CIO DIVE. Widespread adoption still elusive for generative AI tools in ERP

Executives are grappling with pending software updates and the technology’s relative novelty.

ERP providers tout generative AI as the go-to technology for cloud migration assistance, analytics and more. But enterprise customers have yet to adopt the added features

CIO DIVE recently reached out to 555vCTO.com founder Vaclav Vincalek to get his thoughts on the implementation of generative AI tools in ERP. 

Challenges in Adopting Generative AI for ERP Systems

ERP systems are “by default incredibly difficult to deploy within organizations,” said Vaclav Vincalek, virtual CTO and founder of 555vCTO. The process can take months or years, and generative AI apps, like ChatGPT, only broke big in late 2022. 

According to a CIO article, major players like Microsoft and SAP have been busy over the past year adding generative AI features to their flagship enterprise software. However, many customers are still using older ERP systems that just can’t support this new technology.

Experts point to the technology’s still-evolving nature as a reason for the slow adoption. 

But the real challenge is that many customers are sticking with outdated versions of ERP software that don’t support generative AI. Denis Torii, a VP analyst at Gartner, calls this a "chicken and egg dilemma," where organizations have to choose between jumping on the new tech now or waiting to see what others do first. He notes that the hesitation often comes from the critical importance of these systems.

Despite all the buzz from vendors and tech builders, the real move to adoption is waiting on those necessary software upgrades.

ERP Growth and Ongoing Modernization Challenges

“Nobody wants to touch an ERP system unless they are forced with a gun to their head,” Vincalek said. And the maturity level, in most cases, is not there yet to learn and do complicated tasks that AI in ERP would require to be successful.

According to a recent Gartner research note mentioned in a CIO article, generative AI didn’t exactly rock the ERP market in 2023. However, new and upgraded classic AI features helped vendors show off the added value customers could get from more cloud services. The biggest impact of this tech last year was how it kicked off conversations about updating applications. ERP business leaders felt the push to get to grips with this new tech.

Introducing new features into enterprise software “takes a half a year of planning and then testing and moving into production, and finding the initial customers to try to do something with it,” he said.

It’s unlikely that generative AI is completely worked through a company’s ERP system yet, Vincalek said. 

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