The following matches your expected output for survivor, but I am not sure of your logic for customer 2 as all rows seem the same:
SELECT "Source System",
"Customer ID",
"Customer Name",
CASE WHEN ROW_NUMBER() OVER(PARTITION BY "Customer ID"
ORDER BY CASE WHEN "Source System" = 'SAP'
THEN 0
ELSE 1
END)
= 1 THEN 'Y' ELSE 'N' END AS "Survivor"
FROM T