Did someone say “AI-enabled ERP?”

Tin man

Oh, artificial intelligence. Oh, AI. Oh, how you are taking over every conceivable corner of the world. Or maybe, you’re not. This is because an AI takeover is hypothetical. It’s one of those futuristic scenarios where AI is pegged as the master of intelligence on planet earth and where computers or robots grab everything in their reach, taking control away from us humans. Ouch.

For anyone who’s ever commanded Alexa to brew their morning coffee or talked with a customer service rep who’s not a real person, but rather, a bot, you know that AI is more than just a buzzword. It’s now at center stage, sharing the spotlight, as it were, with everything from reasoning, knowledge representation, planning, learning, natural language processing, perception and the ability to move and manipulate objects.

But it’s traditional AI, best defined by statistical methods, computational intelligence, and old-school symbolic AI that’s got the conversation going in world of ERP. The potential of AI to enhance business processes by being embedded into an ERP system, is more than fiction; it’s primed and ready to roll.

Where the elite… meet

Fusing AI with ERP is a good thing. Although AI-enabled ERP could potentially phase out some routine jobs, primarily those associated with an assembly line or a call center, the upside is that AI-infused ERP will give way to higher-level positions, so that somebody’s actually able to manage this newfangled technology.

But when the elite do meet, they’ll collectively open the doors to a whole new world of innovation. AI used to be managed by a select few, those uniquely skilled programmers and data wizards, once way too costly for an organization to employ in-house. Today, however, businesses who are thinking about replacing their legacy systems with a modern ERP, can and should consider the benefits of AI – inside.

With AI implemented into an ERP system, companies can effectively enhance decision-making capabilities, automate data output and overall, improve business efficiency beyond ERP. This includes integrating data collection at various points-of-sale, more efficient customer relations management, and exceedingly more accurate inventory control. AI also lends itself to other areas of the business, enabling customer, vendor, and product information to be collected, structured and analyzed. It is here that enhancing customer service and the customer experience, the no. 1 challenge for any company, can be achieved by optimizing the integration of data and processes between suppliers, manufacturers, distributors, retailers, and customers.

Putting AI to work

Here are five real-life benefits gained by empowering ERP with AI capabilities:

  1. Eliminate tedious tasks. Already used by call center agents to recommend answers to customer questions and make up-sell and cross-sell suggestions, chatbots can also eliminate valuable time and resources spent on trivial supply chain related tasks. Global online retailer, Amazon, already communicates with customers using AI-driven automated messages.
  2. Reduce shipping costs. Global supply chain managers can use sensors to track the exact location of ships, containers, and trucks while using AI to route packages more efficiently. Courier service provider, UPS, says, “For every mile its drivers in the US are able to reduce their daily route, the company saves nearly $50 million a year.”
  3. Improved inventory management. AI can automate the labor-intensive task of finding items while identifying inventory and order patterns to reveal which items are selling and should be restocked first. The Lowe’s LoweBot, deployed in its San Francisco locations, used a searchable computer display, advanced voice recognition, and laser-based sensors to find the exact location of products inside the store and to make demand forecasts for new purchases.
  4. Faster delivery time. Timely delivery, the last step of the sales process, can be the most important for customer satisfaction. AI-based tools can prioritize immediate deliveries and then group orders based on distance, time and load capability. Amazon, for example, was granted a patent for what it calls “anticipatory shipping,” by placing products in warehouses based on the most likely destination to speed up deliveries.
  5. Optimize procurement. According to Gartner, procurement technology vendors are using AI to increase efficiency. By analyzing historical trends and business risk data, procurement managers can derive suggested discount rates on invoices, optimize cash flow, and create the optimal balance between buyers and suppliers. AI agents can now operate on behalf of the buyers and sellers to locate potential deals, and automatically and anonymously negotiate the best terms based on real-time data and market conditions.

But being armed with AI is not enough. To optimize the supply chain, ERP systems must be open and flexible to integrate with partner, supplier, and customer systems to provide automated, AI-based communications.

When all is said and done, ERP with real-time visibility into business operations enables organizations to make better-informed decisions. By automating labor-intensive error prone tasks, employees can be more responsive to customers, leaving more time for creative and strategic tasks. ERP provides the glue along the customer journey, where, by optimizing each and every step, companies can improve the customer experience, and in turn, boost productivity.

With the immense opportunity to increase profitability and customer satisfaction, it’s only a matter of time before AI is embedded into all modern ERP systems.

The Author
Efrat Nakibly
Director of Consulting, Priority Software U.S.

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