Madrid modernises a tourism machine

Visitors experience Madrid through its open-air terraces, midnight dinners, crowded plazas and galleries filled with masterpieces. They move between the Prado Museum, the tapas bars of La Latina, the boutiques of Salamanca and the football frenzy around the Bernabéu and Metropolitano.

What tourists rarely see is the administrative engine that keeps one of Europe’s busiest capital cities functioning day after day.

Madrid City Council is now rebuilding much of that engine through a major SAP modernisation project covering finance, taxation and human resources. In a case study presented at Sapphire 2026, SAP’s flagship European conference in Madrid, delegates heard that the project extended a relationship with SAP that began in 2004 and moved into private cloud infrastructure in 2020. The latest phase introduces RISE with SAP and SAP Business Technology Platform, consolidating municipal systems into a unified digital environment.

For a city whose tourism economy depends heavily on restaurants, hotels, retail districts and entertainment venues, the systems running behind the scenes have become increasingly important. Madrid’s café terraces alone form part of the city’s identity, spreading across pavements and plazas from Malasaña to Plaza Mayor.

The city says two-thirds of its tax revenues are already managed within the new environment, including property tax, urban waste tax for business activities, capital gains tax and terrace tax collections.

Madrid has also integrated SAP Tax and Revenue Management into its financial platform, allowing tax collection and financial administration to operate within the same system.

During the first year of the project, the municipality cleaned and harmonised records from earlier systems, cross-checking identities and addresses against police databases, the Spanish Tax Agency and the municipal street registry.

“SAP technology offers us an extraordinary opportunity to accelerate our digital transformation and make the vision of a more efficient, innovative, and citizen-centric local government a tangible reality,” said Juan Corro, IT manager of Madrid City Council (IAM). “This project marks a paradigm shift: we are moving from managing paper files and isolated systems to managing information and processes in an integrated and intelligent way, with a 360-degree view.

“As a major capital city, Madrid has both the responsibility and the opportunity to position itself at the forefront of administrative modernisation, serving as a benchmark for other municipalities.”

The municipality says automation and AI capabilities built into the ERP system are improving operational efficiency through functions such as automated bank reconciliations and budget allocations.

Madrid also says the “paperless” administration model has been consolidated, with HR requests handled digitally through the municipal intranet.

Carlos Lacerda, senior vice president and managing director of SAP Southern Europe, said: “SAP remains firmly committed to the Spanish public sector, which we have supported in its modernization processes for decades. This project is a benchmark for advanced digital administration and demonstrates how technology can act as a strategic enabler to simplify processes, integrate information, and strengthen real-time data-driven decision-making, laying the foundation for a more agile, innovative, and service-oriented public administration.”

The project also introduces a subscription and pay-per-use IT model intended to reduce upfront infrastructure costs and allow systems to scale according to municipal demand.

Madrid says the platform will support future integration of AI and advanced analytics as the city develops broader smart administration capabilities.