Kevin Kumar: Great. Thanks for taking my questions.
Operator: The next question is from Chris Reimer of Barclays. Please go ahead.
Chris Reimer: Hi, thanks for taking my questions. Another topic around OpEx. I wanted to ask, given the strong growth in the regions, how are you looking at the rate of investment as compared to costs?
Roni Al-Dor: Chris, can you please repeat the question?
Chris Reimer: Yes. How are you looking at investments across the regions now that they’re growing so well, they’re producing good results? So how are you looking at the level investments in terms of headcount, in terms of cost, spending and sales and marketing, this kind of thing?
Roni Al-Dor: I will try to answer and then Roni and Alex will follow up. Obviously you see that the dollar value in SG&A and in R&D growing quarter-over-quarter constant all the time. So in R&D please think also that we are having offshore employee that adding. So even though that we’re adding significant amount of employee, the impact on the dollar is not significant. We allocate the R&D investment based on growth engine in the company. About two thirds of our product in the company are growth engine and vast majority of this R&D investment is going to there. And we are focusing on the Western world, North America and Europe and the region that we have operation. So this is on the R&D. On the SG&A as Roni mentioned, we believe that we can increase the sales team and account executive both in Europe and in North America.
And as we speak, we are already doing this. We are not seeing significant increase in the SG&A because we are also reducing some of the cost of the G&A like leases that we already did in this year. So significant investment in the SG&A because we believe we have the product to sell vast products with and also good position in North America and in Europe.
Chris Reimer: Got it. Thank you. And regarding the AI product that you announced last month, can you walk us through how that looks right now versus your other pre integrated digital products? Can you just walk us through how it might be different and what’s the potential there in terms of what you have in place right now?
Alex Zukerman: This is Alex. So our decision, so we published our new generative AI capabilities with the decision model tool. Our decision model tool has two main usages within Sapiens. One, it’s a software that is sold to financial institutions, banks, insurance companies and other large financial institutions to manage their business logic. And the second usage of that is like an OEM within our internal other core systems to use it as a tool for automation and for business rule management. The impact of this new Gen AI capabilities is very substantial on both aspects. When we look at using decision by our customers as the decision modeling and business rule management tool, already the first stage that we rolled out the model AI allows them to really capture all the logic of the decision model.
Rather than use a person, a business analyst or a modeler to build the data, we can now consume it from any type of documentation written in any natural language, an ability to translate natural language into business rules and deploy them. This brings about, we estimate, at least 30% reduction in effort in deployment project and in business as usual. This value is really we can harvest the value both in the direct sales of decision as well as using it within the core platforms of Sapiens, where it is the entity that manages the business rules, and also there in terms of both the project implementation, the one-time implementation, as well as the business’s usual maintenance and ongoing business management. This brings a substantial reduction in the effort and in the time that it takes to work on that.
The next stages that we plan to roll decision Gen AI is around integration around the ability to seamlessly work with machine learning capabilities embedded in the decision model. And all this will bring a huge amount of opportunities for us to improve the business operation, to improve role management, and to improve automation for our customers, both using it as an internal capability and on the customer site.
