SAP has signed a five-year outsourcing agreement with Tata Consultancy Services (TCS) to support it in its strategy to transform its internal IT through enterprise-wide cloud and generative artificial intelligence (GenAI).

The German business software giant has worked with TCS for 20 years, which has included a project to transform SAP’s business model from licence-maintenance-based to pay-per-use cloud services.

The new contract will focus on SAP’s internal IT operations, which support more than 100,000 staff, and see the companies jointly establish four centres of excellence (CoE). These will be focused on GenAI, low-code and no-code development, enterprise data and customer experience.

“Together, we are simplifying our customer journeys and accelerating cloud adoption,” said Benjamin Blau, chief process and information officer at SAP. “TCS has forged a long-lasting relationship with SAP.”

The GenAI centre will embed GenAI capabilities and features within SAP business processes. Another, known as the Business Technology Platform CoE, will see the use of low-code and no-code tools to speed up development, while a Business Data Cloud CoE will focus on helping SAP monetise its data. A fourth centre will be known as Customer Experience.

V Rajanna, president of technology, software and services at TCS, said: “TCS and SAP have been a strategic partnership for more than two decades … As we enter the next phase, this collaboration shall leverage the transformative potential of AI and cloud.”

Also in Germany, TCS has extended its work with Aldi as part of the retailer’s project to modernise retail operations through digital technologies.

The deal will see TCS transform Aldi’s IT across Europe, the US and Australia, with a focus on AI, cloud-based operations and cyber security.

Daniel Koch, international technology officer at Aldi, said: “Together, we will modernise infrastructure, drive automation and deliver improved outcomes for our business and customers worldwide. This partnership ensures that Aldi is well positioned to respond with agility to the evolving demands of global retail.”

Abhijit Niyogi, vice-president and business unit head of retail at TCS, said that through advanced cloud, automation and AI capabilities, the technology landscape will be transformed.

TCS has been in Germany for about 35 years, where it now has more than 15,000 staff. According to offshoring IT expert Peter Schumacher, who is CEO of Value Leadership Group, TCS is the largest Indian IT services firm in the country with the largest economy in Europe.

“TCS’s performance reflects strong demand from businesses in continental Europe to take out cost and undertake large-scale, digitally enabled transformation initiatives at an accelerated pace,” said Schumacher. “But beyond customer-driven demand, TCS’s results also demonstrate its ability as an organisation to respond appropriately to market situations and compete effectively.”

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