AI Adoption and the Future of ER

We’ve had an ecosystem tradition to share great “Christmas in July” content this month -- to keep us energized and engaged during the summer heat waves. Harkening back to that tradition, this week, we’re heading back to Vegas, baby, and sharing our third and final K24 series on ERP modernization!

As we wrap up this blog series, let's take a moment to recap what we've covered so far: 

• In Part One – available here - we explored how an organization’s vision for a more modern ERP has evolved to embrace today’s market realities. We also shared trends and strategies companies are deploying today as they unify their various systems of record under a modern and efficient system of engagement. (Spoiler alert: Workflows are game changers!!) 
  
  
• In Part Two – available here – Wright emphasized the importance of transforming business units by leveraging new technologies to create more holistic stakeholder experiences. Modernizing ERP involves integrating systems to eliminate inefficiencies, fostering better engagement, and enabling organizations to adapt rapidly to changing market demands – citing specific “low-hanging” solutions. 

Today, we’re looking at AI Adoption and the Future of ERP 

That’s right. This article is coming at you with a whole bunch of trending terms like deep language mining models, Generative AI, and modern, intuitive experiences. 

But why is expert after expert, from the Forrester to Fortune, all decrying that AI and the focus on experiences will accelerate change more than any other tech advance of this century? Current tech advances are changing the innovation curve – driving new advances in months not years. We’re about to see (or are truly in the middle of) an exponential rate of change in business unlike we’ve ever seen before. 

During this lively session, our panelists asserted that those tepidly considering that AI can either be on the front end of that transformation, guiding and informing the next steps; or might find themselves updating their resumes while someone who champions this change takes the reins. 

The Age of AI Adoption

AI is transforming ERP in unprecedented ways, making systems leaner and more efficient. This transformation is not just about technology but about reshaping business processes and structures. AI, especially generative AI, brings new levels of efficiency and engagement to ERP systems, creating a seamless experience for users. 

However, for AI to have a meaningful impact, it must be integrated into a consistent system of engagement, rather than being dispersed across disconnected processes. At Knowledge 24, our panelists – including CoreX CEO, Rick Wright, noted that without a consolidated system of engagement, AI cannot be effectively utilized. 

AI adoption in ERP is more than a technological upgrade; it's a fundamental shift. By integrating AI into a consistent system of engagement, organizations can unlock new efficiencies, enhance user experiences, and drive significant value. As AI continues to advance, its role in ERP will become increasingly pivotal, shaping the future of business operations.

In fact, with the right data structure behind it, AI significantly boosts operational efficiency by automating complex processes and providing predictive insights. 

In sourcing and procurement operations AI can streamline vendor selection processes, predict supply chain disruptions, and recommend alternative suppliers, thereby reducing risks and ensuring continuity. 

AI can analyze past purchasing behaviors and market trends to suggest optimal buying strategies, reducing costs and ensuring timely procurement.  By integrating AI into procurement workflows, businesses can achieve greater agility and responsiveness to market changes.

The Burden of Tech Debt

So far, we’ve highlighted the need for a system of engagement to complement ERP systems, as Wright emphasizes, "It's about creating value beyond just how you create a better system of record or how you get better reporting; It's about business transformation."

This is particularly important because ERP systems, while powerful, can often be weighed down by technical debt.

Technical debt refers to the cost associated with past development choices that prioritize expediency over long-term maintainability. This can manifest in various ways, such as complex code, outdated technologies, and inadequate documentation.

ERP systems, due to their critical nature and long lifespans, are particularly susceptible to tech debt accumulation. Frequent code freezes to minimize disruption, as Wright mentioned can exacerbate the issue.

Many organizations are encumbered by decades of hard-coded customizations within their legacy ERP systems. These customizations are not only challenging and expensive to maintain but often become obsolete over time, yet they still demand resources for upkeep. Addressing tech debt is crucial for modernizing ERP systems and ensuring they remain adaptable and efficient in the long run.

ERP Modernization – What’s Next? 

In discussing the future of ERP, panelists explored the possibility of leaner teams. The consensus is that the value of ServiceNow revolves around delivering innovation faster and at lower cost and risk compared to traditional ERP-centric upgrade cycles. 

This approach not only reduces costs but also the complexity of use. Because, streamlined processes facilitated by modern ERP systems enable businesses to operate more efficiently with smaller, more agile teams.

Wright emphasizes that we are entering a new era of transformation – connecting all the pieces of the ERP ecosystem. He asserts that ERP modernization should not be viewed merely as a project to upgrade an ERP system. 

Instead, he believes it is the next stage of ERP advancement, a much wider scope of modernizing the landscape of ERP systems that you have across the enterprise. This broader approach ensures that all systems are integrated, leading to more seamless operations and greater organizational agility.

A modernized ERP landscape offers numerous benefits:

• Enhanced Flexibility and Agility: By integrating various ERP systems, organizations can respond more swiftly to market changes and internal demands.
• Cost Savings: Reducing tech debt and streamlining systems leads to significant cost savings in maintenance and operations.
• Improved User Experience: Modern systems provide a more intuitive and engaging user experience, reducing the learning curve and increasing productivity.
• Future-Ready Operations: A modernized ERP infrastructure is better equipped to incorporate emerging technologies such as AI, IoT, and advanced analytics, ensuring that the organization remains competitive.

A System of Engagement as the Answer

The future of ERP is bright. By leveraging a system of engagement, organizations can overcome the limitations of technical debt and unlock the full potential of AI and other emerging technologies. This will allow them to create a more seamless user experience, improve operational efficiency, and gain a competitive edge.

As Wright suggests "When you start to look across in these end-to-end business processes, understanding how these multiple ER systems are being leveraged – stitching them together and building a system of engagement and work that is automatically driven across ERP systems, I think that's been the big change."