Skip to content
Tiatra, LLCTiatra, LLC
Tiatra, LLC
Information Technology Solutions for Washington, DC Government Agencies
  • Home
  • About Us
  • Services
    • IT Engineering and Support
    • Software Development
    • Information Assurance and Testing
    • Project and Program Management
  • Clients & Partners
  • Careers
  • News
  • Contact
 
  • Home
  • About Us
  • Services
    • IT Engineering and Support
    • Software Development
    • Information Assurance and Testing
    • Project and Program Management
  • Clients & Partners
  • Careers
  • News
  • Contact

Four challenges with ERP vendor-led AI roadmaps and how to solve them

CIOs have a tough balance to strike: On one hand, they’re tasked with maintaining a large number of applications – research from Salesforce shows that in 2023 organizations were using 1,061 different applications – in varying stages of age, all the while maintaining interoperability and security and reducing overall spend.

On the other hand, they must look to the future state of the business with an eye toward innovation and investment in new technologies like artificial intelligence (AI). While savvy CIOs bring both business and technology acumen to the table, the most successful follow a business-driven IT roadmap, not one handed to them by their ERP vendor. Especially when it comes to AI.

AI requires a shift in mindset

Being in control of your IT roadmap is a key tenet of what Gartner calls composable ERP, an approach of “innovating around the edges” which often requires a mindset shift away from monolithic systems and instead toward assembling a mix of people, vendors, solutions, and technologies to drive business outcomes. And nothing necessitates this shift more than AI.

AI is a generation-defining paradigm shift in the way the world works and lives. The technology has made tidal waves in society, as more than 180 million ChatGPT users tap the fastest growing app for everything from writing term papers to debugging code. And, as explained in Rethinking ERP Reimplementation in the Age of AI, AI is causing significant impact on enterprises worldwide.

While vendors wield the promise of AI as a forcing function for reimplementation, customers who comply with vendor-dictated AI roadmaps likely face four significant challenges:

Challenge 1: Roadmap limitations & delays

How do SAP and Oracle stack up in terms of AI features and functions? In this nascent field, do they have the right technologists, engineers, and product developers to support continuing growth? Are they on the bleeding edge of this technology or are they simply following the pack?

While they certainly could become powerful AI players, successful organizations need flexibility and should be able to select from AI industry leaders for technologies—beyond their ERP ecosystems—that meet business needs today, adopt technology from industry AI leaders that can easily plug into multiple databases across your entire enterprise. Why limit your enterprise’s innovative potential to the speed of a big ERP vendor?

Will Henshall, a writer for Time magazine, reports that AI progress over the past 10 years has been nothing short of staggering. His article notes that over the past decade, AI’s performance has exceeded that of humans when it comes to speech recognition, image recognition, reading comprehension, language understanding, and common-sense completion.

With such rapid development underway, your enterprise must have the flexibility to choose the right AI vendor to deliver the right AI solution at the right time in order to drive the best business outcomes. And while SAP and Oracle could emerge as major AI players, there’s a lot of greenfield out there. Your organization must direct a business-driven IT roadmap to stay ahead of the curve.

Challenge 2: Leaving on-premises data behind

For AI algorithms to be successful, they need a massive amount of historical data to draw from. As Gene Marks, a contributor to Forbes wrote, “For AI to do its job it needs to use data.” Remember the “garbage in, garbage out” adage: The more clean data available to an AI algorithm, the more predictive and fine-tuned the results will be.

Henshall’s article in Time echoes the importance of data for training AI: More than half of the AI models Henshall analyzed since 2020 have training sets of 100 million or more data points. “In general, a larger number of data points means that AI systems have more information with which to build an accurate model of the relationship between the variables in the data, which improves performance,” he writes.

With the high price of cloud storage, customers reimplementing on the vendor’s SaaS cloud might not take all their on-premises historical data with them. We often see organizations migrating only a few years’ worth of data, potentially leaving 10 or more years of data behind—the very data that’s the lifeblood of AI.

There is no denying the fact that with more historical, clean data, the more accurate predictive analytics and data correlation can be. The value of the ERP in AI is the data that it contains, and that already exists today within the on-premises systems. It’s best to ingest the relevant, clean, and accurate data from ERP and other systems into a centralized external AI model for best results.

Challenge 3: ERP vendors’ AI setups only look at data in the system

Vendor-embedded AI typically can only work with ERP data. But there are many data stores across an organization that are independent of the ERP system that should be included in any enterprise AI implementation. So, leaving AI to a single monolithic ERP vendor makes little sense. The good news is that there’s a better way.

You can adopt technology from industry AI leaders today that can easily plug into multiple databases across your entire enterprise This flexibility speaks to the power of having a composable ERP, especially one with a robust data orchestration layer. Making your data accessible across your organization will not only benefit your employees but also unlock new potential for more powerful AI algorithm use inside your organization.

Challenge 4: Loss of license ownership risks cost increases & shrinkflation

In addition to leaving your customizations and data behind, reimplementing on-premises ERP functionally to the subscription cloud could mean leaving your leverage of software license perpetual entitlement behind, which can lead to out-of-control costs and shrinkflation.

According to recent financial estimates from Deloitte, many companies that have moved to cloud have incurred complex software licensing issues and costs that can reach as much as 24 percent of total information enterprise technology spend. Even after initial TCO analysis, “many organizations still encounter a cost explosion when the actual migration begins, in part because they were unaware of the licensing requirements for cloud, which can include licensing transfer, purchasing, and visibility issues,” Deloitte says.

