Rethinking ERP Reimplementation in the Age of AI

Eric Helmer
SVP & Chief Technology Officer
3 min read
Rethinking ERP Reimplementation in the Age of AI

You want to innovate with AI, but your ERP vendor mandates a cloud reimplementation, leaving your customizations and data behind? Instead, choose a better way to maximize potential, gain flexibility, and reduce risk; here’s how.

Whether viewed from a lens of doom and gloom or hype and hope, the reality is that Artificial Intelligence (AI) is on the leading edge of revenue generation, competitive advantage, and corporate growth. All for good reason.

Gartner reports that spending on AI will grow to almost $300B by 2027, and McKinsey finds that in the past three years, the spread between leaders and laggards in digital and AI maturity has increased by 60%. And the advantage isn’t limited to high-tech: McKinsey’s research analyzes every sector that benefits from advanced digital and AI capabilities, including insurance, consumer packaged goods, energy, materials, and agriculture. The value of digital and AI capabilities is real.

Conquer the cloud-only conundrum

The AI revolution is not lost on large enterprise technology vendors such as SAP and Oracle. In fact, they’re already pressuring their on-premises customers to reimplement their ERP functionality on subscription-based clouds. And they’re promising advanced AI capabilities—but only in those clouds.

For example, SAP has promised AI and sustainability features only for ERP systems hosted in the SAP public cloud and SAP private cloud that use RISE, with SAP as the enabler. Similarly, Oracle has announced generative AI services in Oracle Cloud Infrastructure in some of their latest versions. Vendors are seemingly leveraging the impact of AI as a forcing function for their customers to undertake costly, time-consuming migrations if they want the latest AI bells and whistles—even if their current on-premises solutions are working just fine.

If vendors restrict their new AI offerings to cloud-based services only, where does that leave customers who want to retain their current, customized systems? Good news: Your organization can leverage the power of AI with your current systems, no reimplementation required. After all, the lifeblood of the AI revolution isn’t just the technology itself, but the data that’s fed into it.

Your data is the lifeblood of AI

Data is massively important for AI models, a fact that was highlighted in a recent Forbes article in which author Rohit Sehgal writes, “The quality and quantity of data it (AI) ingests are paramount to its effectiveness. In essence, data is the lifeblood that fuels AI algorithms, allowing them to learn, adapt and make decisions.” As a storehouse of data collected across your entire organization, your ERP system is invaluable, but you don’t necessarily need to heed vendor cloud reimplementation mandates to leverage AI.

As new AI technology leaders emerge, organizations can use those AI services on top of their current enterprise datasets by “innovating around the edges” of their stable core ERP—an approach that Gartner calls composable ERP, and one that allows focus on business outcomes rather than fitting unique processes into rigid, vendor-dictated technology. McKinsey senior partner Eric Lamarre echoed this idea in a recent podcast discussing the adoption of AI, where he said that when looking to implement AI technologies, organizations, “…should always start with the business problem you want to solve.”

There is another reason why a composable ERP strategy is helpful when adopting AI technologies: One of the guiding principle of composable ERP is to have a robust data orchestration layer. Because there are multiple applications and technologies interacting with your ERP system in a modular fashion, you must ensure that these systems are interoperable. This requires a defined data strategy, which provides a foundation for future technologies to dock into your overarching ERP system; this same data orchestration layer will be able to pipe in clean, relevant data to whichever AI technology you need.

Maximize potential, gain flexibility, reduce risk

In the same way that software ate the world in the early 2010s, AI is revolutionizing business in the 2020s. And because they’re the primary data store for enterprises, ERP systems will have an outsized role in this digital transformation. Successful organizations understand this, and are prioritizing their investments accordingly, leveraging the data they have today.

People, time, and money are your most precious resources. By rethinking ERP vendors’ clarion call to cloud, businesses can free up these precious resources to invest in important AI initiatives to innovate around the edges.

Learn more: Rethinking your vendor’s cloud reimplementation mandate? Discover how Rimini Street can help you reallocate resources to further innovation, gain competitive advantage, and accelerate growth.