We have all heard the biggest buzzword in software: Artificial Intelligence. But what is AI, really? And how is it really going to impact your business? Shawn Windle, Founder & Managing Principal of ERP Advisors group, will share from his 25+ years of software industry expertise to advise financial executives on what AI really is, the practical AI financial and accounting tools available on the market, and what impacts AI will actually have on the Office of CFO over the next 5+ years.
How AI Will ACTUALLY Impact Your Organization
“AI,” or artificial intelligence, dominates headlines everywhere you look, across legacy media, social media, ERP software vendor websites, and other technology company websites. But what is AI, for real, and how is it REALLY impacting real businesses now and in the near future? This is the question many business executives are asking themselves. Savvy companies want to not only remain relevant but want to be prepared before their customers, vendors, and employees demand AI tools. This means executives must know what risks AI presents, how to mitigate them, and how to gain efficiencies or a competitive edge with emerging AI tools. But before you can understand how AI will actually impact your organization; you must understand what it fundamentally is.
ERP Advisors Group’s Definition of AI
In the context of ERP, AI has a unique meaning. ERP Advisors Group defines AI as the next generation of enterprise software that organizations and individuals will use to automate their digital tasks. For instance, as AI evolves, it can optimize digital tasks such as populating spreadsheets or analyzing accounts payable reports. Eventually, AI could take over those tasks.
AI computing and evaluation goes far beyond simple “if A then B” code lines. AI utilizes chains of complex decision trees that can mimic human intelligence and decision making.
An important piece to consider when evaluating and understanding AI is the amount of processing power needed to maintain AI platforms. AI technology requires zettabytes (1 zettabyte = 1 billion terabytes!) of data that are available in federated mega computing facilities that consume massive amounts of energy. AI is not a new concept, but we are now entering an era of rapid expansion fueled by technology billionaires and private equity group investments, providing developers with vital infrastructure.
The Gartner Hype Cycle
Gartner, a well-known technological research and consulting firm, measures the process of technology adoption and the collective understanding of it through the “Gartner Hype Cycle.” Currently, AI is at the “Peak of Inflated Expectations” stage according to Gartner. Translated, this means artificial intelligence is still in its infancy, with overblown expectations for what it is and what it can do.
AI is an evolved software platform that requires A LOT of infrastructure support which grounds the technology as we know it in reality. At the peak of inflated expectations, it is important to evaluate AI as something more concrete rather than the buzzword popularized in the media.
An immediate consequence of the hype is the inflated evaluation of AI start-up companies, globally, not just in Silicon Valley. It is more important than ever to manage your expectations of AI and don’t buy in blindly to the hype.
Types of AI Tools
When people talk about AI apps, there are three major types in the market they could be referring to. Included in those are:
- AI Platforms: Platforms leverage generative tools with Large Language Models (LLMs), image recognition, predictive tools, and machine learning. These are constantly updating toolkits used by technical resources to build out applications. An example of this can be seen in Llama by Meta, an open ecosystem that can be used to build applications.
- Best of Breed Tools: These are much narrower in scope, providing AI solutions with software built to solve one specific business problem. These can address multiple problems at once, but are typically built to provide a single solution, such as AP automation.
- Large Scale Integration: Large-scale enterprise vendors are embedding AI platforms into their existing solutions. Whether that be ERP, HCM, CRM, or any other software solution, AI is being accepted by new vendors every single day. Big name solutions such as Workday or Oracle are putting hefty financial investments into AI, providing new tools to their users.
How to Take Advantage of AI
Understanding AI itself is only half of the battle. The other half is knowing when and how to take advantage of AI as it continues to evolve.
It is important to remember that you do not have to understand every little detail of each AI tool and how they function to use them in your business. There are plenty of technical resources who can support you through this process and resources available to expand your knowledge. AI is here, and people are more willing than ever to take risks with AI tools.
Another aspect to consider is your current ERP and its future outlook. If your ERP vendor is not addressing AI or is not developing a clear AI strategy, you will have a problem in the years to come. Many companies, nonprofits, and government agencies are on platforms that are not investing in AI. It takes some effort to move off an outdated platform. Therefore, you cannot easily get “next generation” functionality with AI automation while performing transactions in legacy, outdated ERP. Prepare a battle plan and timeline for how you want to approach upgrading to a more modern ERP platform. When considering incorporating AI technology, this should be a major part of your strategy.
If your company is already on modern software solutions, talk to your partner and/or account manager to find out what tools you could benefit from. Your software renewal may be a good chance to add new AI tools as part of your negotiation. However, find out how your ERP vendor will use your company’s data as part of calculating the benefits of a new tool. For instance, will your price lists and customer attributes enter a general “vendor mind” that learns at your company’s expense, thereby benefitting your competitors who are also using the same software product? Or is your proprietary data limited to calculations within your own software instance? These kinds of questions are the ones to consider. Your company’s success is embedded in your data and the efficiencies of new tools could be outweighed by yielding your competitive advantage to the “collective software mind”! Make sure the answers you get from the software salespeople match the contract language you are signing.
A Confident, But Cautionary Approach to AI
We cannot overlook mentioning the dangers and risks that come with adopting artificial intelligence into our everyday lives. The technology itself is not inherently the threat; what people can do with that technology is. It is important to weigh the risks and benefits before making a decision about utilizing AI.
While we do recommend taking advantage of evolving AI technology as soon as you can, you must be diligent in protecting your data. Though AI vendors are beginning to take more responsibility with protecting proprietary data, it is still important to proceed carefully. Take risks, but make sure they are calculated and protect your sensitive customer and business information!
“We’ve got to be careful here…I think people should be happy that we are a little bit scared of this.”
Conclusion
Ultimately, AI is here to stay and will only become more pervasive. Business leaders must address the demands from different stakeholders for AI tools. That demand may have different answers depending on the risks and the benefits. If you need support considering how to approach the landscape of AI, we can help! We have helped many companies and individuals through conversations regarding AI, and we are here for you too. Schedule your free consultation with us today!
