Dive Brief:
- Vendors are quickly adding generative AI to ERPs for customers to gain better insights, draft communications and write financial reports, but organizations will have to adapt to relish the spoils, according to Forrester research published last week.
- Enterprises can only achieve the benefits generative AI brings if they have a modern system and a solid technology base, Liz Herbert, VP and principal analyst at Forrester, said. “A lot of companies will be hampered if they haven’t gotten the basics in place.”
- Herbert recommends CIOs and tech teams explore multiple forms of AI, better grasp the technology and assess the full ERP ecosystem. The clock is ticking to carry out this analysis. “Pretty much all companies will use generative AI in ERP at least in some way,” she said.
Dive Insight:
Generative AI has the potential to enhance ERP deployments and modernization processes. Doing so effectively will require CIOs to consider how the technology fits within the tech stack, keeping costs and risks in mind, according to Herbert.
“Right now, we’re talking about all this without any clarity on how much it’s going to cost people,” Herbert told CIO Dive. “Most of the vendors have been unclear on what the pricing is.”
Microsoft offered customers preview access to its Copilot technology in Dynamics 365 in December. ERP giant SAP is also bulking up its generative AI capabilities.
ERP vendor partnerships with large language model providers could also impact costs, Herbert said. The question is to what degree.
“Something saving your employees 50% of time, but it costs $1 is very different than something that saves 50% of time and costs $100 million,” Herbert said.
Emerging use cases include organizations writing financial narratives for earnings calls, drafting communications for payment or collection emails and synthesizing information for ERP users, according to Herbert’s research. Test script creation has also become an early use case that enterprises are exploring as AI-powered coding capabilities proliferate.
But organizations trying to leverage AI in ERP without the right foundation risk losing out on the advantages. “For an ERP in particular, there’s still a lot of cloud modernization going on and that’s often the foundation for being able to do AI really well,” Herbert said.
Nearly half of leaders said they felt unprepared to use real-time data access, data visualization and predictive analytics, according to a survey conducted by Affirma Consulting of 500 business leaders last summer for Microsoft.
“It’s important that companies don’t forget all the other things they need to be focused on,” Herbert said. “If they haven’t really worked on a strong data strategy … then that’s going to set them back because it will end up being 'garbage in, garbage out.'”
