What makes AI so interesting in combination with ERP, especially compared to other technologies, is how many applications it has. It impacts nearly every industry and every job function – from the shop floor all the way up to the CEO.

The ERP software industry is undergoing a significant transformation due to the influence of AI. But what specific impacts does AI have on ERP software and what do we need to know about it?

Outside of maybe Sales, the department in a company that’s probably most in need of AI in their ERP system is finance. Here’s the summary of an article from ERP Advisors Group:

“Most busy, productive finance and accounting professionals wish they and their staff had more time in the day to do the value-add tasks that require time and space to analyze their financial data and make recommendations to better the business. However, many find themselves mired down in manual processes including spreadsheet manipulation, repetitively clicking through multiple systems, and performing time-consuming data entry to complete basic tasks.”

A great example is an application of Robotic Process Automation (RPA), a form of AI, in interpreting purchase invoice information from scanners, matching to purchase orders, and automating approval. Crazy!

The potential risks are the reason why guys like James Cameron and Elon Musk are understandably freaked out about the rapid progress of AI.

For instance, what will prevent ERP vendors that have data on the cloud from sharing comparative data with other customers, endangering competitive advantage? Obtaining data from company ERP systems in the cloud increases the risk for fraud, data piracy, and stealing proprietary secrets.

Conceivably AI in ERP could also make decisions on its own, such as reviewing customer accounts receivable data like aging history and credit checks to determine what’s a “good” or “bad” customer; and then going ahead and blocking them if they’re “bad”.

In other words, humans could be delegating authority to AI to make decisions on behalf of the company without human oversight or intervention.

Skynet, anyone?

To me, although there is almost unlimited potential for good in AI and ERP, there also needs to be much more discussion about the dangers. For instance, AI can access internal ERP data sources like customer data files and the internet together to pit one company against another or spy on competitive advantage.

Using the Terminator analogy, it would be as if the competitor chasing you is a late-model Terminator in a tractor- trailer who’s tapped into a satellite that’s tracking your every move in your pickup truck. Oh…and that tractor-trailer can time travel!

While I don’t think AI in ERP is going to completely replace human users anytime soon, I believe the writing is on the wall for job reductions and machines taking over certain functions.