HomeEnterprise Resource PlanningHow AI and Machine Learning Will Transform Enterprise Resource Planning?

How AI and Machine Learning Will Transform Enterprise Resource Planning?

Think of ERP, or Enterprise Resource Planning, as the brain of your organisation’s technology apparatus. The function of the brain is to coordinate the activities of your body. It tells the body what it is supposed to do. You cannot function without one!

Similarly, an organisation cannot function without a well-planned Enterprise Resource Planning system. Starting from finance, sales, marketing to product development, inventory, cost, and order management, ERP strives to integrate diverse facets of the organisation’s business.

However, with time, everything needs to evolve.

The ERP system of today needs to change the way it handles the company’s functions and relevant data. We do not deny the fact that the ERP system hasn’t changed. They have transformed tremendously over the years. Several additions have been made to ERP applications to make them more effective, from data automation, process automation, reminders, and alerts to visualisation and data representation tools.

It is now completely available on the cloud and comes equipped with an attractive and easy-to-use interactive interface. The current era of technological revolution is further transforming the way we approach Enterprise Resource Planning. Rapid innovations have added a new layer to ERP and made notable improvements in the application.

This is where Artificial Intelligence(AI) and Machine Learning algorithms come in. These two terms have become a regular part of our vocabulary in the current era. AI possesses the ability to change the world as we know it today and has had a significant impact on almost every sector globally.

Before we dwell on the impact of AI and Machine Learning Technologies and their ability to transform Enterprise Resource Planning(ERP), let’s better understand the concept.

What is Artificial Intelligence?

As the name already suggests, Artificial Intelligence(AI) can be characterised as the intelligence possessed and exhibited by machines and their ability to perform complex jobs efficiently. Unlike the intelligence demonstrated by human beings, this is the intelligence of a computer or any other machine.

AI is capable of performing functions that would ordinarily require human intervention or decision-making. It allows machines to gain knowledge from experience, adjust and adapt to changing internal and external environments, and process large quantities of data in a matter of seconds.

From image recognition, speech systems, robotics to planning, scheduling, and processing, AI is used almost everywhere. The field of Artificial Intelligence has seen a sudden surge in the past decade, with its presence being seen everywhere. From finishing your sentences before you finish typing to processing data, automated maintenance, and making decisions, AI has integrated itself into our lives today.

So, what is Machine Learning(ML)? Is it different from AI?

Machine Learning is a subset of AI itself. It can be defined as getting machines, mostly computers, to learn from past experiences and data without being specifically programmed. Machines will be able to decide on a future course of action by analysing past data and events.

Understanding the intricacies of Artificial Intelligence(AI) and Machine Learning(ML) might seem like a complex task for a commoner. However, we can agree that these concepts and terminologies will dominate the coming day and age. AI has spread its wings and transformed the way we look and approach a particular problem.

The number of organisations and businesses that have introduced AI in their operations in some form or the other has increased by 270% in the last four years. When asked, almost three-quarters of the executives stated that they considered AI a crucial part of their business. The prevalence of AI has not gone unnoticed.

Now, let’s get back to ERP.

Has AI and ML ventured into ERP?

The answer, of course, is yes!


The ERP of today is far more advanced and evolved as compared to a few years back. Both AI and ML were transforming the way business operations and planned, executed, and managed.

They are taking over and carrying out functions that would have required human intervention in the past. AI-driven decision making has allowed b2b businesses to anticipate and prepare for obstacles and failure, identify gaps, and tap opportunities that would not have seemed feasible otherwise.

It has changed the way organisations collect and utilise data and has substantially improved the effectiveness of the entire process. The primary purpose of any ERP software is to manage and operate the basic and key processes involved in any enterprise.

This includes planning, budgeting, organising, forecasting, and so on. ERP databases store and manage all the data and process workflows associated with each function. The database, in turn, is handled by a team of experts.

From manual data entry to data automation to real-time updates, the interface of ERP has become more and more effective over the years. Artificial Intelligence and Machine Learning can take it a step further in the right direction.

Not only can they take over the responsibility of mundane and repetitive tasks, but they can also make intelligent decisions for enterprises based on the given facts and future scenario.

