Artificial Intelligence and ERP

Artificial Intelligence and ERP

Shashank Dixit
Shashank Dixit
Table of Contents
Table of Contents

“The more we digitalize, the more our prosperity is secured.” – Wolfgang Wahlster, Leader of the German Research Center for Artificial Intelligence (DFKI)

The use of artificial intelligence (AI) in the world of enterprise technology has always fascinated industry experts. The 21st century is the era of artificial intelligence and the scope of AI is widening way beyond domestic smartphone use–it has finally entered the realm of enterprise resource planning technology. With its influential and powerful capabilities, artificial intelligence technology is optimizing system operating models and transforming business processes for organizations across the globe.

Not long ago advanced AI functionalities were exclusive and expensive due to controlled and undeveloped tools. AI algorithm construction demanded highly skilled workforce, not available at most software companies. Also, CPU-intensive computing power and gigantic amount of data storage were required for the pattern recognition of these complex algorithms.

However, times have changed and current software vendors are increasingly incorporating AI functions into their ERP software. To manage this transformation, companies are refurbishing their IT strategies and evaluating the implications of artificial intelligence and enterprise resource planning integration.

“If you don’t innovate fast, disrupt your industry, disrupt yourself, you will be left behind.” – John Chambers, Former CEO, Cisco
John Chambers, Former CEO, Cisco

Impact of Artificial Intelligence on ERP

ERP software with enabled AI can heavily impact the core of organization’s everyday business processes by streamlining routine tasks, reducing operating expenses, and eliminating manual errors. AI can also be tweaked and made to learn processes for enhanced competencies that improve the effectiveness of the overall business. Advanced ERP technologies have helped businesses discover massive sums of structured data. However, there is a continuous struggle to transform the huge amounts of discovered data into something meaningful.

Cut-throat competition between different cloud vendors means reduced costs for cloud storage and cloud computing, which in turn creates the opportunity for software vendors to incorporate more complicated algorithms into their ERP systems for handling larger data sets. With AI enabled ERP software, the vast amount of data generated, complemented by the storage capacities, can be used by organizations to cut out error-prone routine tasks and optimize operational processes.

Simultaneously, workforce skill and expertise can be optimized with AI. The effectiveness of the organization as a whole can be enhanced, since focus will be directed towards non-routine, logical, analytical, and creative activities and tasks. AI and its functional agents liberate employees from monotonous, manual interactions with their ERP software by starting an evolution of semi-intelligent and self-driving business solutions.

The ERP software maintenance is another sphere that can considerably benefit from AI. AI enabled ERPs usually employ a digital assistant (DA) that can assist service technicians in finding the root cause analysis for maintenance issues. The DA provisions complete information and details of the performance, technical structure, and maintenance history of the concerned device. The DA acquires and sources information from the core ERP system and the OEM.

AI and the ERP Future

Research firm Markets and Markets in its report Artificial Intelligence Market by Technology predicts that the AI market will be worth USD 16.06 billion by 2022, growing at a CAGR of 62.9% from 2016 to 2022. And the AI under discussion here isn’t related to robots, but identifies contemporary technologies that power business processes and resolve industry disputes.

The potential of AI enabled ERP systems is enormous and far from what has been documented yet. AI is revolutionizing the ERP software landscape and is transforming the way business is performed. The data-mining capabilities of advanced self-learning artificial intelligence systems put together with the automation of ERP systems can bring about incredible value addition to any business. However, it should be kept in mind that AI is only materially useful as it can mimic unique functionalities of the human mind, such as learning and behavioural changes, and apply these emulated tactics to varied and unstructured data in ERP systems.

While a few may be advertently apprehensive about adopting AI technology, the benefits AI can usher into a business already utilizing an ERP solution are countless. Initially, some resistance can be expected as AI will essentially alter how users interact with their ERP software. But the one thing organizations need to remember is that AI technology will only better the primary focus of their business i.e. serving their customers well.


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