Presented by SAP
Ten years ago, Western Sugar made a decision that would prove prescient: moving from on-premises SAP ECC to SAP S/4HANA Cloud Public Edition. At the time, artificial intelligence was not a priority on most roadmaps. The company was simply trying to avoid what Director of Corporate Controlling Richard Caluori said "A trainwreck: “A highly customized ERP system that was so loaded with custom ABAP code that it was not upgradable.”
Today, early cloud adoption is proving to be the foundation of Western Sugar’s AI transformation. As SAP accelerates its rollout of business AI capabilities in finance, supply chain, HR and other areas, Western Sugar finds itself uniquely positioned to take advantage of the technology.
"We didn’t move to cloud thinking about AI," Caluori says. "But the decision to adopt clean core principles and standardized processes proved to be exactly what we needed as AI capabilities became available. Clean data, standardized workflows, disciplined processes, the groundwork we did for basic operational reasons is now the foundation that makes AI work. We were ready without knowing."
Building AI Readiness with Clean Core ERP Foundation
Western Sugar’s journey began with a familiar enterprise problem: technical debt. Years of on-premises customization had created a system that was nearly impossible to maintain or upgrade.
"Because we were on campus, we could do our own coding in ABAP, and over the years we created such a mess in our internal coding that the software was no longer upgradeable," Caluori explains. "The immediate benefits of moving to the public cloud were 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 have put all their experience into this one solution. Now the upgrades just work."
But the most significant benefit proved to be the clean core philosophy inherent in public cloud deployments, meaning the software is maintained and upgraded by SAP. This approach, combined with strong API connectivity, created an environment where Western Sugar’s IT department could easily integrate the system.
In SAP S/4HANA Cloud Public Edition, this model keeps the core ERP logic standardized and upgradeable, while extensions and integrations are handled through SAP-supported APIs and services.
"Ultimately, we have a lower total cost of ownership, a better product and data quality, and the process discipline that is required for AI adoption," Caluori says.
This clean core foundation – standardized, constantly updated, and API-connected – is what makes embedded AI inside SAP Cloud ERP viable.
How Clean Core Processes Enabled AI Automation at SAP
When SAP began rolling out SAP Business AI capabilities inside SAP S/4HANA Cloud Public Edition, Caluori was inspired to improve processes through automation and standardization in ways he had never imagined before. The company’s first major AI implementation focused on centralized invoice management.
Today, invoices come from external sources and pass through firewalls. 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 sent for review, and red items are flagged for immediate attention.
"Since invoicing flows through the system automatically, we are held to a high standard," He says. "AI-powered functionality only works when the entire process chain, from purchasing requisition to receiving purchase orders to issuing, is clean, so we are constantly improving those 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 taking into account improved visibility and control.
"When I log into my computer now, I can immediately see in real time what’s going on on the buy side," He says. "I have a wider cockpit view that I didn’t have before. Because I have more visibility, I have more control over operations."
The company is now expanding AI adoption into new areas. With Western Sugar’s recent change to SAP’s three-speed scenario, Caluori is targeting month-end closing processes for AI automation.
"My goal is to have AI handle most of the month end time," He says. "Over time, as AI learns what we’re doing and how we close the books, the goal is to automate more than 50 percent of month closing activities. We are also looking forward to AI-managed procurement networks and proactive reporting and intelligence, all of which will be possible soon."
Western Sugar is also developing predictive maintenance AI for its manufacturing equipment – a critical capability for its large-scale facilities, where equipment failures can halt production and lead to hundreds of thousands of dollars in losses. These efforts build on SAP’s AI and analytics capabilities in asset management and manufacturing systems.
"We’ve started an internal team working on predictive analytics with AI, where the system can tell us in advance whether 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 explains. "If we can proactively address these issues before production stops, it will save us millions of dollars."
Managing organizational change along with AI adoption
While the technology itself has provided clear benefits, the organizational impact has been more complex. For Western Sugar, quickly modernizing its core systems by moving to SAP’s cloud and adopting standardized, upgrade-driven processes – requiring not only new workflows, but a fundamental shift in the way employees think about change.
For Caluori, that urgency is unattainable. “Change management is the number one key to success,” he says. “We had to do a lot of change management, not only with respect to business processes, but also with respect to employee behavior.”
That work paid off over time, partly because cloud adoption normalized constant change. As upgrades became routine rather than disruptive, employees became more comfortable with development as an operational condition.
“Now, when SAP comes out with a new upgrade, they know change is coming,” explains Caluori. “The mindset has become curious to see what improvements the next update will bring.”
And that cultural shift has proven crucial as Western Sugar moves beyond system upgrades to more advanced initiatives.
“Now people are also eager to get into AI – big projects,” he added.
However, that cultural readiness must be driven from the top. At Western Sugar, the executive leadership – many of whom came from large international organizations – understood the competitive need to stay up to date with technology. That commitment from the top down has helped normalize continued change and laid the groundwork needed to advance AI strategically.
Lessons in AI readiness from Western Sugar
For companies considering their own AI journey, Western Sugar’s experience provides a clear lesson: AI preparation begins long before AI adoption. The clean core, standardized processes and strong data quality established by Western Sugar a decade ago, driven entirely by the need to avoid technical debt, proved to be exactly what AI needed. And while Caluori admits he benefited from an early start, he says the second best time to start is now.
"You have to adapt to these changes, otherwise you will be left behind," Caluori says. "That continuous improvement is what SAP provides us, and now with AI capabilities integrated, we are seeing benefits we could not have imagined when we started this journey."
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