Let’s look at the different ways Artificial Intelligence and Machine Learning are transforming Enterprise Resource Planning.

Sales Automation and Enhanced Customer Satisfaction

One of the best ways to keep loyal customers for any brand is to ensure that their customers are satisfied. Customer experience satisfaction is regarded as one of the most important objectives of any organisation.

With AI, businesses can improve the level of satisfaction and the quality of the customer’s experience.

Chatbots powered by Artificial Intelligence has completely transformed customer communication. They do not face time constraints (unlike humans!). They are available day and night to answer customer service queries, address their concerns & perform maintenance jobs.

Remember the time when you had to visit a travel agency to book tickets for a trip? You can now plan an entire world tour from the comfort of your room. This is possible because of AI. 

From the point of view of businesses, AI in ERP has made employee job much more manageable. It has improved time management and allowed for efficient scheduling of appointments and meetings depending on customer needs and requirements.

In addition to the above, Artificial Intelligence also facilitates the process of sales processes automation. It takes over and performs the daily required and defined tasks, allowing the sales managers and representatives to focus on essential tasks and the customer’s needs.

You ever wondered how Amazon comes to know that you have run out of ink on your HP Printer? This is the magic of AI Solutions.

Seamless Inter-Departmental Communication

Each department of an enterprise has to be in complete sync with other departments for the entire operation to run smoothly and minimise the number of hurdles. An ERP powered by Artificial Intelligence will promote the seamless exchange of data between relevant departments.

Consider the fundamental need to match supply and customer demand with various key technology strategies. It is highly essential to ensure that you have the required stock to fulfil each client order currently placed and those that will be placed shortly. This is where AI comes in. 

Using AI, your organisation’s ERP application will analyse and calculate the type and amount of material that needs to be purchased based on current and future orders. That’s convenient, isn’t it?

Based on the data collected over the past years, AI, coupled with ML, will project when your business will reach the peak level in the current year and what you will need to prepare for the same.

Bid farewell to the days when you had to schedule dozens of interdepartmental meetings to ensure that everything was on the right track and everyone was on the same page. AI also reduces the chances of error in such situations and arrives at a decision faster than humans.

Advanced Analytics

The current world is data-driven, with human analyst all around. The data possessed by a company is its key wealth. If utilised correctly, this data can work wonders. AI possesses the ability to work with a vast amount of data at the same time.

The data can be concerning the buying patterns of customers, changes in product demand, seasonal effects, price sensitivity information, and so on. Artificial Intelligence will analyse and process this data in real-time to help you make the right decision.

For instance, it can analyse customers’ buying pattern and behaviour across different categories to allow you to create a product or service that is specifically tailored to their needs.

AI-powered ERP will use past and current data to predict the future rise or fall in customer demand, help you set the optimum price for your product, determine the correct and most effective marketing strategy, and prevent any last-minute rush in work.

Take another instance. Artificial Intelligence, coupled with advanced analytics, can record the time spent by a customer browsing through a particular product on your website. It will then send customised emails to the customer via your CRM system to incentivise them to make a purchase.

Increasing Productivity & Efficiency

Merely carrying out a task is not enough. To add value to the organisation, each task must be carefully planned, and optimum time and resources should be utilised to make it effective.

The details of every single process are already there in the ERP system. Empowered by Artificial Intelligence, this ERP software application will analyse and audit each method to identify the gaps and inefficient parts.

The process can be anything, starting from consumer products development, manufacturing approach, sales to inventory management, billing, shipping, etc. AI will be able to gauge which stage or which activity is performing poorly and why.

It will understand and find out the activity causing maximum wastage of materials, goods, and time and help you devise a plan to fix the same. AI can also evaluate which stage provides the ultimate value addition to the business and find ways to capitalise.

You cannot fix a problem you are not aware of. This is where AI comes in. It will tell you where you are falling behind and how you can fix the issue before it worsens, leading to an increase in business efficiency.

ERP on the Cloud

Everyone stores everything on the cloud in the present time. From personal photos to databases for entire organisations, we turn to the cloud to safeguard our data.

So, why not set up your ERP package on the cloud?

