SAP reshuffles exec oversight of AI

For the second time this year, SAP is shaking up its executive ranks as it continues its quest to adapt to an AI-centric world.

The first shake-up came in March, with the creation of the Customer Value Group, merging SAP’s Customer Success and Customer Services and Delivery organizations to put sales, delivery, services, and support of its products under the leadership of executive board member for customer services and delivery Thomas Saueressig, who is now chief customer officer.

Shortly thereafter, the company announced that executive board member in charge of product and engineering Muhammad Alam had decided not to renew his contract when it expires in March 2027.

The consequences of that are being felt now as, rather than immediately replacing Alam, the company has decided to split his responsibilities among other executives, with CEO Christian Klein managing all of Alam’s teams except industrial AI, which will be run by COO Sebastian Steinhäuser, Bloomberg reported. It said SAP will conduct an external search, focusing on the US, for a new executive product lead, although it is “unclear” how the role will be structured.

Alam oversaw both SAP’s global product and engineering organization and its software applications, including product strategy and development.

Accelerating transformation

The changes will hasten SAP’s AI transformation and make it more competitive, a company spokesperson told CIO. “SAP is evolving its organization to accelerate its transformation toward an AI-driven Autonomous Enterprise,” the spokesperson said via email. “The new structure brings AI, data, and core applications closer together, enabling more integrated, end-to-end solutions built on SAP’s unique process expertise. These changes sharpen SAP’s competitive edge in Business AI, combining deep process knowledge, trusted data, and flexible platforms to deliver differentiated, reliable AI outcomes at scale, and reinforcing SAP’s position at the forefront of the next generation of enterprise software.”

Although a second leadership change within a few months could be a cause for concern, Jason Andersen, VP and principal analyst at Moor Insights & Strategy, sees the changes as necessary to help the company overcome customers’ reluctance to undertake complex and expensive software upgrades. “While AI has the potential to technically reduce those challenges, significant work remains to address cultural, industry-specific, and regulatory needs,” he said, adding that the task of helping customers migrate could distract from new innovations and growth opportunities. “The change in Thomas’ role in the Spring reflects the magnitude of the install base challenge. The shift in Christian’s focus is to help drive what will be an equally big job of shifting SAP from a SaaS-first company to an AI-first company.”

AI alone will not drive value

Terra Higginson, a principal research director at Info-Tech Research Group, said, “Companies are starting to get serious about the value gap in AI. This leadership shift shows that SAP recognizes AI alone will not drive value. SAP is trying to figure out where strategy is getting lost in execution, but they are not the only ones. The same issue is showing up across the software market.”

And, said Sanchit Vir Gogia, chief analyst at Greyhound Research, “SAP’s reshuffle is best read as a signal about accountability, not as proof that the AI execution problem is already solved. The pattern, however, is unmistakable. SAP is rebuilding its operating model around AI, adoption and cloud-led execution”

He reads the timing of the change as a response to what he called “genuine pressure on the economics of enterprise software,” pointing out, “executive urgency does not, by itself, make an agent safe enough to touch finance or payroll. The right posture is disciplined curiosity, neither applause nor panic.”

CIOs should ask SAP one brutally practical question first, he said: What changes for my estate because of this reported reshuffle? In other words, what changes in roadmap ownership, release timing and contractual accountability, “because that is the only question that matters when signing renewals or defending a program to a board.”

Focus on contract language

And as the company builds more AI into its products, he recommended CIOs move their focus from the company’s product claims to its contract language, including clarity on model-provider boundaries, customer-data use and opt-out rights.

“If SAP says customer data will not train third-party models, that belief belongs in the agreement, not on a homepage. Contracts should also pin down how AI is metered as features move from included to consumption-priced,” he said. “The sharpest question is where accountability sits when a workflow crosses SAP and non-SAP systems. A product promise that cannot be traced to an accountable owner is a slogan, not a commitment.”

So, he said, “Enterprise customers should not buy the reshuffle. They should interrogate the operating model.”