For many businesses, using enterprise resource planning (ERP) software and artificial intelligence (AI) offers a cost-effective way to operate their business, create a user-friendly experience, and easily manage data.
But the world of AI-powered ERP solution software can be intimidating. Before deciding if you should integrate AI into your business’ ERP software, it’s crucial to understand how the two work together – and therefore work for you.
What is an ERP, and how does it work?
By definition, ERP is a form of “integrated management of main business processes, often [used] in real-time and mediated by software and technology.”
Simply put, ERP is a system used to organize and manage routine business processes, including accounting, project management, and supply chain operations.
What are the primary business benefits of an ERP system? When configured to a business’ individual needs, ERP allows for new levels of operational effectiveness, customer responsiveness, employee satisfaction, and profitability.
When it comes to what we like to call “back office” functions (e.g. finance, HR), there’s no limit to what an ERP system can do. By acting as a virtual manager, it transforms a company through streamlining and simplifying information to run more productively. This type of operation allows your standard business processes to become strategic differentiators – putting you ahead of your competition.
Who are the primary users of ERP systems? Any company, in any industry, looking to streamline its processes. According to a recent report, the popularity of ERP will continue to grow, with spending estimated to reach $78 billion by 2026.
What is artificial intelligence?
Britannica defines artificial intelligence (AI) as the “ability of a digital computer or computer-controlled robot to perform tasks commonly associated” with humans.
For many, this type of technology seems like something reserved for movies such as The Terminator or Blade Runner – but AI is simply a type of computer science that allows us to build machines capable of performing tasks that typically require human intelligence. In fact, most of us interact with it daily. Smart assistants such as Alexa and Siri, streaming services, and speech recognition software are all forms of artificial intelligence.
The benefits of using artificial intelligence in business are endless, including the automation of data-heavy tasks, governance, and visualization. This type of technology can also speak, read, respond, predict, and execute transactions
The Harvard Business Review recently defined seven categories of AI:
- AIOps: Analyzes big data from various IT tools and devices to automatically spot and react to issues in real-time.
- Computer vision: AI used to train computers to interpret and understand the visual world. By using digital images, computers are able to identify, classify, react to the images they “see.”
- Explainable AI: A user-focused form of AI that will help users understand and interpret predictions made by AI. This helps them more effectively manage the data put forth. Organizations such as the Defense Advanced Research Projects Agency (DARPA) are working on this type of AI.
- Machine learning: A large amount of data is fed into an algorithm, which the computer then uses to learn and train itself. Google’s search engine is an example of machine learning.
- Deep learning: A layered type of machine learning.
- Natural language processing (NLP): Used to help computers better understand, interpret, and manipulate human language.
- Robotic process automation (RPA): The automation of basic tasks using business logic and rules. RPA “bots” are used for highly repetitive tasks (e.g. process transactions, manipulate data, respond to queries).
AI can be applied to business processes in almost every industry. In fact, a recent report by McKinsey found that half of large businesses had implemented AI by 2020. Amidst the Covid-19 pandemic, 3 in 5 companies actually increased their AI usage.
Like ERP software, the AI industry is on an upward trajectory, with worldwide spending expected to reach $98 billion by 2023.
How do ERPs and AI work together?
AI-enabled ERP systems work to influence the day-to-day operations and processes of a company. By streamlining routine tasks, eliminating human error, and reducing operating expenses, companies boost human capabilities while increasing efficiency.
Using AI in ERP systems can help a number of business operations, including:
- Customer service
- Data mining
- Demand planning
- HR-related tasks, such as matching candidates to open positions
- Sales automation
- Warehouse management
Is the future of ERP in AI? We’ll put it this way: Combining AI with ERP allows businesses to be cost-efficient, provide a good user experience, and manage both structured and unstructured data.
Should my company use an AI-driven ERP system?
When a company is deciding whether or not to invest in AI ERP, it’s not a yes or no question. It’s more a question of at what point a company begins to view AI ERP as a luxury or necessity.
There are two questions an SMB owner should ask in order to determine if it’s a good fit for them:
- Is it more productive to save money by not investing in this type of ERP?
- Are we missing opportunities if we delay or avoid AI ERP implementation?
Consider, too, how the decision to implement or not implement this type of ERP will impact the organizations’ specific operations.
Regardless of an organization’s size and scope, it should operate at the speed of the market. AI ERP can offer tremendous value for businesses of all sizes and markets.
That’s right – AI ERP is not limited to just large companies. Small and large businesses alike want to add flexibility and automation to their operations. Regardless of if your small or large organization is looking for faster analysis, smarter decision making, or more productivity, AI ERP will deliver benefits both now and in the future.
VIRTUTEM works with companies to provide the power of choice in enterprise solutions and how they are deployed. Speak with us today to learn how we can help you find the best solution to fit your business needs.
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