Moderated by Niyati Chhaya, Co-Founder at Hyperbots
Niyati: Hi everyone, good morning, good afternoon, and good evening. I’m Niyati, Co-founder and AI Lead at Hyperbots Inc. Today, we have Mike Vaishnav with us, a CFO, consultant, and strategic advisor to many privately owned organizations.
Before we delve into our discussion on how AI complements ERP systems, Mike, could you introduce yourself?
Mike Vaishnav: Thank you, Niyati. I’ve worked in Silicon Valley for almost 30 years across diversified industries in various roles, including controllership, FP&A, treasury, tax, investor relations, and operational roles. In my last two CFO positions, I managed fund, IT, legal, HR, and procurement functions. I’ve covered all aspects of finance and operations in different industries.
Niyati: Wow, that’s a broad range. Today, we’ll address our topic in three broad categories: the efficacy of ERP systems, how AI and ERP work together, and the actual integration of AI into ERP systems.
Niyati: You have been part of several large and medium-sized organizations. What kind of ERPs and business processes have you worked with?
Mike Vaishnav: I’ve used both small ERPs and large ERPs like Oracle and SAP. I’ve been involved in every module for ERP, including procure-to-pay, accounting, sales, and inventory processing. I’ve implemented ERP systems globally over the past 20 years.
Niyati: What gains do you see in companies through effective ERP implementation?
Mike Vaishnav: Key gains include process automation, process improvement, audit trails, and data security. ERPs provide detailed analysis and streamline financial information, moving away from manual processes.
Niyati: What are the challenges despite effective implementations?
Mike Vaishnav: Challenges often arise during data migration and integration with old systems. Proper testing and documentation are crucial to ensure successful ERP implementation. Companies should conduct parallel test runs in a test environment for about two to three months to ensure data accuracy before going live.
Niyati: Let’s now discuss how AI and ERP systems complement each other.
Mike Vaishnav: AI is complementary to ERP. It provides add-on solutions that make data analysis more effective. While ERP systems collect and process data, AI enhances the ability to make timely and informed decisions, especially in mid-size or small ERPs that may lack advanced data analytics capabilities.
Niyati: Can you give an example, like invoice processing?
Mike Vaishnav: Sure. In large ERPs, the entire procure-to-pay process is automated. However, mid-size or small ERPs might lack such automation. AI can automate processes like opening and approving POs, providing real-time answers to specific queries, and creating customized dashboards for different departments. This enhances efficiency and privacy.
Niyati: Why is it better to use AI to complement an existing ERP rather than upgrading to a bigger ERP?
Mike Vaishnav: Upgrading to a bigger ERP is a complex and costly process. AI add-ons can enhance the existing ERP’s capabilities without the need for a complete overhaul. This approach is more efficient and less disruptive.
Niyati: Where will the budget for AI come from?
Mike Vaishnav: Companies need to work smartly, balancing their budgets. AI can help automate high-volume transactions, improving accuracy and timeliness. In the long run, AI provides better return on investment by enhancing process and operational efficiency, ultimately adding to the bottom line.
Niyati: How should a company assess the need for AI in its various use cases?
Mike Vaishnav: It’s case-by-case. AI is customizable, so companies need to evaluate their specific requirements, budget, and departmental needs. SMBs, in particular, can benefit from AI add-ons to enhance their existing ERP systems.
Niyati: Do you see ERP vendors integrating AI modules themselves?
Mike Vaishnav: Some top-tier ERP vendors are incorporating AI solutions, but mid-tier and lower-tier ERPs are slower to adopt these technologies. AI can help enhance these existing systems, especially for SMBs.
Niyati: When does it not make sense for organizations to adopt AI?
Mike Vaishnav: For companies with low transaction volumes or extremely small operations, AI may be unnecessary. In such cases, manual processing by a single person might suffice.
Niyati: To summarize, AI is a good friend to finance professionals, complementing ERP systems. While AI will not replace ERP, it enhances the capabilities of ERP systems, especially for SMBs and mid-tier ERPs.
Mike Vaishnav: Absolutely. AI adds significant value to ERP systems, making processes more efficient and helping companies make timely decisions.
Niyati: Thank you, Mike, for sharing your insights on how AI complements ERP systems.
