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Ten years ago, Western Sugar made a decision that proved prescient: moving from on-premise SAP ECC to SAP S/4HANA Cloud Public Edition. At the time, artificial intelligence was not a priority in most roadmaps. The company is just trying to escape what the Director of Corporate Controlling, Richard Caluori called "a train wreck:” a customized ERP system so full of custom ABAP code that it turned out not to be upgradable.
Now, that early cloud adoption has proven to be the foundation for Western Sugar’s AI transformation. As SAP accelerates the rollout of enterprise AI capabilities across finance, supply chain, HR, and more, Western Sugar finds itself uniquely positioned to take advantage of the technology.
"We didn’t move to the cloud thinking about AI," Caluori said. "But that decision to embrace clean core principles and standardized processes turned out to be exactly what we needed when AI capabilities became available. The clean data, the standardized workflows, the disciplined processes, all the foundation we laid for the basic operational reasons is now the foundation that makes AI work. We are ready without even knowing."
Building AI readiness with a clean core ERP foundation
Western Sugar’s journey began with a familiar business problem: technical debt. Years of on-premise customization have created a system that is nearly impossible to maintain or upgrade.
"Because we are on premise, we can do our own ABAP coding, and over the years we have created such a mess in our internal coding that the software can no longer be upgraded," Caluori explained. "The immediate benefits of moving to the public cloud are clear: reduced infrastructure burden and access to standard processes refined by SAP. They have been in this business for 40 to 50 years, and they put all their experience into one solution. Now the upgrades just work."
But the most important advantage has proven to be the clean core philosophy inherent in public cloud deployments, which means that the software is maintained and upgraded by SAP. This approach, coupled with strong API connectivity, creates an environment where Western Sugar’s IT department can easily integrate systems.
In SAP S/4HANA Cloud Public Edition, this model keeps the core ERP logic standardized and upgradeable, while extensions and integrations are managed through APIs and services supported by SAP.
"Ultimately, we have a lower total cost of ownership, a better product, and the data quality and process discipline essential for AI adoption," Caluori said.
This clean core foundation – standardized, continuously updated, and API-connected – is what makes embedded AI viable within SAP Cloud ERP.
How SAP’s clean core processes enable AI automation
When SAP began rolling out SAP Business AI capabilities within SAP S/4HANA Cloud Public Edition, Caluori was encouraged to improve processes through automation and standardization in ways they had never imagined before. The company’s first major AI implementation focused on central invoice management.
Now, invoices come in from outside sources and go through the firewall. If they meet predefined AI confidence thresholds, SAP Business AI automatically posts them with zero human keyboard input. Each transaction is continuously evaluated using a traffic-light model: green items are automatically processed, yellow items are routed for review, and red items are flagged for immediate attention.
"Since the invoice flows through the system automatically, we are held to a high standard," he said. "AI-driven functionality only works if the entire process chain, from purchase requisition to purchase order to receiving to issuing is clean, so we are constantly improving upstream processes to meet the demands of our AI innovations."
Quantifying the operational impact of AI automation
Caluori estimates that Western Sugar has achieved six-figure direct cost savings through AI automation, not accounting for improved visibility and control.
"When I log on to my computer today, I can immediately see in real time what is happening in the shopping area," he said. "I have a comprehensive view of the cockpit that I didn’t have before. Because I have more visibility, I have more control over operations."
The company is now expanding the adoption of AI in new areas. With Western Sugar’s recent transition to a three-speed SAP landscape, Caluori is targeting month-end closing processes for AI automation.
"My goal is that AI takes over the majority by the end of the month," he said. "Over time, as AI learns what we do and how we close the books, the goal is to automate more than 50 percent of month-end activities. We also expect AI-driven procurement networks, and proactive reporting and intelligence, all of which will soon be possible."
Western Sugar is also developing predictive maintenance AI for its manufacturing equipment – a critical capability for its large facilities, where equipment failures can halt production and lead to losses in the hundreds of thousands of dollars. These efforts build SAP’s AI and analytics capabilities across asset management and manufacturing systems.
"We started an internal team working on predictive analytics with AI, where the system can tell us in advance when we need to be alert for specific equipment – that a particular machine may break down in the next two or three days or weeks," Caluori explained. "If we can proactively deal with these issues before they cause production stoppages, it could save us millions of dollars."
Managing organizational change with AI adoption
While the technology itself provides clear benefits, the impact on the organization is more complex. For Western Sugar, modernizing its core systems early – by moving to SAP’s cloud and adopting standardized, upgrade-driven processes – required not just new workflows, but a fundamental change in how employees think about change itself.
For Caluori, that willingness is non-negotiable. “Change management is the number one key to success,” he said. “We have to do a lot of change management, not only in business processes, but in employee behavior as well.”
That work pays off over time, in part because cloud adoption normalizes continuous change. As upgrades become routine rather than disruptive, employees become more comfortable with evolution as an operational condition.
“Now, when SAP comes with a new upgrade, they know that change is coming,” Caluori explained. “The thinking has shifted to being excited to see what improvements the next update will bring.”
And that culture shift has proven critical as Western Sugar moves beyond system upgrades and into more advanced initiatives.
“Now people are eager to move into AI – the bigger projects,” he added.
However, that cultural readiness needs to be removed from the top. At Western Sugar, the executive leadership – most of them from large international organizations – understands the competitive need to stay current in technology. That top-down commitment helped normalize continuous change and create the foundation needed to pursue AI strategically.
AI readiness lessons from Western Sugar
For companies considering their own AI journeys, Western Sugar’s experience offers a clear lesson: AI readiness begins before AI adoption. The clean core, standardized processes, and strong data quality that Western Sugar built a decade ago, driven solely by the need to escape technical debt, have proven to be exactly what AI needs. And while Caluori acknowledges the advantage an early start provides, he says the second best time to start is now.
"You must accept these changes, otherwise you will be left behind," Caluori said. "That continuous improvement is what SAP has given us, and now with AI capabilities integrated throughout, we are seeing benefits that we could not have imagined when we started this journey."
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