Why KPMG Says AI Belongs Inside the ERP Transformation, Not Beside It

SAP customers are conducting two parallel conversations today. One, which has been a burning topic for most of the past decade, is about ERP: when to leave SAP ECC, whether to pursue a greenfield or brownfield approach, and how to keep the core clean. The other, more recent conversation, is about AI: which pilots to fund, which copilots to trial, and how to govern agents that nobody fully understands yet. Valentino Koester, Global Head of SAP360 and AI & Data Lead at KPMG International, believes the two conversations have now converged.

“Enterprise AI is no longer a separate initiative,” Koester told SAPinsider. “It becomes part of the ERP transformation itself. Organizations that combine Cloud ERP, Clean Core, trusted data, strong governance and organizational readiness are best positioned to successfully adopt agentic AI and, most importantly, realize business value by doing so.”

That conviction shapes KPMG’s approach to RISE with SAP. The firm earned RISE with SAP Validated Partner status in spring 2025. In February 2026, SAP elevated KPMG to Global Strategic Service Partner, the highest tier of its partner program, citing the firm’s cloud-native, AI-first approach. In Koester’s view, validation brings a set of obligations: run RISE with SAP programs as business transformations, keep the core clean over the long term, and build AI readiness into the program from the very first day.

Start With the Business, Not the System

The first obligation is a mindset shift. “RISE with SAP moves an SAP ECC customer to SAP Cloud ERP Private as a business-led change, not a like-for-like system swap,” Koester said. “The focus shifts from delivering the system to delivering measurable business value. Adoption matters more than implementation.”

If value is the goal, governance must protect it. Koester points to executive sponsorship, explicit business ownership of every major decision, and value measurement that continues throughout the program rather than beginning at go-live. As a Validated Partner, KPMG also participates in SAP’s Customer Adoption Program, through which SAP and KPMG leaders jointly review delivery health. The governance philosophy itself is one of balance. “Keep the core standard, apply deviation deliberately where it drives value, and manage risks and dependencies rigorously,” Koester explained.

Yet even well-governed programs can stall. “Transformations fail in the gap between designed process and actual behavior,” he said. “Sustained adoption turns value cases into day-to-day practice.” Change management, in other words, is not a supporting workstream. It carries as much weight as technology.

Clean Core as the Platform for What Comes Next

The second obligation follows naturally. A business-led transformation pays off only if the resulting platform remains flexible, and that is where clean core comes in. Koester rejected the idea that clean core is merely a cleanup exercise. “Clean core is a continuous operating principle, not a one-time technical cleanup, governed across the full RISE with SAP lifecycle,” he said. The principle spans processes, data, integrations, and operations—not just custom code.

In practice, KPMG pushes differentiation out to SAP Business Technology Platform (BTP) and the new SAP Business AI Platform, leaving the digital core untouched. Every extension passes a clean-core-compliant design check, and compliance is monitored continuously through quality gates and SAP Cloud ALM well after go-live.

The importance of clean core for AI becomes clear in the way KPMG sequences its design work. According to Koester, fit-to-standard process redesign comes first, “designing for future User and Agent Experience so that agents can operate reliably.” A clean, standard core enables agents to act predictably. The payoff, Koester said, is “faster innovation, lower lifecycle cost, easier upgrades and an agent-ready foundation for the Autonomous Enterprise.”

From Pilots to Governed Scale

With the foundation in place, the question becomes how to move AI beyond experimentation. KPMG’s answer is to embed AI in the strategy and operating model from the outset, involve business, legal, risk, and compliance teams alongside IT, and focus on a small number of end-to-end use cases tied to a tailored roadmap.

Koester’s warning to organizations tempted to move faster is blunt. “Don’t bolt agentic AI onto existing complexity. Otherwise, the only thing you scale is the complexity itself,” he said. “Invest first in organizational readiness instead.”

Even the scorecard changes, Koester noted: “Scale via governance, not experiments. Measure business outcomes, not use case counts.”

The Data Beneath the Agents

Every one of those use cases depends on data the enterprise can trust, and this is where SAP Business Data Cloud enters KPMG’s architecture. “Generic AI on ungrounded data is 80% correct, which isn’t enough for mission-critical processes,” Koester said. “Enterprise AI needs process knowledge, connected data and governance.”

KPMG sees SAP Business Data Cloud (SAP BDC) as the layer that provides a managed platform to unify SAP data into a semantically rich, single source of truth; connect to Databricks, Snowflake, and hyperscalers through zero-copy integration; and preserve business meaning through the SAP Knowledge Graph. Cataloging, lineage, and access controls—including Collibra integration—allow agents to consume data securely. KPMG’s role, Koester said, is to “enable, embed and evolve,” beginning with discovery workshops that help clients prioritize the highest-value use cases.

Brownfield Without the Baggage

The same logic applies to the large installed base still on SAP ECC. “Brownfield should not mean lift and shift,” Koester said. “Use the transformation to remove technical debt, cleanse data and reengineer processes. A hybrid path lets you selectively modernize critical areas rather than carry everything forward.”

KPMG assesses AI readiness across data, processes, people and governance before migration begins, applies its Trusted AI framework from day one, and simplifies processes before automating them. As Koester concluded, “AI strategy and data strategy must go hand in hand.”

What This Means for SAPinsiders

Design for AI from day one of the RISE with SAP journey. Koester’s central message is that Cloud ERP, clean core, trusted data, and governance form a single foundation. SAP customers planning a move to SAP Cloud ERP Private should include data foundations, such as SAP Business Data Cloud, and a prioritized AI roadmap in the original design.

Govern clean core as an operating discipline that extends beyond code. Enterprise architects should establish clear decision rights, require a design check for every extension, and monitor compliance through SAP Cloud ALM long after go-live. Processes, data, and integrations should all be treated as part of the core.

Fund organizational readiness on par with technology. KPMG’s multi-country experience shows that programs succeed or fail in the gap between designed processes and actual behavior. CIOs and ERP program leaders should budget for change management, role-based reskilling, and operating-model redesign alongside the technical build.