AI In ERP: Are You In The Loop About The Latest Developments?

As more ERP vendors, particularly the top ERP vendors, incorporate artificial intelligence (AI) capabilities into their products, we’ve been trying to keep organizations apprised of the developments. With the number of possible business use cases for AI expanding by the day, we will do our best to keep you current.

The Role of AI in Business

Increasingly, businesses are leveraging AI, including generative AI, to gain efficiencies and sharpen their decision-making. Many are looking at the software they’re already running and finding ways to incorporate AI into these ERP, CRM, and SCM systems.

AI in ERP learns from the information that users provide it or permit it to access. It then provides intelligent insights using capabilities such as predictive and prescriptive analytics.

For example, our ERP consultants often help organizations explore how to use AI insights to make decisions about what suppliers to engage or where to offer discounts. This requires reliable ERP data and the implementation of the right machine learning models.

In these scenarios, human employees are still required to make the final call on important financial and operational decisions.

While it may seem as though the ideal way to use AI in ERP would be to make the platforms fully intelligent, this won’t happen any time soon. The human touch is still required, especially when it comes to considering factors in the external world that are beyond the AI’s knowledge.

For example, AI in financial forecasting can use external data, such as stock market data, as context, but think about all the external context it doesn’t have access to. This is where humans are essential.

Benefits of AI in ERP

While AI is already present in some core ERP functionalities, it will soon be commonplace across a variety of functional areas.

In fact, our latest report discusses some very specific use cases that show just how powerful AI integration can be. Take a look:

The 2023 Top 10 Field Service Software Systems Report

By integrating AI into ERP, companies can improve workforce performance across various functions, including accounting, human resources, customer service, supply chain management, and more.

An AI-driven ERP system can identify patterns in even the largest volumes of data, whether structured or unstructured. Then, the system can provide predictive insights that help organizations optimize workflows and find cost savings opportunities.

For example, operations teams can use predictive maintenance capabilities to anticipate equipment failures. Meanwhile, logistics teams can use intelligent data to identify areas for improvement in first and last mile logistics.

Even before generative AI entered the business world, companies were using predictive analytics for a variety of business purposes. Walmart, for instance, was able to use AI-driven analytics to . . .
• Anticipate replenishment needs
• Optimize product assortment
• Implement a dynamic pricing system

Another use case is in accounting. Artificial intelligence can analyze ERP financial reports and call out irregularities in data entries or identify unusual transactions. This is nothing new, but what is new is the use of generative AI for financial forecasting.

Potential Risks to Understand

As vendors continue to fine-tune the AI/ERP integration, some are adding an additional layer to the baseline function of the ERP platform. This way, employees can take full advantage of the data that’s already in their system.

However, any technology with access to proprietary business data comes with its own set of risks.

When it comes to AI models, features such as predictive analysis and predictive text have raised some concerns. Users might wonder how they can verify that the information they’re viewing is complete and accurate.

They also might wonder if the AI is learning from their inputs and using this to generate information for competitors.

Until AI data storage policies are precisely defined, companies will need to take extra precautions. This means putting AI governance and data governance policies in place to ensure confidential information isn’t inadvertently shared.

Your Next Project: Implementing an AI/ERP System?

The role of AI in ERP is still being defined. However, we do know that this technology has many use cases, especially when it comes to suggesting economical solutions to common business problems.

Have you thought about how new technologies could expand the functionality of your current systems? Our enterprise software consultants can assess your current technology and determine if new integrations are possible or if a full replacement is necessary. Contact us below for an ERP consultation.