AI and ERP Applications

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May 2023

Hi Paul

Welcome to The Cirrostratus Group May newsletter.

This month I have updates on two AI & SaaS related topics. First, information about the current use of AI in Enterprise Resource Planning (ERP) software most of which are SaaS applications. Second, updated information about the momentum behind regulation of AI which will have an impact on AI in SaaS business applications in the future.

Paul Ressler

The Cirrostratus Group

AI and ERP

In last month's newsletter I talked about the use of AI, particularly generative AI, in CRM applications. Since CRM is very much about communication and synthesizing communication, generative AI is very applicable. What about ERP? Many ERP vendors and consulting firms view ERP as encompassing all business processes in a company including sales, marketing, customer service, manufacturing, finance and HR. For purposes of this discussion I take a narrower view and I don't include HR and customer support. I believe that both of those application areas have somewhat different AI uses than core ERP and should be discussed seperately, hopefully in a future newsletter. The applications of AI in ERP is somewhat different than CRM and is not necessarily focused on generative AI.

Some of the key areas where AI is used in ERP applications include:

Forecasting
Demand planning
Purchasing
Predictive maintenance planning
Analytics and data mining

This article provides a good overview of the areas of ERP where AI is used and which ERP vendors are leading the way in implementing AI. There are good examples of AI use in ERP which could be applied to your own SaaS business and my advice as always is use AI because it is the best way to solve a business problem, not because it is trendy.

AI Regulation

Sam Altman, the creator of ChatGPT and the CEO of Open AI testified before congress and he was very clear that he felt there should be regulation of AI technology as described in the New York Times article. This Harvard Business Review article has a good status of all the various governmental organizations that are are currently working on regulations along with some advice to the industry for the current unregulated environment. Clearly there needs to be more clarity on who and how AI will be regulated.

A good example of why there needs to be some guidance for AI use is described in this research from the Human Centered AI Research Center at Stanford University. This research found that the generative search engine results are not nearly as trustworthy as they appear and that some of the results cannot be attributed to accurate sources and some results do not have attribution at all. Given that many of us rely on search results to make personal and business decisions this is a good example of a service that isn't ready to be relied on. Whether the guidance should come from industry or from government is unclear but probably both are needed.

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