Generative AI in ERP means more accurate planning across the
Enterprise Resource Planning (ERP) is about knowing today the best way to approach tomorrow. It’s about collecting accurate snapshots of various business functions at any point in time, so leaders can make clear, careful decisions that poise the organization to thrive in the future.
ERP sprang from systems designed to help manufacturers track inventory and raw material procurement. As businesses have become more complex and computing more ubiquitous, ERP platforms have grown into aggregated tech stacks or suites with vertical extensions that track data from supply chain, logistics, asset management, HR, finance, and virtually every aspect of the business. But adding all those facets—and their attendant data streams—to the picture can clutter the frame, hampering the agility of an ERP platform.
Generative AI helps restore clarity. One of the animating features of AI lies in its ability to process data that lives outside the ERP—all the data an organization can access, in fact—to output efficient, error-free information and insights. AI-enabled ERP systems increase business intelligence by aggregating comprehensive data sets, even data stored in multiple clouds, in seconds, then delivering information from them securely, wherever and whenever they may be needed.
Today we’ll examine a few of the many ways AI elevates ERP functionality.
AI tailored to modern business needs
ERPs began as ways to plan material flow to ensure smooth manufacturing runs. Today’s supply chains remain as vulnerable as ever to price fluctuations, political turmoil, or natural disasters. In many firms, buyers and procurement teams must handle fluctuations and change response in large volumes of purchase orders involving quantities and delivery dates. They frequently have to examine these orders individually and assess risk to plans and downstream processes.
Now, ERPs can use AI to quickly assess and rank high- and low-impact changes, allowing teams to rapidly take action to address risk. AI-enabled ERPs like Microsoft Dynamics 365 allow users to handle purchase order changes at scale and quickly communicate with internal and external stakeholders.
Using natural language, an AI-assistant can bring relevant information into communications apps, keeping all parties apprised of, say, unexpected interruptions in supply due to extreme climate events or local market economics—and able to collaborate to find a rapid solution.
Planners can proactively stress-test supply chains by simply prompting the AI Assistant with “what-if?” scenarios. Risk managers might ask, “If shipping traffic in the Persian Gulf is interrupted, what are our next fastest supply routes for [material] from [country]?” Empowered with AI’s ability to reason over large volumes of data, make connections, and then deliver recommendations in clear natural language, the right ERP system could help provide alternatives for planners to anticipate looming issues and downgrade risk.
Learn more about Copilot for Microsoft Dynamics 365 Supply Chain Management.
AI enables better project management
Supply chain may be where ERPs were born, but we’ve come a long way. ERPs now contribute to the run of business across the organization—and AI can make each of these more powerful.
Whether you call them project managers or not, every organization has people whose job it is to manage projects. The chief obstacles for project managers typically involve completing projects on time and on budget. An AI-enabled ERP can cut the time project managers spend compiling status reports, planning tasks, and running risk assessments.
Take Microsoft Copilot for Dynamics 365 Project Operations, for instance. With Copilot, creating new project plans—a task that used to take managers hours to research and write—now takes minutes. Managers can type in a simple description of the project, details of the timeline, budget, and staff availability. Then, Copilot generates a plan. Managers can fine-tune as necessary and launch the project. Along the way, Copilot automatically produces real-time status reports in minutes, identifies risks, and suggests mitigation plans—all of which is updated and adjusted on a continuous basis as the project progresses and new data becomes available.
Learn more about Copilot for Dynamics 365 for Project Operations.
Follow the money: AI streamlines financial processes
Timely payments, healthy cash flow, accurate credit information, successful collections—all of these functions are important for competitive vigor. All are part of a robust ERP, and all can be optimized by AI.
At the top of the organization, real-time, comprehensive snapshots of the company’s financial positions enable leadership agility. But at an ongoing, operational level, AI can improve financial assessments for every department as well. By accessing data streams from across the organization—supply chain, HR, sales, accounts payable, service—AI provides financial planners with the ability to make decisions about budgets, operations planning, cash flow forecasting, or workforce provisioning based on more accurate forecasts and outcomes.
AI can help planners collaboratively align budgets with business strategy and engage predictive analytics to sharpen forecasts. Anywhere within an ERP enhanced visibility is an advantage, AI provides it—and more visibility enables greater agility. AI can, for instance, mine processes to help optimize operations and find anomalies the human eye might fail to catch.
An AI-enabled ERP system also elevates the business by closing talent gaps across the organization.
Learn more about Microsoft Dynamics 365 ERP.
The future of smarter: Finding new workflows with generative AI
These are just a few of the ways AI eases current workflows. The untapped strength of AI in an ERP lies in companies finding new workflows enabled by AI that add value—like predictive maintenance algorithms for machines on a factory floor, or recommendation engines to find new suppliers or partners, or modules that aid in new product design enhanced by customer feedback.
The future rarely looks simpler than the past. When faced with increasing complexity, a common human adaptation is to compartmentalize, pack information into silos that we can shuffle around in our minds. In a business context, ERP platforms were conceived to integrate those silos with software, so people can manage the individual streams of information the way a conductor brings the pieces of a symphony together, each instrument at the right pitch and volume, in the right time.
Generative AI helps us to do just that, collecting all the potential inputs and presenting them in a relationship to each other. This frees planners to focus on the big picture and how it all comes together, so we can decide which elements to adjust and where it all goes next.
Learn more about Microsoft Copilot in Dynamics 365.
Using generative AI responsibly is critical to the continued acceptance of the technology and the maximizing of its potential. Microsoft has recently released its Responsible AI Transparency Report for 2024. This report details the criteria for how we build applications responsibly, decide when to release generative applications, support our customer in building responsibly, and learn, grow, and evolve our generative AI offerings.
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