7 Ways To Improve ERP With Artificial Intelligence And Machine Learning

Date: March 3, 2021

We collect client information, finance, sales, materials, and production data, every detail pertaining to our business is collected and recorded. In order for this data to be analysed and organised, optimal business solutions are required.

Enterprise Resource Planning (ERP) uses software to manage key business processes vis-à-vis Human Resource Management, Order to Cash, Source to Pay, Record to report, Lease management, Budgeting, Planning, and Forecasting. The data and the workflows associated with these business processes are stored in ERP databases that are maintained by an enterprise applications team.

ERP has come a long way since its first use in the 1990s. One of the most significant changes was when companies were able to introduce ERP with real-time features. Data that was entered into the system would automatically update the database and the reports that were produced to provide key business metrics.

Today, we are witnessing great changes in digital technology. Artificial Intelligence and Machine Learning are producing results that not long ago would have been impossible to imagine. Not only are companies receiving real-time analysis, but it’s also now possible to deploy autonomous solutions that work intelligently.

Let’s take a look at 7 ways we can enhance ERP with AI and Machine Learning.

1. Customer Service and Sales Automation

A common goal of most companies is improving customer satisfaction. Artificial Intelligence is now being used to enhance the customer experience. Chatbots are available 24/7 to answer customer concerns. You can now apply for credit without leaving your home, and holidays can be booked with just a few clicks. Life has become much easier thanks to AI. It is also being used to assist employees with optimal time scheduling, when customers need services or personal meetings.

AI sales automation takes the daily tasks out of the hands of humans, freeing up sales reps to focus more on the needs of the customer and again, generally making life easier. Take HP and Amazon for example. Now when your HP printer runs low on ink, a message is sent straight to Amazon to deliver you new cartridges.


2. Communication Between Departments

An ERP will receive data from each department in a company. A perfect case of AI improving ERP is when looking at supply and demand. Your database will include the materials you have in stock and the orders received from clients. It will automatically calculate what materials need to be ordered and the quantities based on your existing or forecasted orders.

Does that sound amazing? By analysing trends in the business, AI will already know if you are about to hit a peak period and based on the results from previous years, will predict what the business will need to be ready for the peak.

There will be little need for interdepartmental meetings to make sure everybody is one the same page. Staff will have access to the same information in real-time. Whilst this data is in the hands of machines rather than humans, there is much less room for error.

3. Advanced Analytics

Advanced analytics in ERP involves both data and machine learning models. Gigantic amounts of data is now being used to analyse customer-buying patterns, predict changes in the demand, optimise price, prevent churn, determine the next best action and improve marketing strategies, to name a few.

Not only is advanced analytics used to examine the past and the future, but it will also take information about the present, provide the best information to businesses for implementing optimal decisions.

Using advanced analytics lets you see how long customers spend looking at a particular product on your online store and send customised emails based on the customers likes from your ERP or an integrated Customer Relationship Management (CRM) system.

AI and machine learning have truly transformed the way an organisation manages the relationship with its people. Machine learning models can predict and pre-empt employee attrition. The same technology can also be used to identify behaviours that motivates staff.


4. Foreseeing Errors and Even Fraud

When an ERP stops functioning, a company’s production could be slowed down or even completely stopped. Traditionally, we would have to wait for an IT specialist to find the problem. Machine Learning can be utilised to identify the problem rapidly. It can also predict potential problems and therefore ensure continuous uptime of the ERP system.

Machine Learning is capable of consuming operational data from a company over a period of time and predicting customer orders that could be fraudulent. As computers are much faster at detecting anomalies, along with the reduced number of errors, this could save companies large amounts of money; particularly as the number of fraud cases are rising.


5. Improving Productivity

An ERP has details of every process within your organisation. AI will be able to look at each process and identify the processes that are not efficient. This can be at any or all parts of a process from manufacturing to billing or shipping.

Companies can learn which process is increasing energy consumption, which stage is producing the highest number of damaged goods, which stage results in the most material wastage, and what step is the most value-adding from customers perspective.

When a business can see the areas that are restricting productivity, team members are able to find solutions that can benefit all the stakeholders involved.


6. Cloud ERP

Cloud ERP is a way of running your Enterprise Resource Planning via the Internet. It’s a great way for small to medium-sized business to save on upfront IT infrastructure costs and maintenance fees.

Cloud based ERP, AI and Machine Learning solutions will further boost the adoption of ERP solutions including automated billing solutions by using image processing or voice recognition capabilities. It will also allow for additional data to be collected by utilising Internet of Things (IoT) technologies.


7. Peace of Mind

Although this doesn’t seem as significant as the previous 6 points, your peace of mind is equally important. Running a business, regardless of the size, is hard work and there are multiple things that you are responsible for. The analysis of data plays a critical role in your business. There is no longer the need for you to rely on reports aggregated from various employees and then for you to interpret each one.

While this area is left in the capable hands of AI, machine learning and your ERP, you are able to focus on the core areas of your business, ultimately adding to the improved productivity of your company.

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Gaurav Sarin


Gaurav is the Director and Principal Consultant at NeeVista. He helps enterprises leverage the power of data, digital technology, and automation.