TCS signs 5-year deal with SAP to modernise cloud and AI operations

TCS and SAP have agreed on a five-year collaboration to streamline enterprise IT, strengthen AI-led capabilities and accelerate innovation as clients shift savings from traditional contracts

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Tata Consultancy Services (TCS) has signed a five-year deal with SAP to modernise the Ge­r­m­an software company’s enterprise-wide cl­o­ud and generative AI op­erations, one of the hi­gh-profile examples of an internal technology overhaul of a major software vendor.

 

The deal value was not disclosed but analysts said multi-year IT modernisation programmes of this scale typically run into the hundreds of millions of dollars. Depending on how fast SAP pushes cloud and GenAI adoption, the total contract value could land in the mid-hu­n­d­r­eds of millions over the stipulated time period, they believed. As part of the deal, TCS will help SAP streamline its complex IT landscape, enable seamless IT operations, and strengthen AI-led capabilities. The collaboration will deliver faster development cycles, lower total cost of ownership, and greater alignment between IT and business goals.

 

Over the next five years, TCS will focus on reshaping SAP’s IT business function to accelerate innovation and improve responsiveness to business needs.

 

“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,” said V Rajanna, president of technology and software services at TCS.

 

Throughout this year, IT deals have been mostly focused on cost reduction and efficiency improvement, as companies look to rein in expenses in an uncertain macroeconomic environment. Clients are ploughing some of the savings in the traditional deals into transformative projects using Gen AI and agents.

 

“TCS has partnered with SAP for many years, but this one stands out because it focuses on transforming SAP’s own internal IT operations,” Phil Fersht, founder of HfS Research, said.

 

“SAP is treating its own IT backbone the same way many enterprises do. It wants to streamline a complex landscape, move deeper into cloud and AI, and simplify operations. Bringing in TCS to run this transformation signals how serious SAP is about resetting its core systems. It also shows how far TCS has come as a strategic partner for global tech firms, not just enterprise customers,” he added.

 

TCS will also support SAP in delivering critical services towards end-to-end lifecycle for IT applications in enterprise IT transformation through a unified, efficient, and AI-powered model. The engagement will be anchored by four strategic centers of excellence for Gen AI, business technology platform, business data cloud, and customer experience.

 

Benjamin Blau, chief process and information officer at SAP, said: “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.”