This is especially useful if you run a small business or a start-up with a limited budget. Hosting the AI-powered ERP on the cloud will help save IT infrastructure costs and maintenance charges.

You can also utilise the rapidly developing IoT (Internet of Things) technologies for your business. Cloud ERP, coupled with AI and ML, will revolutionise your approach to the company.

Minimising Errors and Preventing Fraud

From everything you have read about ERP, it is clear that your business will come to a complete standstill if your ERP stops working and functioning correctly.

What would you traditionally do in the event of a breakdown? Call your IT specialist, right?

Well, you might not have to do that as often anymore.

With the help of advanced Machine Learning, you will identify and even predict potential problems based on past experiences. This will allow you to devise a strategy in advance and ensure continuous uptime for ERP.

You can also identify and prevent fraud using Machine Learning. Based on the data collected, your AI-enabled ERP will be able to point out fraudulent customer orders and allow you enough time to take appropriate action. This will help save a significant amount of company resources, finances, time, and energy which can, in turn, be better utilised for productive purposes.

The ability of Artificial Intelligence and Machine Learning to spot frauds is far greater than that of a human being in most cases.


Although mentioned in certain places above, it is essential to highly the AI and ML ability concerning forecasting. An ERP powered by these two high tech will possess the advanced ability to forecast.

It will navigate the vast quantities of data collected, analyse the trends exhibited by it, and make predictions about future scenarios. You will be able to anticipate and recognise a problem even before it occurs, thus enhancing your capability to deal with it. 

Financial Management

Whether debt or equity, a company’s finances can make or break its future. They have to be carefully allotted to ensure optimal utilisation.

It is also equally essential to ensure that each penny is accounted for at the end of a particular period.

AI is even capable of handling this issue. With the assistance of AI-enabled ERP, you will now automate systematic processes of verifying reports and accounts for any form of discrepancy and easily tally the balances across different independent systems.

You will manage different invoices across multiple categories and reduce the level of paperwork involved in the process. Using AI, you can evaluate how your finances are being allotted across other functions organisations and whether they produce proportional results for your company.

AI in ERP also contributes towards wage management, distribution of compensation, and other finance-intensive processes.

Human Resource Management

Your business cannot function without your employees. They form the foundation of your entire structure and drive your business. Hence, management of human resources requires keen attention to detail and careful planning.

Artificial Intelligence and Machine Learning, along with your ERP, will help you analyse, evaluate, predict, and take the correct HR decisions. Whether it is the recruitment, onboarding, training, or performance analysis process, AI can be used everywhere to improve the quality of the work done.

AI can scan through the skills, educational qualifications, and applicants’ experiences to understand which candidates qualify for further evaluation. This helps speed up the recruitment process and allows you to focus on the deserving candidates instead of going through many applications.

AI is also helpful in the performance evaluation and appraisal process and helps decide which employees have exceeded expectations and deserve a raise. It enables the HR department to make objective decisions devoid of any form of bias.

The use of Artificial Intelligence also extends to learning and development. AI helps companies design customised training modules according to the requirements of each employee. It will also evaluate the training program’s impact in terms of skill improvement and quantify its implications.

Warehouse Planning and Management

You cannot set up, organise, and stock your warehouse based on your intuition. It is a science that requires careful and meticulous planning and management.

Algorithms set up and run using Artificial Intelligence will extract data sets from the orders placed, manufacturing done, and products distributed to arrive at an optimum warehouse utilisation.

You will be able to run hundreds of scenarios through AI-powered Technology and foresee the outcome in each case to plan your warehouse management accordingly. ERP, coupled with AI, will help optimise the warehouse’s logistics and reduce the possibility of errors.

It will also allow you to free up money that had been previously marked for inventory control and utilise it for more productive purposes. The goal of the future is fully automated warehousing.

Marketing Solutions

From buying behaviour, age, gender to other forms of demographic data, AI can analyse and derive useful information from everything. This information is what is needed to plan and frame a marketing strategy for your product.

While AI and ML will help you pursue the perfect marketing strategy, it also serves organizations to uncover untapped markets and customer segments that have not been catered to until the present date.

You can identify overlooked areas and improve the visibility and revenue of the business in the same. AI will enable your sales and marketing team members to create custom messages and experiences specifically tailored to the customer’s likes and dislikes.

