7 reasons ERP is on the rise
ERP software is often associated with managing the supply chain for distributors and manufacturing companies, and this part of the economy has been under increasing amounts of pressure. The challenge of delivering what customers expect when they expect it in the face of global events such as the Covid pandemic and the war in Ukraine has become a global challenge.
The current ERP solutions such as Dynamics 365 Business Central is up to face these steep challenges. While the name and the goal are the same as they were in the last century, the technology has improved. Throughout the years, the ERP companies such as Microsoft have been folding in the best improvements to build something that is modern, service-oriented and completely integrated with every company’s stack.
AI is now widely available
Many of the companies addressing these tools are actively using artificial intelligence algorithms to smooth the workflow and take over some of the decision-making from humans. Some are making predictions to help the supply chain managers plan. Others are using AI to detect anomalies that should be fixed. All of them are taking advantage of the power that AI brings to automate steps and help humans manage large, elaborate mechanisms.
Microsoft’s AI tools are now found folded into many of their different tools, from spellcheckers in the text editors to nodes in any ERP application. Dynamics 365 Business Central, one of their major reporting tools, can use AI algorithms to look for fraud.
Data is more integrated than ever and speak both older formats like XML and modern ones like JSON. They communicate well with APIs and databases throughout the cloud. All of this makes it easier for ERP and ERP-like solutions to gather the data needed to make sound decisions.
Often, both sides support the integration. Microsoft’s Power Automate can pull data into Dynamics 365 Business Central directly from other ERP systems such as SAP. At the same time, other ERP systems such as SAP actively works with its customers to help them move data across their gateway into SAP. This back-and-forth is common throughout the marketplace, and many pairs support data movement in both directions.
Back-office processing is more automated than ever
Many of the companies are using good AI to automate the tasks that were once dominated by paper. Good optical character recognition [OCR] and machine vision algorithms can read in paper invoices to help accounting or check a driver’s license to help a bank satisfy the Know Your Customer regulations. As these tasks become digitized, it’s easier for ERP software to create good aggregated insights into the enterprise.
Low-code and no-code work
Many modern platforms like to push their ability for flexible programming. The “no-code” and “low-code” drag-and-drop interfaces make it possible for nonprogrammers to do a good job building working flowcharts that control how data is gathered and work is accomplished. Developers can use many of the low-code features to speed up their work.
Microsoft’s Dynamics 365 platform for business management can also be customized with a variety of options, including their low code option called “Power Apps”.
Some clever companies have developed tools that turn the power of AI and machine learning to understanding just what’s going on inside the complex collection of old and new code that keeps it running. Some call these extra tools “process mining” because the term suggests how the algorithms can watch the data flowing across the network for patterns that can be used to improve everything. These tools can make it simpler to create an ERP application and also ensure that the ERP applications are closely tracking the working environment.
One of the metaphors that’s appearing more and more frequently in the world of enterprise software is the idea of a “digital twin.” It’s more of a goal or a vision than a technology, but it captures the desire for the ERP systems to accurately track everything that is happening inside the enterprise. Sometimes the digital twin technology focuses on particular products or markets and other times it’s the organization itself. Teams use the word in different ways.
In the past, many companies were happy just to have the computer systems track invoices and shipments. Now, they can use more elaborate models to watch all the steps along the manufacturing and sales process. The idea of a digital twin is still far from being perfectly realized, but it illustrates the ambition of some CIOs.
Predictions are more accurate than ever
The AIs are taking on more roles and controlling more of the decisions made along the chain. It’s not that they’re more integrated, but they’re often more trustworthy. Well-trained AIs can take on more and more of the decisions in moments where the data is often clear. At other times, the AI can act as a pre-filter or an advisor for the humans who make the final call.
Findability AI, for instance, touts the predictive ability of its artificial intelligence routines when the data and the circumstances are right.
Over the years, the software industry has created a burgeoning number of useful categories of enterprise software, from robotic process automation (RPA) to business process management (BPM) to customer data platforms (CDP). ERP is a cousin to these three acronyms and several others too. There are differences between all of them, but the goal is the same: use the power of automation to simplify the workflow for the people in the trenches. Then use good reporting and pattern matching to help the managers spot bottlenecks and backups.
Good organizations are deploying these tools to mediate the flow of information and work. This is producing more agile and efficient manufacturing and services. Customers are benefiting, whether it’s called ERP or something else.
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