replacement.No disruptive transformations, No Business DisruptionWeeks.Not years.That is where AI becomes interesting.Not PowerPoint. Not keynotes. Not LinkedIn hype.Real business outcomes.Delivered quickly.
The AI Leapfrog
This is the point too many people are missing.CFOs do not want to wait two years for AI.They want value now.COOs do not want another transformation war.They want operational improvement now.Boards do not want another promise.They want results.Now.So, the question becomes simple.Why spend years modernising purely to access capability that can increasingly be consumed today? and for that modernisation to be out of date by the time you finally go live !
That is the leapfrog.
Take targeted parts of the process layer.Take targeted parts of the data layer.Apply AI.Create value.Move on.Repeat.
Enterprise Kaizen.
All you need to know about enterprise kaizen as the AI Leapfrog enabler.
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Not one giant bet.
A thousand smaller victories.
SAP understands this. Customers understand this, the ecosystem is moving into a new phase.
The End of Extend, modernise, and selectively transform
The future is not about being cutting edge with ERP.
The future is about being cutting edge in your industry.
Those are very different things.
Manufacturers do not buy ERP because they love ERP.
Retailers do not buy ERP because they love ERP.
Energy companies do not buy ERP because they love ERP.
They buy ERP because it enables outcomes.
AI changes how those outcomes are delivered.
That is why Leapfrog matters.
That is why the old modernisation narrative is evolving.
That is why SAP are helping shape the next phase of enterprise AI adoption
The next decade will not belong to the organisations running the newest ERP.
It will belong to the organisations extracting the most intelligence from the assets they already have.
The future is not extend, modernise, and selectively transform.
The future is Leapfrog.
SAP wants it.Customers demand it, through partnership, continuity, and optionality with DragonERPHuman nature guarantees it.And once it starts, it will not stop through partnership, continuity, and optionality withDragonERP A Call to ArmsIf you have followed our writing over the last few years, you will know that we keep coming back to the same point.The future is not about bigger programmes.It is not about more software.It is not about blindly following vendor roadmaps.It is about extracting value from what you already have and using AI to accelerate what comes next.Dragon ERP was founded to help organisations with these challenges, through partnership, continuity and optionality.Not to sell fear.Not to sell transformation theatre.Not to tell CIOs and CFOs that every problem needs another £100 million programme.Dragon ERP exists to help organisations cut through the noise, stabilise struggling programmes, challenge lazy thinking and unlock value from their existing SAP investments.Sometimes that means moving to SAP S/4HANA.Sometimes it does not.Sometimes the smartest move is not the biggest move.As the AI era unfolds, one thing is becoming painfully clear.The organisations that win will not necessarily have the newest ERP.They will have the clearest operating model, the strongest business context, the cleanest data pathways and the courage to experiment.That is the AI Leapfrog.That is Enterprise Kaizen.This is the space DragonERP is focused on helping organisations navigateIf you are a CIO, CFO, COO, investor or programme sponsor wrestling with these questions,We would love to hear your perspective.The conversation is only just beginning.
A Personal Thank You
Finally, a word of thanks to Paul Byrne.Paul and I don't always agree, which is precisely why I value his input.In an ecosystem increasingly full of AI-generated certainty, marketing soundbites and LinkedIn echo chambers, Paul has an annoying habit of asking the awkward questions and cutting through the nonsense.More than once he has dragged me back from disappearing completely down one of my ERP universe rabbit holes.When I proudly explained parts of the thinking behind this blog, his response was simple:"So you've reinvented a BPML?"As usual, he wasn't entirely wrong.Good ideas need challenge.Predictions need scrutiny.And theories need grounding in reality.So thank you, Paul, for helping keep this blog rooted in the practical world while I continue looking for pulsars, black holes and strange new laws of the ERP universe.
That's where I come in, message me or buy me a coffee its that simple and lets have a chat
Alisdair
About the Author
Alisdair Bach helps CIOs and CFOs solve complex SAP problems and shape what comes next. He advises boards, investors and executive teams on SAP strategy, assurance, architecture, commercial decisions and how SAP should be consumed, delivered and embedded across the enterprise.
An independent SAP analyst, author and lecturer, Alisdair challenges conventional industry thinking. He is the author of The SAP Omniverse and the originator of SAP Upcycling and Enterprise Kaizen. His work anticipated the extension of ECC and the arrival of AI and Joule on existing SAP landscapes, challenging the assumption that every organisation must rip out its current estate and start again.
Through Dragon ERP, Alisdair combines original thinking with decades of practical delivery experience across private equity, public sector and international organisations. When an SAP programme is struggling, he provides board-level assurance, forensic diagnosis and experienced turnaround leadership to help executives regain control and determine the right way forward.
