A Big IT Refresh: SAP Taps TCS for Cloud and AI Transformation

SAP is kicking off one of its biggest internal IT upgrades yet, and it’s turning to a very familiar partner to do it. The German software giant has signed a five-year deal with Tata Consultancy Services (TCS) to modernize its own IT operations through cloud and generative AI. The two companies already have a 20-year history of working together, but this time the focus is on SAP itself, not its customers.

Transforming SAP’s core IT, not just its products

Instead of rolling out new capabilities to the market first, SAP is implementing the transformation internally. The company wants to clean up a massive internal IT landscape that supports more than 100,000 employees, simplify day-to-day operations, and embed GenAI into how people actually work. To make that happen, SAP and TCS are building four Centers of Excellence, each focused on a different part of the overhaul: generative AI, the Business Technology Platform, the Business Data Cloud, and customer experience.

Benjamin Blau, SAP’s chief process and information officer, emphasized the depth of the partnership, saying: “TCS and SAP partnership is built on trust and excellence. TCS’s unwavering commitment and collaboration to drive innovations across products has forged a long-lasting relationship with SAP.”

What the blueprint looks like

Each Center of Excellence has its own role. The GenAI group will focus on weaving AI directly into SAP’s everyday business processes. The Business Technology Platform team will lean on low-code and no-code tools to help new features get built faster. The Business Data Cloud team will create a consistent data foundation and turn SAP’s enterprise data into something the business can use and monetize. And the Customer Experience team will zero in on modern ways to make every step of the customer journey smoother and more meaningful.

TCS president of technology, software and services, V Rajanna, emphasized the bigger vision behind the partnership: “This collaboration shall leverage the transformative potential of AI and cloud to unlock new revenue streams, accelerate business growth, and deliver differentiated experiences for enterprise and their customers globally.”

Why this deal stands out

Big tech companies overhauling their own legacy systems is happening more often, but it’s never simple. SAP is basically treating its internal IT the same way its customers treat theirs, and it’s tapping TCS to run that transformation at scale. Over the next five years, the plan is to make SAP’s IT more responsive to business needs, reduce the total cost of ownership, and lay the foundation for faster innovation.

TCS will also manage the full lifecycle of SAP’s IT applications through a single operating model that blends efficiency with AI-driven improvements.

The SAP deal also comes at a time when TCS is expanding its role in the AI economy. Just last week, the company teamed up with TPG on a $2B HyperVault venture to build AI-ready, liquid-cooled data centers across India.