“It is clear that no matter where we go, we cannot avoid the impact of Artificial Intelligence (AI).” These are the words from a top analyst at Gartner as he emphasized how quickly AI is evolving and how important it is for people to embrace AI before we can no longer keep up with it.
High performing businesses are well on their way to harnessing the power of AI, particularly when it comes to automating and optimizing their processes. According to Gartner, these businesses use AI to better capture and manage huge amounts of data they might not otherwise have mined, resulting in better decision-making that unlocks new sources of value.
One key area where AI is making a difference is in enterprise resource planning (ERP) systems used to manage everything from inventory to finances. Those taking advantage of the latest cloud-based solutions like Microsoft Dynamics 365 are already accessing AI features to work more productively and make better predictions about things like future sales and stock requirements.
This new generation of AI-driven ERP is being called the Autonomous ERP, and it represents an exciting new chapter in operational efficiency and innovation for retailers. In this article, we explain exactly what Autonomous ERP is and how it could benefit your retail business.
What is an autonomous ERP system?
An Autonomous ERP system is the next step on from the ERP systems we have today, which help to automate and optimize processes like finance reporting, sales forecasting, and inventory management. Bringing AI and machine learning capabilities into these systems adds a new layer of intelligence. It means that they can analyze large amounts of data and suggest potential actions or strategies that benefit your business. They can even take on certain tasks autonomously (without human intervention).
This smart AI-powered ERP system is designed to learn and adapt over time, anticipating needs and coming up with ideas and solutions that lead to the best possible outcomes. Think of it as a virtual operations manager that’s constantly finding ways to improve efficiency and decision-making.
How AI powers autonomous ERP
AI, particularly generative AI and machine learning, is at the center of an Autonomous ERP system and is increasingly being integrated into the major cloud-based ERP solutions available today. These capabilities promise to completely change the way that retailers handle their core business operations.
Take the holiday season as an example. Relying on manual updates and set rules, a traditional ERP system might not pick up on sudden shifts in consumer demand such as a trending beauty product on social media. An Autonomous ERP system powered by AI, on the other hand, can sift through vast amounts of structured and unstructured data, from sales records to purchasing trends, uncovering hidden patterns and sharing insights. It might suggest a retailer stocks up on a certain product range or changes their marketing strategy to drive more sales.
Through machine learning, retailers can then continue to refine their business strategies based on historical performance and live data. They can then, for example, detect a supply chain disruption before it happens and make sure their local stores are stocked with the items their customers want.
At the same time, AI’s automation capabilities can speed up time spent on tedious manual tasks, such as communicating with suppliers or scanning emails. These capabilities don’t just save time; they empower retailers – and their staff – to focus on serving their customers’ needs in the best way possible.
How autonomous ERP supports retailers
Retailers stand to gain a whole host of advantages by adopting an Autonomous ERP system. Here some of the key benefits you can expect to achieve by harnessing the AI capabilities already available to you today:
- Proactive problem solving. Real-time data insights empower managers to “see” and address challenges before they escalate. An Autonomous ERP system can help a fashion retailer detect an upcoming spike in demand for a certain accessory and automatically increase the order with a supplier and reallocate inventory from underperforming locations.
- Personalized customer experiences. AI-driven personalization allows you to tailor shopping journeys to individual needs, both online and in store. With an Autonomous ERP system, you can analyze all manner of data, such as customer demographics, purchase patterns, loyalty activity, and more, to recommend the perfect products at the right times.
- Adapt to market changes. Whether it’s an unexpected supply chain disruption or a change in economic conditions, Autonomous ERP systems can help you see the bigger picture and quickly take actions to protect your business operations. AI insights help you dynamically adjust inventory levels, better understand target customers, forecast revenue, and stay agile in the market.
The future of autonomous ERP
Research suggests that within the next couple of years, more than half of businesses plan to incorporate AI capabilities within their ERP systems. Those already doing so have experienced over a 30% increase in user satisfaction and a 25% productivity boost.
In time, particularly as Autonomous ERP systems become even more advanced, retailers will have unparalleled visibility and control of their operations. These systems will lead to a vast, interconnected network of smart devices, sensors, and data streams backed by advanced AI algorithms, making hyper-targeted customer experiences, seamlessly connected business processes, full supply chain transparency, and highly efficient and sustainable logistics all part of the future of retail.
Want to find out more about how ERP systems are evolving and what that means for your retail business? Contact our experts to find out more.
