Some of the most exciting capabilities of current ERP systems — the ones with the potential to put ambitious new business goals within your reach — are the ones that leverage the impressive recent advances in artificial intelligence.
Experienced leaders know that to reap the rewards of new technology, you need to be clear-eyed and fully aware of the potential rewards and opportunities, as well as the pitfalls that need to be avoided.
What do you need to know to take full advantage of the fusion of ERP and AI, without running into unexpected obstacles and dangers? Ultimately, there's no substitute for careful planning, forethought, and guidance from ERP experts.
How Do ERP and AI Work Together to Benefit Business?
One of the most important ways that AI boosts the capabilities of ERP systems is by helping companies recognize patterns and make predictions. With AI-powered ERP software, you can forecast everything from sales and cashflow to supply chain disruptions and the need for preventive maintenance of equipment.
This pattern detection plays out in all kinds of valuable ways. With visibility into open purchase orders, for instance, AI can spot when a supplier with multiple orders is late with one of them, assess the implications for the other orders, and call that to your attention so you can communicate with the supplier as needed. You may be able to resolve the situation easily with a two-minute email, where previously it might not have come to your attention until it was too late.
It's especially helpful to have AI monitoring things like potential shipping disruptions. Whether it's a ship blocking the Suez Canal or ports closing due to the outbreak of war, it can make a huge difference to have a system that keeps track of shipping details and alerts you to possible delays an extra day—or even an extra week—in advance.
How AI Boosts Workplace Productivity
Another of AI’s real superpowers is its ability to help team members spend less time on tedious drudge work and more time on higher-level tasks.
AI is tremendously effective at bypassing writer's block, for example. It can expedite critical tasks like summarizing business meetings, generating sales or purchase agreements, and writing business correspondence along with other business documents.
Consider the new Microsoft Copilot, which is integrated with Dynamics 365. It combines the power of language models with your business data—including all your Microsoft 365 apps, documents, and conversations. It can help you:
• Write documents in Word by generating text and suggesting edits
• Analyze and visualize data quickly in Excel
• Bring ideas to life impactfully in PowerPoint
• Create efficient communications in Outlook
… and much more.
How AI Helps Elevate Customer Service
AI can take customer service to a higher level by helping customers get the information and help they need in a timelier manner. It can also ensure that customers get their deliveries faster by solving or preventing supply chain and logistics issues. Automatic certain customer service tasks with AI means less waiting and happier customers.
What Key Trends Are Driving the Adoption of AI in ERP systems?
One of the most potent factors fueling interest in AI right now is the success of tools like OpenAI's ChatGPT, DALL-E, Midjourney, and Adobe Firefly. These tools have democratized AI by making it widely accessible in an easy-to-use format. In just the last couple years, the average person’s eyes have really been opened to AI’s possibilities.
But contrary to what most people think, AI didn't just burst on the scene overnight— it’s been under the hood of many business software programs for years, slowly developing its capabilities and enabling more sophisticated tools.
Microsoft in particular has been at the forefront of this. Remember Clippy in MS Office? That was an early example of an AI-powered assistant. Cortana was another step along the path.
ERPs have been drawing on the power of AI for years now to analyze patterns and trends and make better forecasts and predictions. Microsoft's Dynamics 365 has been a leader in this effort as well.
These days, Microsoft's Power Apps are a great example of how Microsoft helps companies harness the power of AI to boost and extend their abilities. With Power Automate, for example, you can easily make use of robotic process automation (RPA) and digital process automation (DPA) to automate recurring tasks and create automated workflows using low-code drag and drop tools. With Power Automate, you can even explain a problem in English and have it create a solution for you.
So instead of needing to know how to write a SQL query, you can just say something like, “Hey, I want a list of all customers that spent at least $100,000 worth of product from us in the past, including something from this particular product line, but haven't bought from us in the last six months" — and Power Automate will know how to build that query and then either display it in a Power BI view, use it to feed a mass mailing, or do other useful things with it. Which makes it possible to get what you need out of systems without having to understand all the bits and bytes involved.
Likewise, the power of predictive analytics, and the machine learning and forecasting tools that are built into ERPs like D365, mean you don't need to be a data scientist to analyze and visualize data in new and powerful ways — helping you see the road ahead so that you can run your business in a proactive (rather than reactive) way.
Setting Guardrails: Navigating Potential Risks
With power comes responsibility, of course, and a need to be clear-eyed about the possible downsides and pitfalls of leveraging AI within an ERP system.
Navigating these issues successfully comes down to making sure you have the right guardrails in place and that they aren't circumvented.
One of the most critical issues is to make sure that your data is tagged correctly by setting up good IT governance. What data should only be used within the walls of the company? What should be limited to people with specific levels of access?
For example, consider a publicly traded company. If their financial results are inadvertently released before their 10-K is published, the SEC could punish them for it. AI could accidentally leak that kind of data if the right guardrails aren't in place to prevent it.
Making sure data is correctly tagged can be a complicated process, and a lot of companies, especially smaller ones, may not have the necessary skills in house. That's an area where a partner like Columbus can step in and help.
Copyright and intellectual property is another area where strong guardrails need to be set up. The Writer's Guild strike recently drew attention to this issue. For businesses, the question is: How do you make sure that your data and intellectual property aren't appropriated and leveraged without your permission? This is another reason why data needs to be carefully tagged and protected before it's released.
There's a major change management component to this issue as well. It's vital to make sure that employees are aware of the risks and understand the proper procedures to safeguard data, as well as which tools are appropriate to use and which aren't. Policies also need to be created to make sure that employees don't circumvent the guardrails, intentionally or unintentionally. Making sure team members are trained in a consistent and ongoing way is crucial.
How Can Enterprise Businesses Prepare for a Future Shaped by AI and ERP?
With all of the above in mind, you can’t let the risks of new technology dissuade you from moving forward. Your competitors will be taking advantage of these tools, and you can't afford to be left behind.
The key is to implement these tools in a disciplined and measured way, staying cognizant of the rewards and possibilities, as well as the potential pitfalls. This is another area where having an experienced partner like Columbus by your side can help you steer the ship successfully.
Want to learn more about how Columbus can help your organization harness the full capabilities of AI? Get in touch with us today.