7 Ways Generative AI Can Revolutionize Your Cloud ERP System

Generative AI, or GenAI, revolutionizes conventional AI paradigms by harnessing the computational capabilities of artificial intelligence and machine learning for creative output. It plays a pivotal role in the ongoing digital transformation across industries, enabling the execution of tasks, both simple and complex, across all business departments. The management of cloud ERP systems stands as a prime domain for leveraging cutting-edge AI advancements.

Generative AI (or GenAI for short) is a revolutionary approach to traditional AI concepts. It takes the computing power of artificial intelligence and machine learning and applies it to the creation of new content.

ERP systems are central repositories of streamlined, standardized data. They are also centralized collaborative hubs of business activity. This makes them ideal places to implement the cost-effective, time-saving power of generative AI to automate repetitive tasks, streamline data analysis, guard against cyber threats, and improve overall decision-making.

In this resource, we’ll share how Generative AI is transforming ERP systems. We’ll also observe some of the trends and advancements that could dictate the next stage in ERP AI adoption and utilization.

Understanding Generative AI in Cloud ERP

Artificial intelligence has existed since 1956. However, traditional AI models have used algorithms that primarily detect and predict patterns in existing data.

The technology's importance and prominence has increased in recent years due to the development of generative AI. This is the ability for programs to use existing data to create new content and present it in a format that is both recognizable and similar to human-created alternatives.

Generative AI has significant potential in enterprise resource planning (ERP) systems, particularly cloud-based systems.

The Use of Generative AI in a Cloud ERP Context

Cloud ERPs are powerful business tools compared to their on-site predecessors. In the past, setting up an ERP required sizable up-front costs, resources, and time. Getting a computing infrastructure up and running and investing in hefty software licensing fees required significant capital, with estimates for a midsize company falling somewhere between $150,000 and $750,000 per system.

Cloud ERPs remove a significant portion of these setup costs by allowing companies to establish ERPs that live directly on the cloud. They offer off-site databases that can deliver up-to-date, relevant information to sales, HR, marketing, accounting, and any other department within an enterprise. They are ideal for remote teams, as well, since they are accessible from any location with an internet connection.

Cloud ERP systems already improve efficiency, communication, and collaboration. Generative AI has the potential to go further by enhancing the creative elements of a cloud-based ERP system. Rather than purely repurposing or repackaging existing data within the system, it can use that data to participate in the brainstorming and creation of innovative solutions. 

GenAI also has a unique ability to adapt to circumstances — something that traditional AI-focused ERP systems lack. It can even automate creative tasks and personalize the predictive nature of traditional cloud ERP solutions.

While the potential is there, many leaders and IT professionals are having trouble discovering the specific ways generative AI can enhance their cloud ERPs. How can you integrate generative AI tools into your existing cloud ERP infrastructure? In the next section, we’ll address that question by examining seven different generative AI applications in ERP environments that have the potential to dramatically improve an ERP’s capabilities and efficiencies.

7 Primary Use Cases of Generative AI in ERP Systems

Generative AI has the potential for infinite utilization. However, the key to unleashing its power is in discovering distinct, effective applications of the technology. 

For those who struggle to visualize specific and unique ways to unlock GenAI’s latent power within their ERP systems, here are seven use cases to inspire you and give you and your team some innovative momentum. You can use them as examples to analyze and consider how to apply generative AI tools within your own unique databases and workflow processes.

1. Automating Repetitive Tasks and Workflows

ERPs are often vast, complex systems with ongoing data flowing in and out of their repositories. Much of this information flow is overseen by humans executing repetitive, mundane tasks. Automating this activity is one of the best ways to use GenAI in an ERP setting.

GenAI revolutionizes automation within ERP systems by introducing a creative and adaptive approach to handling routine tasks. Unlike traditional AI, GenAI has the capability to generate new content or outputs based on patterns learned from historical data. This enables GenAI to streamline processes such as data entry, invoice processing, and report generation within ERP systems, significantly reducing manual effort and improving efficiency. Overall, GenAI's unique capabilities enhance automation within ERP systems by introducing creativity, adaptability, and intelligence into routine task execution, ultimately driving efficiency and productivity gains for businesses.

2. Improving Decision-Making With Data-Driven Insights

Generative AI’s unique power lies in its capability to take existing data and come up with new and unique conclusions. It also operates 10 million times faster than the human brain. This gives generative AI the ability to analyze vast quantities of data in a near-instantaneous fashion and then use that to formulate a unique set of conclusions. 

By continuously learning and adapting from historical data and patterns, GenAI can identify optimization opportunities, make predictions, and provide insights that contribute to more informed decision-making within organizations. 

These data-driven insights equip employees and leaders with the power to make authoritative and informed decisions. Whether it’s forecasting when to restock a product or adjusting pricing based on projected revenue streams, teams can use GenAI tools to facilitate confident decision-making.

3. Engaging in Better Business Process Optimization 

Generative AI is uniquely suited to help with business process optimization (BPO) in multiple capacities. As already addressed in the previous two sections, GenAI can streamline operational activity by automating repetitive tasks and helping curate data, and its impact on BPO goes further.

