AI Transforming ERP Software Systems, ISG

Artificial intelligence in all its forms, including GenAI, natural language processing, agents and agentic devices, will revolutionize enterprise resource planning (ERP) systems and the ways individuals and enterprises work with the software by 2027, a new research report from leading global technology research and advisory firm Information Services Group (ISG) says.

Robert Kugel, Executive Director, Business Research, ISG Software Research.

The ISG Buyers Guides for Enterprise Resource Planning, produced by ISG Software Research, say current technology trends will revolutionize ERP systems by making complex processes faster and easier to execute and condensing highly repetitive accounting and other tasks through automation. Almost all providers of ERP software will incorporate AI by 2027 to reduce workloads and speed processes and reduce errors, the reports say.

“ERP systems, which have served as the central nervous system of enterprises for decades, are in the midst of a technology revolution,” said Robert Kugel, executive director, Business Research, ISG Software Research. “AI-powered change is already underway in the form of anomaly detection to flag potential errors and technology that makes processes faster and easier to execute. The use of AI in ERP platforms will boost productivity and enable enterprises to attract and retain the best talent.”

Modern ERP systems offer enhanced functional depth, usability, adaptability and manageability, largely because their cloud-based environments make them easier to maintain. The shift from on-premises to cloud-based ERP continues to accelerate, driven by improved configurability and customization options for specific industries, the reports say.

By 2027, more than 80 percent of ERP systems purchased by non-product companies will be deployed in the cloud to promote continuity, improve performance and lower costs, ISG says. In addition, as developers refine and tailor ERP platforms to a greater number of specific industries, implementation, maintenance and total costs of ownership have decreased.

While the decision to upgrade or replace a core ERP system is challenging due to associated costs and potential disruptions, ISG says CFOs should recognize that outdated systems pose risks to enterprise operations. Enterprise leaders should take a strategic approach to assessing new software and providers’ AI capabilities, rather than implementing a simple like-for-like replacement.

“Software providers increasingly are transforming their ERP systems to run on modern, cloud-based platforms that allow for continuous enhancements, including AI,” said Mark Smith, partner, ISG Software Research. “Unfortunately, current enterprise deployments have become too customized and need to be re-evaluated and re-implemented to take advantage of the benefits of AI and other new technologies. Our ISG Buyers Guides provide a roadmap for assessing and selecting ERP software providers that accelerates time to value and reduces total cost of ownership.”

To learn more, visit: www.isg.com