AI in almost all forms has become a part of every ERP vendor's technology playbook, but while there's interest from customers, many want to see results before investing in the latest AI baubles.
Panorama Consulting Group's annual survey of ERP professionals on software selection and implementation decisions shows that significant or moderate AI deployment in organizations has grown since 2024 from 53.4% to 72.6%.
However, customers want to understand the AI strategies of ERP vendors and how the technologies can help them automate processes or operate more efficiently, according to Chris Devault, senior manager of client services at Panorama, which is based in Denver.
"Customers want to understand what the capabilities are and what the AI vision is," Devault said.
In some areas, the strategy is clear. Organizations are starting to work with ERP vendors on adopting AI in areas like financials, for example, by determining if there are common processes that can be automated, he said.
In other areas, however, questions persist, including the usage of AI in manufacturing and distribution, particularly where AI connects their systems with other systems in the supply chain.
Customers want to understand what the capabilities are and what the AI vision is.
Chris DevaultSenior manager of client services, Panorama Consulting Group
"[Customers] want to understand that there's investment there, there's R&D, there's planning for and a path to integrate AI into the ERP," Devault said. "But there's an understanding that it's still in the very [early stages] for use and leverage within ERP right now."
The AI involvement with ERP is not just around new capabilities for improving customer processes, he said. AI is also playing a role for some ERP vendors in the customers' software selection process.
"The large vendors are using AI in the digital discovery to help identify where these systems can be configured, what switches need to be turned on, what dependencies you need for purchase orders, for example," Devault said. "Then those tools can be used to look at some of the setups and configurations."
On the whole, however, customers want to understand AI capabilities in ERP, but they're not necessarily making it a major component in the selection process, he said.
ERP customers look for AI value
The current wave of new AI technologies in ERP systems is fueling customers' questions to ERP vendors about their AI strategy and capabilities, according to Shawn Windle, founder and managing principal at ERP Advisors Group, an independent ERP consultancy in Lakewood, Colo.
"Maybe they're doing it because they're reading articles about [Google's] Gemini and [Meta's] Llama AI, but customers are starting to demand answers to those [AI] questions," Windle said.
Windle cited a multibillion-dollar oil field services company that runs an older version of SAP ERP. The company won't implement AI capabilities unless the ERP vendor can demonstrate how AI will help its field people with tasks such as daily ticketing or invoicing processes.
"They have people in all their offices who are doing manual checking to see if they did the invoicing correctly per the contract," he said. "Sales is being impacted because their invoicing is wrong, even though there are five people looking over an invoice before it gets sent, so this [process] should be automated."
The increase of AI capabilities that are embedded in ERP systems is particularly advantageous for SMBs, as this has made costs of implementing AI-enabled capabilities like robotic process automation more feasible, Windle said.
"RPA or machine learning was almost seen like it was only for really big companies that could afford something like UiPath," he said. "But now these organizations are expecting it in their new ERP, and they're going to be willing to upgrade on them."
Although running processes with agentic AI is "pretty far off" for most organizations -- particularly SMBs -- they are buying into the AI strategies of ERP and other enterprise application providers, according to Windle.
"For the long-term benefits of the AI, the education of the market is there, and customers are saying they've got to do something about this or their competitive advantage is going to be impacted," he said.
Larger enterprises that are still running major ERP vendors' systems on-premises are beginning to see the prospects of AI-driven process improvements as a motivation to migrate to cloud ERP systems, Windle added.
"All of the major vendors have legacy customer bases that now are starting to look at AI -- if they're still on-premises -- and saying they have to do something for that," he said. "For those that didn't go to the cloud yet, we're going to see a mass exodus off of legacy platforms and onto cloud-based, next-generation architecture systems."
Efficiency gains will drive ERP AI adoption
Adoption of AI capabilities in ERP applications is still in the early stages, but will take off as customers gain benefits such as increased efficiency, according to Claus Jepsen, chief product and technology officer at Unit4, an ERP vendor based in Dordrecht, Netherlands.
Unit4 offers ERP applications primarily aimed at small to medium-sized professional services organizations. The company's SaaS Unit4 ERPx system includes AI capabilities intended to reduce manual efforts for processes like invoicing.
The efficiency gains that customers will realize from automating these and other processes will drive the adoption of AI, Jepsen said.
"Maybe not massively this year, as there's still a bit of hype around it," he said. "But there are phases in this, and what we're seeing right now is the low-hanging fruit, where it's a very small data set."
The next phases will see deeper integration of machine learning and large language models into the ERP system data, where customers can then start to query and get analytic insights, Jepsen said.
Robert Rostamizadeh, CTO at cloud ERP vendor Rootstock, agreed that interest in AI is high for its customers, but they want to see results.
Rootstock's cloud ERP, which is built on the Salesforce platform, is targeted primarily for small to medium-sized manufacturing companies.
"Customers are telling us that they have a budget for AI, they know they need to do something and they're looking to us as the ERP experts to show how they should leverage AI," he said. "You hear about it everywhere, but putting a chatbot on a page is just a gimmick. That's not what our customers want."
Because Rootstock ERP is built on the Salesforce platform, it can take advantage of Salesforce's Agentforce AI development capabilities, according to Rostamizadeh. The integration of Agentforce's tooling, security and data privacy capabilities with Rootstock's ERP data begins to provide the value that customers are looking for, he said.
"We're looking at both predictive and GenAI [for things in manufacturing like] predicting lead time, foreseeing production bottlenecks, and accurately allocating materials and resources," Rostamizadeh said. "Taking it a step further, you will be able to leverage GenAI to talk to your MRP [material requirements planning] application conversationally and ask about various scenarios and models. This is the future of ERP and AI."
Jim O'Donnell is a news director for Informa TechTarget who covers ERP and other enterprise applications.