GenAI can provide more insightful analysis in the area of forecasting and predictive analytics. It can identify trends and point out potential issues. It’s creative capabilities also allow generative AI tools to personalize outputs to the specifications of their users (more on that in the next section). Generative AI allows leaders to set up effective continuous improvement initiatives within their ERPs. This makes it possible to perpetually improve how a business operates.

4. Improving User Experience and Productivity

ERPs are overwhelming. Integrating so many areas of a business into a single platform can lead to confusion and chaos. Traditional AI can help bring order through pre-set algorithms. Generative AI takes this to the next level by allowing users to personalize their experiences.

For example, if a salesperson uses an ERP to access a customer’s profile and sales history, they might have to parse through a significant amount of information to find what they need. A generative AI report could be tailored to a specific time, sales item, customer demographic, or other piece of data. It can also help analyze the results and forecast what actions should be taken in relation to them.

5. Utilizing Natural Language Processing

The ability of generative AI to use natural language processing (NLP) is a revolutionary element in AI in ERP management. In the past, only those who understood algorithms and prompts on a technical level could utilize AI within an ERP system. Everyone else had to use pre-set outcomes and parameters.

GenAI’s NLP capabilities allow a much larger user base to access ERP databases. Anyone who needs to input or utilize data can do so using understandable, language-based prompts that they can adapt to their current situation and needs. This may be obvious on the surface, but it is a new reality that leaders must teach their teams to utilize as they work on their individual activities.

6. Addressing Supply Chain Optimization

Supply chains are some of the business's most complex and unpredictable parts. The pandemic, for instance, led to high prices and limited availability across the entire global transportation and logistics industry.

Generative AI can help monitor and respond to these fluctuations and other elements of supply chain management. It can use current data to identify ongoing trends and help with demand forecasting. Dynamic pricing is also possible as supply and demand, and competitor analysis impact the retail price of goods. Even elements like optimizing supply chain routes and predicting maintenance needs become easier with the personalized and accessible elements that GenAI provides.

7. Developing Superior Fraud Detection and Security

The adaptive nature of GenAI makes it ideal for detecting anomalies in transactional data and various database patterns. It can also look for unusual behavioral activity and is even able to use NPL to help analyze potentially fraudulent messaging.

Generative AI can also help with numerous security prevention activities, such as identity verification when using an ERP system. Fraud prediction is another useful capability of GenAI that can draw on and extrapolate from data available in an ERP database.

Future Outlook and Trends

Generative AI is already having a profound impact on how companies manage their ERP systems. However, we are still in the pioneering stage of utilizing the fledgling technology. Moving forward, leaders and managers can expect GenAI’s impact on their cloud ERPs to enhance and evolve in many ways. Here are a few key areas to watch in the coming months and years.

Going Native

Current uses of generative AI tend to focus on working new tools into existing ERP systems. As GenAI becomes more common, it’s likely that we’ll see its capabilities integrated as native features in cloud ERP systems. For example, GenAI currently helps streamline certain workflows. It can simplify specific tasks, such as inputting data or generating reports. 

Moving forward, generative AI is likely to take over entire sections of ERP activity. Rich Sernyak, the U.S. SAP practice leader at the research and consulting firm PwC, points out that in the future, “Rather than simply making it easier to do things in the current workflow, entire workflows will be handled by AI on behalf of the user.” 

Emphasizing Training

Training complexity is a key challenge with any use of generative artificial intelligence. While GenAI may simplify workplace activity, it only does so with a significant degree of up-front effort and a willingness to adapt and learn. One key area of investment moving forward is likely to be educating human workers to use new GenAI-infused systems.

Rather than inputting data, end users will need to learn how to create and utilize prompts. Leaders and senior stakeholders will also need to coordinate together if they want to cultivate and deploy new AI ERP solutions in a manner that is effective and productive.

Complementing Workers

The emphasis is currently on splashy applications of GenAI in business operations, such as automating workflows and helping with dynamic pricing. As generative AI settles into its new role in helping manage ERP systems, it is likely to find more nuanced applications.

Along with replacing mundane or simple work, generative AI will begin to augment activity that was previously considered to be too sophisticated (and thus safe from the impact of the new technology). From helping managers intimately oversee warehouse floors to giving sales personnel real-time data as they work, generative AI is poised to walk hand-in-hand with human workers moving forward.

Unleashing GenAI to Unlock Your Cloud ERP’s Potential

ERP systems may have utilized traditional AI for decades, but the advent of generative AI has become a watershed moment in ERP management. IT teams can unleash the power of generative AI in their cloud ERPs through a myriad of applications. From automation to optimization, productivity to NLP, cybersecurity to decision-making, there are many ways GenAI can positively impact your ERP. 

However, these changes aren’t automatic, nor are they easy. Integrating and utilizing the generative AI solutions that fit the unique needs of each cloud ERP requires experienced, informed guidance.

Are you ready to optimize your organization’s digital transformation journey through tailored ERP integrations? Contact our team at Calance today to ensure successful integrations that align with your objectives.