How AI is Enhancing ERP for Businesses of all Sizes
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Published on September 5th, 2018 | by Emergent Enterprise

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How AI is Enhancing ERP for Businesses of all Sizes

SAP Cloud ERP’s chief marketing officer Ivo Totev chats with TechRepublic’s Tonya Hall on how AI-powered ERP is accessible to businesses and can automate up to 50% of business processes where it is applied. The following is an edited transcript of the interview.

Source: Tonya Hall, techrepublic.com

Tonya Hall: With the addition of machine learning and artificial intelligence, this isn’t your father’s ERP. Welcome Ivo.

Ivo Totev: Hey, Tonya. Pleasure to be speaking to you.

Hall: So most people recognize SAP as a leading provider of enterprise application software. Explain SAP Cloud ERP.

otev: It’s my pleasure. So, SAP is the clear No. 1 in the ERP market. SAP invented ERP some 40 years back. It’s a very exciting time because we are now entering the new year, a new generation of ERP where the solutions are provided to the cloud, where the solutions become more and more intelligent. Artificial intelligence is a key topic, which I would love to talk with you about today.

Hall: What role does machine learning and artificial intelligence play in the digital transformation of ERP?

Totev: So when you look at the traditional ERP, customers had to put a lot of data into forms and that data gets taught in traditional relational databases. Looking backwards or looking at data, which was two-weeks, four-weeks, two-years old, customers would try to get some reports, some analytics to understand where business is going. As you can imagine, this is a very cumbersome process.

It requires a lot of resources. What we see today, so it’s a new generation of ERP has artificial intelligence and machine learning particularly embedded. So, many of the manual processes simply get eliminated because machines are very good at doing certain tasks, where we used human labor before. With SAP, we believe humans should do more high-value tasks. They should take care of our customers. They should be engaged in creative processes, but everything — when it’s repetitive — really should be done by machines, because machines are much, much better at many of those tasks.

Hall: You recently released a survey about artificial intelligence. What did you learn?

Totev: So what we did is we reached out to more of a 2500 executives throughout the world. So US, UK, France, Germany, Australia, just to name a few countries, statistically versus a solid number. It was interesting to learn that 90% of executives are already actively looking at artificial intelligence, and what that can do to the business.

Sixty-percent of the 2500 already considering, and, having plans on how to introduce artificial intelligence and machine-learning into our business. Thirty-percent of 2500 have plans to invest somewhere between half-a-million and five-million dollars within the next 12 months.

So I must say this is very encouraging, and this is eye-opening to see that AI has to reach already a maturity where we’re not just talking about it, but where are companies are taking money, investing into it to make it work.

Hall: Enterprise resource planning is a generic term. What functions are included in that?

Totev: Customers who look for enterprise resource planning are looking for financial solutions to really know about the finance situation of a company, profit, loss, where to invest and so on, so forth, free cash flow. Customers are looking to manage the talent. Human resources, people engagement solutions are very high on the list. And then, last, but not least, engaging with customers. This all falls into the realm of enterprise resource planning.

Hall: How do your customers benefit with cloud ERP as it relates to machine learning and AI? I mean, what are some of the use cases?

Totev: Well, here are the very important points: Many are top-notch companies and organizations which started with artificial intelligence projects some years ago. Utilizing artificial intelligence was reserved for the top-notch who could afford the data scientists, the very smart people who could help them with the algorithms and bring it back to the business.

Now for us, it is important we democratize the usage of artificial intelligence. So, we free our customers to build their own infrastructure, their own technology stack, around use-cases by applying artificial intelligence into the core solutions, which thousands of customers use around the world.

So our secret sauce is that we take a deficient intelligence and we bake it into our solutions. Sometimes the customers don’t know they’re using artificial intelligence. It’s just there. It simply automates certain tasks. And so instead of towards the end of financial period, let’s say months end, instead of having to match invoices to payments manually, the system automatically does that and it’s done. This is the exciting part.

So, we’re really bringing AI to the masses. Sometimes customers will enjoy the benefits of AI without even knowing they’re using it. They probably would know if they compare to other older systems or previous versions of our software. They would notice how much easier things flow and how much less steps are involved to get the job done, but that’s about it.

Hall: How do you expect artificial intelligence will change your business over the next few years?

Totev: Well, when I look at our business, we invest a huge amount of funds and developing resources into artificial intelligence. At Sapphire, our annual user conference, which took place last year … sorry, last week, in Orlando, Florida, we announced that we are going to have a new AI lab in Southern California.

So, so we’re making huge investments on artificial intelligence. This is just yet another office where we’re building resources to really make sure we automate 50% of all manual tasks in an ERP for artificial intelligence. That’s a huge goal, and we have promised to our customers, and we are embarking on the journey for the next few years.

This is huge investment and a huge change of the way we develop and we deliver our software. For our customers, definitely artificial intelligence will change your business in several different ways. First of all, some customers will uncover that because they are financial back-office functions, are now being vastly automated. They now can afford to repurpose and re-train employees to not working with the back office, but to really engage more with customers, so it really adds more value to the companies operations.

When you look at marketing organizations, artificial intelligence will help marketers, and I can talk to about topics, since that’s my job. Artificial intelligence will help marketers, for example, lead scoring in a much better way to really sense which prospects are more likely to buy than others, as one example. When you look at websites, websites will become so much more personalized and interactive, based on artificial intelligence.

No human can work on all the customer journeys, which are potentially out there. However, artificial intelligence will help us to learn what our customers and prospects want, and how to present that information to them. So that’s another example of a world of marketing. When we look into the financial world, we see a lot of projects going on, for example, for fraud detection, where payment streams are being monitored in real time. And for us, it’s been detected on the spot. So these are all great examples, and I could go on and on and on where artificial intelligence really helps.

Hall: What are the attributes of the business that suggests they’re actually ready for artificial intelligence powered Cloud ERP?

Totev: As I said before, probably a year ago, we wouldn’t have talked about the top-notch, most mature organizations, which have a great brand, which can attract the greatest talent of data scientists, mathematicians, to really build out the AI strategy. With bringing AI to the masses, to all our customers about building that into a product; with thousands of thousands of customers worldwide on SAP systems, they will benefit from that development. So it is not about anymore how mature is a company to use AI. AI’s coming out of the box and creates value instantly.

Hall: Ivo, I really appreciate your time in shedding some light on artificial intelligence and the world of ERP, Cloud ERP. If somebody wants to connect with you, how can they do that?

Totev: So, the best way would be for Twitter @Totev, T-O-T-E-V. Will be a pleasure to connect and continue the discussion.

Hall: Absolutely. Well, thanks again for joining us, and if you guys want to follow more of my interviews, you can. You can do that right here on Tech Republic, or maybe find me on social media by going to my website. I’m at TanyaHall.net. I’ve got links to Linkedin, Twitter, Facebook. In fact, if you want to chat or if you have questions, I’d love to hear from you. Find me on twitter at @TanyaHallRadio. Thanks for watching.

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