In a move that redefines its corporate strategy, SAP has announced an executive reorganization that places artificial intelligence under the direct supervision of its CEO, Christian Klein. This is the second restructuring in less than a year, driven by the need to accelerate the transformation toward an AI-powered company amid intensifying competition and customer expectations.

Background: A Restructuring in Two Acts

In March, SAP created the Customer Value Group, merging Customer Success and Customer Services and Delivery under the leadership of Thomas Saueressig, who became chief customer officer. The goal was to unify sales, implementation, services, and support. Shortly after, Muhammad Alam, an executive board member responsible for product and engineering, decided not to renew his contract beyond March 2027.

Instead of seeking an immediate replacement, SAP chose to redistribute Alam's responsibilities. According to Bloomberg, Christian Klein will take over all teams that reported to Alam, except for industrial AI, which will now report to Sebastian Steinhäuser, chief operating officer. Additionally, the company has initiated an external search, focused on the United States, to hire a new product chief, though the exact scope of the role is not yet defined.

AI as the Central Axis of the New Structure

A SAP spokesperson told CIO that these changes aim to “accelerate the transformation toward an autonomous AI-driven enterprise.” The new structure brings AI, data, and core business applications closer together, enabling the development of integrated end-to-end solutions based on SAP's unique knowledge of business processes. The company believes this will strengthen its competitive position in the Business AI market by combining deep process knowledge, reliable data, and flexible platforms.

A Necessary Move or a Sign of Urgency?

Jason Andersen, vice president and principal analyst at Moor Insights & Strategy, believes the reorganization is necessary to help SAP overcome customer resistance to migrating to more complex and costly platforms. “Although AI has the potential to technically reduce those challenges, there is still much work to be done to address cultural, regulatory, and industry-specific needs,” he notes. Andersen adds that Saueressig's role change reflects the magnitude of the challenge posed by SAP's massive installed base, and Klein's focus aims to transform SAP from a SaaS-centric company to an AI-centric one.

For Terra Higginson, principal research director at Info-Tech Research Group, “companies are beginning to take the gap between AI's potential and the value it actually generates very seriously.” This reorganization reveals that SAP is aware that AI alone will not create value for customers and is trying to identify where strategy breaks down during execution. “This same problem is occurring across the software market,” she adds.

Sanchit Vir Gogia, chief analyst at Greyhound Research, interprets the reorganization as a signal about accountability and executive responsibility. “The pattern is clear: SAP is rebuilding its operating model around artificial intelligence, adoption, and cloud-oriented execution.” However, he warns that executive urgency does not automatically turn an AI agent into a safe tool for managing finances or payrolls.

Implications for CIOs: Beyond the Promises

Gogia recommends that CIOs ask SAP a concrete question: “What exactly changes for my technology environment as a result of this reorganization?” That is, who will be responsible for each roadmap, whether launch timelines will change, and whether contractual liability will be modified. These are the only relevant issues when renewing contracts or justifying technology programs to the board.

Furthermore, as SAP integrates more AI into its products, CIOs must pay attention to the fine print in contracts. Aspects such as liability limits between SAP and AI model providers, use of customer data, opt-out options, and pricing mechanisms for AI-based features must be clearly defined. “If SAP claims that customer data will not be used to train third-party models, that guarantee must be in the contract, not just on a website,” Gogia emphasizes.

The Broader Context: AI, Security, and Governance

This reorganization comes at a time when AI is transforming the business landscape but also poses significant risks. As noted in our analysis on SAP cybersecurity, 88% of companies admit to being unprotected against advanced cyber threats. The integration of AI into business processes must be accompanied by robust security measures, such as those addressed in the ethical hacking and penetration testing guide.

On the other hand, the relationship between the CEO and CIO becomes more critical than ever. In our article on the CEO-CIO tandem, we highlight how this strategic alliance is key to navigating the AI era. Klein's decision to directly oversee AI underscores the importance of this collaboration.

Conclusion: Buy the Reorganization or Scrutinize the Operating Model

Gogia concludes: “Enterprise customers should not buy the reorganization; they should carefully examine the operating model behind it.” Executive urgency does not guarantee results, and CIOs must ensure that organizational changes translate into tangible improvements for their technology environments.

At ForgeNEX, we will continue to analyze how these transformations impact the industry. Meanwhile, we recommend IT professionals stay updated on best practices in cloud solutions like Azure and security without forced updates, as well as understand the infrastructure challenges faced by AI companies (see analysis).

Original source: ComputerWorld. Analysis and adaptation by ForgeNEX.