If you’re in any line of work that involves sitting at a desk, you’re obliged by now to be thinking about AI.

If you use software of any kind, you probably can’t help thinking about AI, because whoever supplies it is pushing AI on you. Everything is better with AI!

Does that include ERP?

Well, it would be odd if the hype didn’t get as far as ERP, but I get the impression that most ERP software companies are slightly conflicted, and there’s good reason for that. They don’t want to miss out on “new and shiny” (when have they ever?) and they don’t want to leave openings that others might capitalise on. But the fit isn’t quite a natural one.

So where does that leave you, if you’re responsible for ERP in a real company?

Should you be pushing for more AI, resisting it, ignoring it and hoping it’ll go away, or what?

How to think about AI in ERP terms

What do you have an ERP for, and why?

There are different perspectives on this, and a lot of different answers, but they usually boil down to “to keep track of everything that happens, and make the right things happen”.

What that means, is: an ERP must be rigidly predictable, or it isn’t an ERP.

In technical terms, ERPs are deterministic. Given certain inputs, the results must always be the same, and when requesting data, the results must always be the same. This is why they are often (wrongly) assumed to be Finance tools in essence, because they must be auditable, and all records consistent when they are.

As soon as you start working with modern AI, you realise … that’s exactly what it isn’t. That’s its magic, in fact, that it feels human in its whims and use of apparent judgement, even as it has inhuman speed and capability.

So introducing AI into the workings of an ERP, or thinking that AI in some form will replace ERP, is a category error. For all AI’s promise and brilliance, it takes away precisely what the ERP should be.

So AI is no use?

At this point, this sounds like an excuse from someone with interests in what ERP has always been, trying to hold back the tide. Everybody would like to think that their expertise is going to remain unaffected.

But this is more about where AI is going to successfully invade, not about whether it’ll happen.

And I think the best way to think about this is to consider AI not as part of the ERP, but as a sort of superhuman user of it.

An alien as a business butler

The dream that’s being sold is something like this, mostly:

You don’t have an ERP as you knew it any more. No screens, no dashboards, no hopping from place to place to see what’s going on, no data entry, no scanning or clocking in and out. Like a science fiction spaceship, you ask your computer what’s going on in the business, and it knows. It can explain to you, and give you whatever facts you need. It can make changes you request, and will suggest what’s needed. It knows what everybody is doing without being a drag on them, and knows so much it’s able to predict more before anybody could have known.

Which sounds great, and little by little we may get closer to that than feels likely from where we are now. I’m quite optimistic on that front.

BUT it won’t happen by replacing the boring basics of ERPs as they are now. They have to stay in place (I say confidently, but with the caveat that tech may develop, possibly, that makes all my opinions a moot point – still this is as things are). They have to stay in place, because what this vision is really about is putting something better than people between the ERP machinery and the users. Not even the alien superintelligence of the AI we’re assured is coming can conjure up knowledge from bad or inconsistent data, so the methodical structures that gather, store and connect that data are still needed.

Just as a mansion still needs a kitchen and ingredients, even though the residents have meals brought to them discreetly on demand.

Right … but what about now?

What this means is that you, as someone responsible for an ERP, can’t relax and let the machines take over. Your task, just as it ever was, is to maintain a system that’s as absolutely reliable as it can be, and AI isn’t going to help with that any time soon.

The important thing is the divide between deterministic behaviour, and judgement. Anywhere in the system where you need fixed results, AI doesn’t belong, and you should be suspicious if it’s offered. What AI can do is add layers on top of that, and threading between that fixed behaviour, that probably you previously needed humans for.

“What does this mean?”
“How should we respond?”
“Is there a pattern here?”
“Does this belong to this or that category?”

These are the kinds of things current AI is already good at, and can probably help with if embedded in an ERP.

Anything or anybody that suggests AI can make any existing part of your system obsolete should be viewed with suspicion. Ask a lot of questions, at the very least. Anything we currently know an AI can do … it needs what your system already does for that, just as much as you do.

“We’re not sure how this should work, so we’re letting AI handle it” is a very bad sign, I probably don’t need to say.

So the key is to be as rigorous as ever in the core ERP, and only allow AI features to access that core ERP in the way a user would. The ERP remains an ERP. And in an ideal world, the AI becomes that person the CEO asks for information rather than ever logging in themselves.

And this is coming

We are starting to use AI tools in ERP work.

As an enhancement to OCR for document input here.
To choose between categorisations there.
To create summaries for notifications in this case.
As a check for patterns in data in that.

Little things, mostly, conveniences and removals of drudge work, with certain key elements, such as

• Lack of clear definition what should be done in each case (otherwise an algorithm works better)
• Structured options provided for action, only free-for-all if any resulting action will be by human decision
• Clear oversight by humans, and fallback and override by responsible humans

If we can do this already, a lot more will become possible, without any doubt. So I don’t think there’s any avoiding it.

And notice I’ve barely touched on what’s needed to actually implement these things, and how to make them work reliably.

TL:DR

AI is likely to be useful in your business systems, if not now then soon.

AI is not going to replace your ERP in any respect, and if anyone is suggesting any such thing, keep your distance. Any useful application of AI needs what your ERP does.

Think of AI as a superhuman user of your ERP, not as part of it, able to do the repetitive tasks that are too ill-defined for normal computer processes, and too overwhelming or too dull for humans to be reliable for, and you’ll be best able to judge whether a proposed solution is snake oil or genuinely useful.