For years, enterprise resource planning projects were judged by a simple metric: whether companies could replace aging systems without disrupting business. Today, that benchmark is changing. The question is no longer whether organizations can modernize their ERP platforms, but whether those platforms can become the operational foundation for artificial intelligence.

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That shift explains why some of the world's largest technology companies are approaching ERP transformation differently. Rather than treating cloud migration as an IT upgrade, they are increasingly viewing it as the infrastructure required to support automation, AI-driven decision making and future business growth.

Nokia's latest multi-year agreement with SAP reflects that evolution.

The Finnish telecommunications giant has signed a new agreement with SAP to accelerate its enterprise transformation through RISE with SAP Methodology, with its SAP S/4HANA environment hosted on Microsoft Azure. While the announcement centers on cloud ERP modernization, the broader significance lies in how large enterprises are redefining digital transformation in the AI era.

Instead of focusing solely on replacing legacy infrastructure, companies are now restructuring business processes, data architectures and operational models so AI can eventually operate across the enterprise with greater reliability.

That distinction matters because many organizations have discovered that deploying generative AI without modern business systems often delivers limited value. AI can summarize reports, automate emails or generate content, but it struggles to create measurable operational improvements when underlying enterprise data remains fragmented across decades-old systems.

Nokia's approach reflects an increasingly common realization among global enterprises: modern ERP has become less about finance systems and more about creating trusted data environments that AI can use effectively.

A New Chapter for Enterprise Modernization

For much of the past decade, enterprise cloud migration has focused on moving infrastructure away from on-premises data centers. Today, transformation programs are becoming considerably broader.

RISE with SAP is designed around that philosophy.

Rather than functioning as a conventional software implementation, the framework combines migration methodology, cloud infrastructure, process redesign and ongoing operational improvements into a single transformation model.

Under the agreement, SAP will manage Nokia's SAP S/4HANA environment in the cloud, enabling the company to reduce the operational burden associated with maintaining enterprise infrastructure while focusing more directly on business performance and innovation.

The transformation will encompass business processes, enterprise data, applications and operating models, providing Nokia with continuous access to SAP's cloud innovations and embedded AI capabilities as they become available.

"Nokia's decision reflects a clear commitment to business-led transformation," said Manos Raptopoulos, Global President Customer Success Europe, APAC, Middle East and Africa and Member of the Extended Board, SAP SE. "RISE with SAP Methodology provides Nokia with a structured road map, integrated toolchain and continuous access to innovation. It enables the company to modernize its ERP landscape while keeping a clean core and building a strong foundation for enterprise AI."

The emphasis on maintaining a "clean core" has become increasingly important across enterprise software strategy. Instead of heavily customizing ERP platforms over many years, organizations are increasingly adopting standardized cloud architectures that make future upgrades, automation and AI deployment significantly easier.

Why AI Is Changing ERP Priorities

Artificial intelligence has introduced new expectations for enterprise software.

Traditional ERP systems were primarily designed to record transactions, manage financial reporting and coordinate business operations. AI systems, however, require consistent, structured and accessible enterprise data before they can deliver meaningful business insights.

This has elevated ERP modernization from an operational necessity to a strategic investment.

Industry analysts increasingly view cloud ERP as one of the foundational technologies that enables organizations to deploy AI at scale. Clean enterprise data, standardized business processes and integrated applications allow AI systems to generate recommendations that executives can trust.

Without those foundations, AI often produces inconsistent outcomes because it relies on disconnected information spread across multiple business systems.

For global organizations operating across numerous countries and business units, this challenge becomes even more pronounced.

Nokia has already been consolidating multiple ERP systems into a unified SAP S/4HANA landscape as part of its broader enterprise transformation program. The new agreement extends that effort through a structured methodology designed to reduce operational complexity while creating a more scalable technology environment.

"This agreement builds on our existing work with SAP and Microsoft and supports Nokia's ambition to secure how we run our core business operations," said Marek Očkay, VP, Global Head of IT Procurement & Vendor Management, Nokia. "By applying RISE with SAP Methodology on Microsoft Azure, we are strengthening a structured and future ready path for business growth, one that simplifies our ERP landscape, enables continuous innovation and strengthens our commitment for AI driven processes."

The initiative also builds upon Nokia's existing deployment of SAP technologies supporting finance, logistics, master data governance, warehouse management, global trade services and advanced supply chain capabilities.

Over time, AI-enabled functionality embedded within SAP's cloud applications will become part of that operating environment.

Microsoft Azure Becomes the Enterprise Foundation

Cloud infrastructure has become another defining factor in large-scale enterprise transformation.

Rather than operating workloads across multiple disconnected environments, many multinational organizations are consolidating mission-critical applications onto hyperscale cloud platforms capable of supporting increasingly sophisticated AI workloads.

For Nokia, Microsoft Azure will provide the infrastructure supporting its SAP transformation.

The company already operates portions of its SAP environment on Azure, making the broader migration a continuation of an existing cloud strategy rather than a complete architectural overhaul.

Consolidating workloads on a single platform is expected to improve operational resilience, security, performance and system responsiveness while simplifying long-term infrastructure management.

The collaboration also highlights how enterprise transformation is increasingly becoming a multi-partner effort rather than a single-vendor implementation.

SAP will oversee the ERP environment, Microsoft will provide the cloud infrastructure, and Nokia will continue aligning business operations with its long-term digital strategy.

"This collaboration demonstrates how cloud platforms, enterprise applications and AI can come together to support complex, global business transformations," said Joacim Damgard, CVP, Europe North Microsoft. "By running SAP S/4HANA on Azure within the RISE with SAP journey, Nokia is creating a scalable and secure foundation for continuous innovation."

What It Means for Global Enterprises

Although Nokia's transformation is centered on a multinational telecommunications company, its implications extend far beyond one organization.

Across North America, businesses are investing heavily in enterprise AI initiatives, but many continue to discover that successful AI adoption depends less on selecting the latest model and more on modernizing the operational systems that feed those models with reliable data.

The same trend is becoming increasingly visible across the Gulf region.

Governments throughout the GCC have prioritized AI as part of broader national economic strategies, while enterprises are accelerating investments in cloud computing, cybersecurity and intelligent business applications. As organizations move from AI experimentation toward production deployments, modern ERP environments are emerging as essential components of that transition.

Instead of treating ERP as back-office software, executives are increasingly positioning it as the operational backbone supporting automation, predictive analytics and AI-driven decision making.

That represents a meaningful shift in enterprise technology priorities.

Successful digital transformation is becoming less about individual software deployments and more about building integrated technology ecosystems capable of evolving continuously as AI capabilities mature.

For companies navigating increasingly competitive global markets, that flexibility may prove as valuable as the technology itself.

Nokia's agreement with SAP illustrates that enterprise transformation is entering a new phase, one where cloud ERP, standardized business processes and AI are no longer separate initiatives but interconnected elements of a broader business strategy designed for long-term resilience and innovation.

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