Peace of Mind

Running a business is not an easy task. Whether it is a small start-up venture or a multinational corporation, the effort required is massive and continuous. You will be responsible for multiple facets of the organisation and business. A failure of anyone can bring the entire industry to a halt.

Your Enterprise Resource Planning has to be careful, detailed, and well-planned. Your data analysis process has to be accurate and completely devoid of errors to ensure efficient decision making.

Trusting employees and the reports aggregated by them may not bring you peace of mind. This is where Artificial Intelligence comes in. You can rest assured that each task undertaken by your ERP, powered by AI and ML, will be accurate and according to your specific requirements.

The capable hands of AI will handle everything, and you can now focus on the core sections of your business and add value to the same. This list of areas where Artificial Intelligence and Machine Learning will transform our approach to ERP can go on and on.

There is no limit to what AI can achieve if utilised productively and adequately along with ERP. AI-Enabled ERP Solutions will carry out entire processes and make sound recommendations without human interference at any stage.

The business process model will be executed and decision-taking much faster than before and with far greater accuracy. The possibility of making errors will reduce and the efficiency of the process will improve significantly.

ERP systems will take over repetitive responsibilities and free your time for more productive work that requires a human touch. It will collate data from multiple sources and convert it into useful information that will allow you to make the right decisions.

Using AI-powered Enterprise Resource Planning, you will be able to deliver consistent, cost-effective, and high-quality service & maintenance to your customers and change the way they interact with companies during a purchase.

AI and Machine Learning are rapidly progressing and evolving by the minute.

The day when these technologies changes and power almost all ERP systems is not far away. Business & Services worldwide have already started adopting AI-powered ERP Solutions to remain competitive in the long run.

PwC’s Global CEO Survey revealed a statistic that is in line with this trend. According to the report, 85% of the surveyed CEOs thought that AI-powered ERPs would substantially impact enterprises and their operating model in the coming five years.

Are there any implementation challenges?

Any innovation or venture, no matter how useful, comes with its own set of challenges. This is also the case with Artificial Intelligence and Machine Learning in Enterprise Resource Planning.

AI is an extremely useful yet highly sophisticated tool. It has a complex technical background and requires specialised knowledge experts. As a result, even though companies worldwide want to take advantage of AI, they face several issues due to insufficient experts to manage the technology.

Hiring experienced, qualified, and skilled data scientists may be an additional financial burden that many companies cannot endure. In addition to the above issue, the infrastructure associated with AI-powered ERP is also expensive. 

The tools required for AI are often costly and need continuous and focused care to ensure prolonged use. Even though AI functions primarily without human involvement, you cannot simply plug in the system and leave it to work independently.

You require a team of dedicated and skilled experts who will monitor, maintain, and adjust the system to ensure its smooth functioning.  A key requirement for AI and Machine Learning in ERP is data.

You cannot train the ERP system unless and until you have a sufficient amount of past data. The algorithm only works when it is fed with accurate data, which can be analysed for trends.

Suppose business processes are involved in a product segment that is not very widespread. In that case, the amount of data will be limited. This, in turn, will limit the capabilities of the AI-powered ERP Technology.

ERP, coupled with AI and Machine Learning, is entrusted with making critical decisions for the business. Hence, you must invest in a trusted application only. A faulty AI Solutions will result in severe ramifications for your enterprise.


Regardless of the challenges, AI-powered ERP is the future. It has already begun to change the way businesses are carried out and operations are planned. Organisations everywhere in the world are preparing themselves to adapt and make the best use of this technology to further their business interests and enhance the customer service experience.

ERP systems were already efficient. However, AI has taken it to a whole new level of efficiency and automation. Working with large quantities of data can reduce the need for human intervention and improve decision-making quality.

Mark Farrar
Mark Farrar
Mark Farrar is the Senior Manager of Technicali's Content Strategy Team with 12 years of experience. Previously, he helped entrepreneurs build and grow software. And, now puts great effort into understanding work cultures and saas' trends to drop ninja value to his readers. He does that all with his turtle "Drago" besides all the time and likes watching ninja movies with him.


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