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Use Of Artificial Intelligence In ERP?

Use of Artificial Intelligence In ERP

Artificial Intelligence is the new phenomenon which is here to turn the world around. Recently, it has become the top priority of business organizations. This is because of the value it adds to an organization’s ERP (Enterprise Resource Planning) system.

Why is ERP Important To Business Organizations?

ERP stores all entered information into a solitary database, enabling all departments of the office to work with similar data. Also, this information can be sorted out, analyzed and made into company reports.

ERP frameworks unite the departments of client onboarding, HR, customer management, financial management, and stock and inventory chain capacities into one framework.

The system is expected to be the most impactful asset of business organizations in 2019. But those who’ve never used the software may find it difficult to understand why ERP is important to their business, moreover how AI will make it more effective. Before knowing how let us know more about AI.

What is Artificial Intelligence

In technical words, Artificial intelligence (or AI) is "the study and design of intelligent agents" where an intelligent agent is a system that perceives its environment and takes actions which maximize its chances of success.

For a better understanding, let us phrase it in a layman's language, Artificial intelligence (AI) is an area of computer science that emphasizes the creation of intelligent machines that work and react like humans.

Some of the activities computers with artificial intelligence are designed for include speech recognition, learning, Planning and problem-solving.

Uses of Artificial Intelligence in ERP

All of the activities mentioned above define the activities performed in a business management environment, hence this new technology is being used along with the organization’s ERP system for better management and productivity.

There are a few major departments where AI improves the effectiveness of the ERP system, like data management, customer service and financial and human resource planning. Let us study in detail how the use of Artificial Intelligence with ERP benefits your company.

1. Data Management

As a successfully operating company, you know how important it is to evolve your ERP systems to access the important data collected. This data is very important for the growth of the company but at the same time is of no use if it is not converted into meaningful information.

AI can come up as a great help here as it memorizes a specific pattern and becomes a business tool to handle the flowing amount of data.

The AI technology will help the ERP’s like OdooERPNext or any other in organizing and presenting structured and unstructured data in a clear and user-friendly way which will lead to track business opportunities from leads in the given data, send them quotations, negotiate and seal the deal.

2. Customer Services

What is a business without its customer? Hence, it is necessary to provide the best service to your customers for building a good relationship with them. We know that the usage of the ERP system offers faster delivery of goods to customers, improves productivity, and controls inventory along with distributing important information across internal teams (including front-office and warehouse within the company.

AI, which is said to have human intelligence, contributes to other aspects of customer service which the ERP system might miss out on. It is efficient in learning customer service history, answer customers’ inquiries in a specific pattern, provides better search results and fast performance.

The system can also schedule calls and assist a customer looking for a piece of specific information in the company’s vast web data. Hence, improving the 360-degree view of the customer.

3. Automates Systematic Processes

Automated tasks can be boring for employees and can limit their productivity. Hence, using AI with the ERP system can be effective in completing routine responsibilities. We know that by applying a set of rules for a specified data set, the built-in ERP tools will automate business processes in a way that it saves time and avoid difficulties.

Using it with AI will help will make it possible to make decisions and adapt to the behavioral patterns better than any HR or Finance professional.

From payrolls to phone calls, a click of a button, and you’re done with all your responsibilities. Whether it is monthly, quarterly or annually, AI has great pattern learning ability. This specific feature makes it perform activities like coordinating training programs for the staff members and even comparing balance sheets and other statements.

4.  Detecting Past Patterns of Incidents

ERP is capable of implementing self-learning algorithms which can detect production incident reports to predict future production problems and alert the company for the same. Cloud ERP platforms, together with AI will be helpful to save capital investment by detecting such failure of potential projects in line.

Due to this feature, the ERP system is widely used by aircraft manufacturers. Machine learning is programmed with predictive modeling to compare past incident reports which lead to better production, design, and manufacturing. Just imagine how much lose the company would have to incur in case an aircraft production fails? The same concept applies to other production companies.

5. Forecasting Demand

Sudden rise or fall in demand can be challenging for the organization. Here, ERP comes as a savior by offering demand forecasting accuracy and enabling better collaboration with suppliers of the raw material.

AI and machine learning contribute to the system with its ability to attain high-quality data for the organization by analyzing the reports and raw data. Hence, resulting in the prediction of the demand.

The Cloud ERP providers can improve data latency rates along with AI that will lead to higher forecast accuracy. This will help in designing the precise plan of action for all departments i.e. production, sales, and marketing.

6. Saving Cost

The AI software is capable of passing instructions to the machines of production. With the advancement in technology, machines are the new human resource but as we all know without human supervision or intelligence even they can fail.

The ERP system can record the set of instructions such as cutting size of the cloth, material required in each product, etc. But the role to pass on the instructions is where AI comes in the picture.

Till date the ERP could only record the instruction, together with AI, it will also be applied to apply it resulting in better utilization of resources and higher quality of production.

7. Improving Inefficiency

AI and machine learning are technologically advanced in identifying inefficient production processes. The system will help to improve the manufacturing process of the organization with the integration of an ERP system.

Since, AI is capable of identifying any such process or pattern which is inefficient, technologically, mechanically or due to its effect on consumer behavior, it will alert the manufacturers. This will help to save resources and increase productivity.

The hazards of following an inefficient plan can lead to product damage, delay in production, customer dissatisfaction, and the waste of raw material. The system will add great value to ERP by coming up with a productive plan which will improve the manufacturing and sales of the organization.

Now, How Will This Work?

If the company's technology resources are being used optimally, AI will use the intelligent software applications to make the internal system more effective and create a better technology infrastructure which works in a smarter way, therefore, optimizing the process of the business of each company.

For this, the company would require ERPNext customization or Odoo customization to install the new technology and this will require you to reach out to an ERP solutions provider

One such Indian company providing services like ERPNext hosting, customization, installation, and other general ERP solutions is Kanak InfoSystems LLP. To know more about ERP solutions and Odoo development, you can visit www.kanakinfosystems.com. 

Point to Remember: Make sure that your company is prepared to alter the current IT strategies before the installation of new technology for your company.


Using Artificial Intelligence with ERP is definitely the future. Gartner predicts that by 2020, almost every advanced software in the market will rely on AI technology in some sort or the other. Also, by 2021, about 80 percent of all new technologies will depend on AI as the centerpiece of its infrastructural design. So it will be fair to say that ERP systems are going to see a lot of use of AI technologies for consistent performance of the system and organized management of the company.

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