5 ways AI drives ERP efficiency
Enterprise Resource Planning (ERP) tools are becoming backbone of companies today. It comprises hardware and software working hand in hand to oversee the success of the design and production of products and services, followed by delivery to end-users and transactions.
Besides that, ERP is essential in other sectors of an organization as well, such as finance, human resource, procurement, and management.
With the rise of machine learning (ML) and artificial intelligence (AI), a revolutionary duo that can impact ERP drastically, are aggressively employed, as evident in the rising numbers of companies using ERP software. The global ERP software market is predicted to reach US$78.40 billion by 2026.
Organizations unaware of the full potential of AI-driven ERP risk falling behind its competitor but most importantly, losing out on money and time.
A report by 4C revealed UK tech companies manually processing contracts and agreements are facing a loss of £17 million (US$20.9 million) on average per year.
Clearly, contract automation is essential to boost efficiency by helping companies complete and secure agreements in a timely manner, leaving more time for employees to secure big opportunities and projects.
This is only one of the ways digitized ERP can assist companies, there are more applications to be seen.
#1 | Production Planning
ERP systems with insights on inventory in shops can keep track of stock and optimize schedules for production. By doing so, a consistent flow of products is being manufactured on time and delivered to various shops, meeting the demands of customers. Essentially, organizations can make sure of analytics on consumer behavior, shopping trends and optimize production plans taking into account the resources available.
# 2 | Financial Management
ERP embedded with AI will redesign how leaders manage finance in organizations. Besides saving time on automating repetitive accounting work, a significant impact can be seen in the verification of statements, fraud prevention, smoother flow in transactions and future predictions on financial results.
Human error in accounting may be eliminated from the equation with AI and ML adapting to the work style of accounts and providing tailored solutions to help them manage tasks better.
# 3 | Risk Management
Besides that, with forecast tools and greater insights into the industry, ERP systems possess risk management tools. Reports based on real-time data along with the latest business and financial news give organizations the competitive edge to identify potential risks but also secure high-value business deals. With a unified system to access organizational needs and goals, employees are given in-depth knowledge and presented a bird’s eye’s view before making a decision. In this case, the risk becomes measurable and accounted for, enriching the future decision-making process.
# 4 | Human Resources
There is some truth in “AI can help companies hire better and hire faster.”
Big companies are turning to AI to sort out thousands of applicants and pick out the most relevant ones. Recently, facial recognition technology is integrated into the recruitment process.
Even though the implementation of AI in the hiring procedure presents some concerns such as inherent biases in AI from a database, organizations would find the use of technological tools to be beneficial in managing new employees. For example, induction and training for new hires can be managed by AI. With ongoing feedback fed into the system, training sessions can be improved to meet the expectations of an evolving workforce.
# 5 | Customer Relations
The role of ERP is to manage the operations of an organization, from within and maximizing impact to outer factors like company reputation, branding, influence, and customer loyalty. In this respective, ERP systems are often combined with customer relationship management (CRM) tools to maintain the quality of customer service.
Fundamentally, chatbots are used to answer common inquiries but in some cases, more advanced chatbots may handle more complex requests from customers. In addition to that, CRM can help organizations understand the demographics and habits of customers based on details such as order history and preferred payment methods. The gathered insights enable the marketing and sales team to employ more effective strategies to attract and retain customers.
The integration of AI and ERP is helping businesses create a frictionless system and enhance services. The potential of an AI-powered ERP system will only grow with the advent of a digital age; therefore, organizations looking to maximize impact with minimal resources should consider the applications of a digital ERP system to accelerate company growth.