Revolutionize ERP with Artificial Intelligence
February 16, 2024
In an increasingly challenging business environment, middle-market organizations must continue to strategize for longevity and growth. The economy, consumer sentiment, and rapid changes in technology remain top challenges for these organizations. As the new year unfolds, middle-market organizations are still facing hardship with inflation, high interest rates and talent retention. To remain competitive, organizations must be adept at managing the intricacies of business, and optimizing systems to speed up customer responses, automate repetitive tasks, consolidate data, and improve overall team dynamics will be paramount in doing so. While numerous software solutions exist—offering businesses a competitive advantage—the extensive features and advantages of an Enterprise Resource Planning System (ERP) are essential for organizations to accomplish their objectives.
ERP Systems
ERP systems offer real-time software solutions in a single platform. These solutions help companies run their entire business, supporting automation and processes such as finance, human resources, manufacturing, supply chain, services, procurement and more. In a recent ERP Market Report, Spend, Trends, & Opportunities in 2024, HG Insights highlights ERP solutions represent 16.8% or $171.7 billion IT spend out of a projected total global software spend of $1.02 trillion. Over half of the IT decision-makers surveyed highlighted ERP systems as an investment priority.1
“The one constant change in business is change. ERP systems empower organizations with the agility needed to pivot and continue to digitally transform with the pace of change,” stated Jim Holman, Digital Advisory Services, Strategy and Operations Leader.
Evolution of ERP Systems
ERP systems, originally introduced in the 1990s, were defined as unified databases of information across an organization. These systems evolved to include additional business functions enterprise wide. At the end of the same decade, cloud ERP was introduced, significantly enabling organizations to access data via the internet.
In 2000, ERP systems improved to gather data from all sources of the organization, including front-end and back-end applications, making these systems inclusive in both data and business functions enterprise wide. With the advent of Artificial Intelligence (AI), it is widely anticipated that ERP will radically change the way businesses and processes are managed.
AI-Enabled ERP Systems
Technology systems with AI-enabled applications simulate human reasoning and intelligent behavior. The transformative power of AI is currently reshaping the business landscape across industries and will continue to define the state of technology in the upcoming years. Its growth and influence are astonishing as the AI market is projected to reach $407 billion by 2027.2 From cell phones, robotics and self-driving cars to smart assistants, AI’s rapid evolution, while met with some trepidation, creates operational strategies and unlimited opportunity for mid-market organizations.
With AI augmenting the effectiveness of ERP systems, these systems will elevate to an entirely new level of performance. AI-enriched ERP systems assist organizations in optimizing their operating models, processes, software applications, governance and technology infrastructures. With AI-infused applications, systems can analyze vast amounts of data, predict issues, and enable more precise forecasting and planning to drive better decision-making, and thus fuel a new level of organizational performance. New capabilities where AI is enhancing ERP systems may include:
Finance and accounting: As we talked about in our October 2023 article, Cloud-Based Accounting: Sage Intacct’s Modern Solution for Business, middle-market businesses and financial teams are streamlining accounting processes and leveraging digital technologies and data to automate and drive growth. AI-enabled ERP systems automate repetitive tasks such as reporting, payables/receivables processing, supplier onboarding, procurement, auditability, and expense and cashflow management. This enables finance teams to focus on high-impact strategic activities.
Predictive analytics and forecasting: Leveraging historical and current data, AI can make predictions and recommendations for operations activities. Areas such as production planning, inventory management, and demand forecasting can be transformed through predictive analytics. Suggestions can be applied and automated to drive better outcomes. Additionally, patterns, trends, and areas of concern can be identified with the appropriate improvements applied to mitigate risks.
Customer service: In a Salesforce State of the Connected Customer Report, 72% of consumers reported loyalty to companies that provide faster service.3 AI-embedded chat bots across channels can instantly streamline the customer experience. Available 24/7, these bots can provide immediate answers and navigate customers to solutions, increasing productivity and driving efficiency. Products like Salesforce’s Einstein leverage predictive and generative AI to drive productivity and personalization to every customer experience.
Human resources: Organizations are leveraging smart assistants to onboard new employees, delivering a consistent first-time experience. Additionally, smart assistants are being used to assist in employee learning and career development. Likewise, AI is being used to analyze job applicants and track the candidate-to-hire journey to identify trends and enhance the recruiting process.
ERP Platforms Incorporating AI
AI-based ERP is already part of many known platforms, including:
Epicor ERP Systems: An industry-specific software used to manage business processes company-wide, developed AI-enabled EVA Epicor Virtual Agent. Powered by Microsoft’s Azure AI platform, EVA is a user interface connected to the Epicor system accessed by either text or voice that uses natural language processing to answer questions, provide links and perform routine tasks. EVA can recommend, predict, and adjust items within the ERP, including delivering alerts and performing actions based on events, statistics and historical events. Epicor-enabled AI capabilities have helped manufacturers, sales and marketing, and retailers deliver better precision and accuracy in their services.
Oracle Cloud Infrastructure (OCI): A generative AI service, embedded across NetSuite, introduced NetSuite Text Enhance in October 2023. NetSuite Text Enhance drafts personalized contextual content using NetSuite data. NetSuite’s Text Enhance composes a first draft of content where users can then assess and revise, significantly minimizing draft time and enhancing productivity. Use cases for Text Enhance can be applied to Legal, Sales and Customer Support, Marketing, Human Resources, and Finance and Accounting industries, to name a few.
SAP cloud-based ERP solutions: These solutions offer a suite of platforms to streamline operations and improve decision-making, offering real-time, predictive analytics and machine learning capabilities. With generative AI integrated, the ERP system leverages industry-specific data and process knowledge to create a powerful and responsive solution for organizations.
Selecting AI-Powered ERP Systems
Advancements in the evolution of AI technology will continue to elevate performance of ERP systems. Effective ERP implementations will generate ROI and provide immediate benefits to an organization. Determining the right solution—whether it’s integrating AI capabilities into an existing ERP system or selecting the right ERP system for an organization—can be a huge endeavor.
Scalability, real-time data, and dependence on human input are stand-alone features that should be evaluated. When implementing ERP systems powered by AI, it is important to thoroughly evaluate factors such as data quality and integration, data privacy, expertise, compatibility, cost, and ethical and legal considerations. Partnering with an experienced consultant specializing in AI technologies and ERP solutions can help guide an organization through every stage of their ERP implementation to help maximize their investment.
Ready to harness the power of an AI-powered ERP system?
The Era of AI is Here: How Cherry Bekaert Can Guide You Forward
Integrating AI into ERP systems enhances agility, scalability and competitiveness, empowering organizations to adapt to dynamic market conditions and drive growth effectively. Cherry Bekaert’s Digital Advisory practice can help your organization with digital transformation or ERP-related issues. This includes strategy development, validation, selection and project assurance. To learn more about how we can help with your ERP deployment, please reach out to us today!
Notes:
- “2024 ERP Market Share, Size, & Trends Report,” HG Insights, last modified September 26, 2023, accessed February 8, 2024, https://hginsights.com/market-reports/erp-market-report.
- Katherine Haan, “24 Top AI Statistics And Trends In 2024,” Forbes Advisor, last modified April 25, 2023, https://www.forbes.com/advisor/business/ai-statistics/.
- “Salesforce Report: Nearly 90% of Buyers Say Experience a Company Provides Matters as Much as Products or Services,” Salesforce, last modified May 10, 2022, https://www.salesforce.com/news/stories/customer-engagement-research/.