Turns out shrinkflation—the tactic of reducing the size of a product and either keeping the price the same or increasing it—is not only taking a bite out of your candy bar, but also taking a bite out of your cloud. Research by Vertice finds that more than 24% of businesses have been hit by SaaS shrinkflation during the past 12 months, where cloud vendors are charging the same price for reduced functionality.

Examples of SaaS shrinkflation include non-cumulative pricing, reduced discounting, and feature bundling/unbundling. Vertice advises that to be in a strong negotiating position, you should start due diligence 6-8 months before renewal. But ultimately, to secure the best possible price you need leverage. And without the leverage of software license ownership, considerable cost and shrinkflation risks persist.

Ready or not, the AI revolution is here

I think Bill Gates was spot on when he stated: “The development of AI is as fundamental as the creation of the microprocessor, the personal computer, the Internet, and the mobile phone. It will change the way people work, learn, travel, get health care, and communicate with each other. Entire industries will reorient around it.”

The volume and velocity of innovative AI technologies is happening at breakneck speed—a pace that many ERP vendors will likely be unable to keep up with. That’s why it’s imperative for organizations to focus on business-driven IT roadmaps, innovating around the edges of their ERP, and solve the challenges that ERP vendor-led AI roadmaps present. Timing is of paramount importance; successful organizations must act quickly to innovate around the edges and outpace the competition.

Learn more: Discover how Rimini Street can help you reallocate resources to further innovation, gain competitive advantage, and accelerate growth.


Read More from This Article: Four challenges with ERP vendor-led AI roadmaps and how to solve them
Source: News

Category: NewsJanuary 14, 2025
Tags: art

Post navigation

PreviousPrevious post:Microsoft commits to AI integration, but delivers no particulars to differentiate from rivalsNextNext post:EU joins industry backlash against Biden’s AI Chip export restrictions

Related posts

휴먼컨설팅그룹, HR 솔루션 ‘휴넬’ 업그레이드 발표
May 9, 2025
Epicor expands AI offerings, launches new green initiative
May 9, 2025
MS도 합류··· 구글의 A2A 프로토콜, AI 에이전트 분야의 공용어 될까?
May 9, 2025
오픈AI, 아시아 4국에 데이터 레지던시 도입··· 한국 기업 데이터는 한국 서버에 저장
May 9, 2025
SAS supercharges Viya platform with AI agents, copilots, and synthetic data tools
May 8, 2025
IBM aims to set industry standard for enterprise AI with ITBench SaaS launch
May 8, 2025
Recent Posts
  • 휴먼컨설팅그룹, HR 솔루션 ‘휴넬’ 업그레이드 발표
  • Epicor expands AI offerings, launches new green initiative
  • MS도 합류··· 구글의 A2A 프로토콜, AI 에이전트 분야의 공용어 될까?
  • 오픈AI, 아시아 4국에 데이터 레지던시 도입··· 한국 기업 데이터는 한국 서버에 저장
  • SAS supercharges Viya platform with AI agents, copilots, and synthetic data tools
Recent Comments
    Archives
    • May 2025
    • April 2025
    • March 2025
    • February 2025
    • January 2025
    • December 2024
    • November 2024
    • October 2024
    • September 2024
    • August 2024
    • July 2024
    • June 2024
    • May 2024
    • April 2024
    • March 2024
    • February 2024
    • January 2024
    • December 2023
    • November 2023
    • October 2023
    • September 2023
    • August 2023
    • July 2023
    • June 2023
    • May 2023
    • April 2023
    • March 2023
    • February 2023
    • January 2023
    • December 2022
    • November 2022
    • October 2022
    • September 2022
    • August 2022
    • July 2022
    • June 2022
    • May 2022
    • April 2022
    • March 2022
    • February 2022
    • January 2022
    • December 2021
    • November 2021
    • October 2021
    • September 2021
    • August 2021
    • July 2021
    • June 2021
    • May 2021
    • April 2021
    • March 2021
    • February 2021
    • January 2021
    • December 2020
    • November 2020
    • October 2020
    • September 2020
    • August 2020
    • July 2020
    • June 2020
    • May 2020
    • April 2020
    • January 2020
    • December 2019
    • November 2019
    • October 2019
    • September 2019
    • August 2019
    • July 2019
    • June 2019
    • May 2019
    • April 2019
    • March 2019
    • February 2019
    • January 2019
    • December 2018
    • November 2018
    • October 2018
    • September 2018
    • August 2018
    • July 2018
    • June 2018
    • May 2018
    • April 2018
    • March 2018
    • February 2018
    • January 2018
    • December 2017
    • November 2017
    • October 2017
    • September 2017
    • August 2017
    • July 2017
    • June 2017
    • May 2017
    • April 2017
    • March 2017
    • February 2017
    • January 2017
    Categories
    • News
    Meta
    • Log in
    • Entries feed
    • Comments feed
    • WordPress.org
    Tiatra LLC.

    Tiatra, LLC, based in the Washington, DC metropolitan area, proudly serves federal government agencies, organizations that work with the government and other commercial businesses and organizations. Tiatra specializes in a broad range of information technology (IT) development and management services incorporating solid engineering, attention to client needs, and meeting or exceeding any security parameters required. Our small yet innovative company is structured with a full complement of the necessary technical experts, working with hands-on management, to provide a high level of service and competitive pricing for your systems and engineering requirements.

    Find us on:

    FacebookTwitterLinkedin

    Submitclear

    Tiatra, LLC
    Copyright 2016. All rights reserved.