Legacy enterprise resource planning (ERP) systems have for too long held large organisations back from responding fast enough to challenges and opportunities, making them vulnerable to digital disruption. Finally, cloud systems driven by artificial intelligence (AI) are providing the agility companies need to survive
In a business landscape where traditional barriers to entry are being torn down by new technologies and startups are disrupting long-standing incumbents, agility is central to long-term success. The ability to respond quickly to opportunities and threats is vital and AI is one way to do this. Martin Clothier, technical director at Columbus UK summarises: “An AI-enabled business is one with a competitive advantage”.
However, for large organisations underpinned by complex ERP systems that touch every part of the business, agility can be difficult to achieve. They’re highly customised and so closely intertwined with operations that any change to the business will typically require a change in ERP. If it’s slow and inflexible, the business probably is too.
When back-end communication and processes are tied into a complicated, legacy ERP system that is hard to change, the outputs from the system will mirror this. Most of these systems have become worryingly old due to the sheer costs of replacing them, but by failing to do so, businesses are not achieving the agility they need to compete.
“While this model has been fine for existing operations, the world has moved on,” says Craig Lodzinski, chief technologist for data and emerging technologies at Softcat. “The volume of data, and the speed at which it is required, have grown exponentially and legacy systems were never designed for this.”
There are numerous areas where the impact of AI within ERP systems can already be felt
Cloud computing is enabling organisations to reverse this tide. Many cloud ERP systems now support mobile application generators, which enable employees to create applications in minutes, with little technical experience required. This means they can quickly access the data and documents they need to do their jobs out of the office.
Moving core functions to the cloud not only increases efficiencies, but through greater visibility into what is happening, it also enables businesses to respond more quickly to incoming demands. AI and machine-learning are now taking this to the next level powered by the millions of datapoints collected by cloud ERP systems.
There are numerous areas where the impact of AI within ERP systems can already be felt, particularly in warehouse management and supply chains. With so many players involved in the supply chain, there are ample business processes that can be optimised using AI. Insights then garnered from advanced analytics enable companies to anticipate and react to changes, improving productivity and delivery speeds.
“Machine Vision coupled with Machine Learning is bringing about a revolution in quality assurance operations” says Mr Clothier. “It automates quality inspections and raises product defects within the business application automatically. The role of the human quality operative then becomes one of handling the exceptions detected by the AI, freeing them from the laborious visual inspections of old.”
The most successful examples of automation in the area of cloud ERP are the ones where AI technologies are applied to deliver greater insight or provide an enhanced user experience, typically for forecasting in corporate performance management or the use of natural language programming to create a more conversational user experience.
Both these examples are around making data more meaningful, easier to generate and more consumable. This ensures business users have information at their fingertips and can make better, more informed decisions, as well as reacting to and resolving issues and emerging trends quickly, providing that much needed agility.
Mr Clothier explains, “Insights gleaned from the analysis of large volumes of transactional ERP data are unlocking swathes of initiatives to solve problems that were previously going undetected.”
The next few years could bring the emergence of truly self-driving enterprise software solutions, with core businesses processes being completed with no human intervention other than when data discrepancies or errors occur. By reducing the time spent on mundane tasks, human resources can instead be directed to more strategic activities that add greater value.
Claus Jepsen, deputy chief technology officer at Unit4 explains: “We’re already witnessing the rise of next-generation conversational user experiences which in combination with special, designed task-focused apps, allows new interaction patterns based on proactive data analysis driven by machine-learning.”
AI and machine-learning technologies will eventually become another back-end service that organisations sit underneath applications, much like a Linux or MySQL server. Given the importance of ERP and its data, it is likely these technologies will play a starring role in turning it from the workhorse process engine of the enterprise into something that enables doing, thinking and the agility companies need to thrive.