AI transforms Microsoft Dynamics ERP: what's next?

A few months ago, Microsoft announced Copilot. This AI-based helper uses new tech developments to make boring tasks easy and help everyone at work be more creative. However, AI is more than Copilot alone. Let us have a look at what your future ERP system could look like. Does AI have the potential to take away some burdensome tasks like manual data entry or challenges related to an even earlier stage, implementing ERP? In this blog post, we will delve into how AI can potentially affect Dynamics ERP and what advantages it brings.

The first benefit lies in the fact that AI can take away a lot of repetitive tasks and administrative burdens. Previously, we relied on data capture methods like OCR (Optical Character Recognition) to scan and interpret documents. AI takes this a step further by understanding the context of the text, not just the characters. For instance, it can interpret incoming emails and suggest an order entry, reducing the administrative task to simply verifying and approving Copilot's output.

Another significant benefit of AI is its capacity to analyze large volumes of data, facilitating more informed decision-making.

Streamlining product management with AI-generated descriptions in your ERP system

An ERP system helps you efficiently manage all your products. Dynamics 365 accelerates time to market with AI-generated product descriptions, right from where you manage your inventory. You start by uploading a picture of your latest item and Business Central will:

• Suggest a matching category from your list of item categories;
• Propose a compelling product description;
• Publish your product to e-commerce platforms

Revolutionizing inventory management with AI analytics for optimized planning

Your products are online. Let us now make sure you can deliver your products once sold. Copilot will make it easier to follow up on purchase order responses. The vendor’s reply might imply a change in the purchase order. The procurement pilot in Dynamics 365 Supply Chain Management makes it easier to overview and manage purchase order changes.

Additionally, AI-driven news models identify potential disruptions in your supply chain, ensuring you catch them early and avoid costly stockouts. A manufacturer could for example be alerted about the recent Slovenian heavy floodings because one of its suppliers is based in the area. Copilot becomes your partner, generating email drafts to ask your supplier about an update. If the supplier confirms that deliveries will indeed be delayed, ERP will now propose an adapted production planning or could put forward alternative suppliers based on real-time information. In the longer term, AI could suggest optimizations for your stock automatically (without any manual interaction from the user), or the number of warehouse workers needed on a certain day.

Another example is order picking. It’s very time-consuming for an operator. AI can automatically define which goods should be stored in more accessible locations for you to save time but also when extra inventory is needed.

ERP currently already alerts you about a supplier’s delivery rate drop but AI can generate emails in advance so you can respond faster to changes. At the same time, AI can also suggest suppliers that sell comparable products that could be suitable. There is an infinite number of other external factors that can impact your production. Can we, in the long term, even expect the system to alert you to potential risks at the supplier of your supplier? Imagine AI being able to anticipate all of them.

We already briefly touched upon production planning in our article on the power of AI in manufacturing. It has enormous potential because of the large complexity of a production line. There are so many aspects that need to be considered:

• How many components and raw materials do we need to produce?
• What’s our current stock and how much still needs to be bought?
• Which people are certified to operate certain machines?
• Changeover time

Copilot can analyze this data in seconds and make a proposal. After that, it is up to the production manager to do some finetuning, decide and act upon it. Important to note is that nothing leaves the system without a human approving it. One step further is for Copilot to propose optimizations to produce more efficiently.

Optimizing corporate finances with AI-powered Cash Flow Management

Payments to suppliers are only one of the common expenses for companies. AI’s predictive insights in Dynamics 365 ERP help CFOs optimize cash flows by accurately forecasting where expenses will occur and when money will be received. Linked to this, is the capability to predict customer payments (see screenshot below). It allows you to focus on bad payers, to be proactive, and to create collection strategies. The AI prediction model does not require any development and users can improve the builder. By adjusting the data that is used in a few clicks, you can increase the accuracy of the model.

Another feature of the Finance Insights is Budget Proposals. These features create models using your data, thanks to smart machine learning templates. This means that the quality of the prediction highly depends on having sufficient qualitative data.

The fact that all insights are real-time, makes it possible for CFOs to make informed decisions without having to wait for periodic financial reports.

Below you can find an overview of all AI and process automations in D365 for Finance and Operations. The features marked by an * are planned but not available yet.

Utilizing AI for efficient quality control and predictive maintenance

What if you often have goods being returned? AI can dive into the data a lot quicker to see in which conditions this takes place. Does it only happen if a product uses the raw material of supplier A instead of supplier B for example?

The good news is that it does not always need to go wrong. AI can support you on your quality control before it leaves the manufacturing site. We have described such a case in one of our recent articles. By extension, AI can also help you prevent the breakdown of a machine with predictive maintenance.

AI is not new

As mentioned in our introductory article, AI has been there for decennia. Chances are high that you have already been using AI features without even realizing it. In warehouse management, automated guided vehicle (AGV) fleet management is such an example. Dispatching routes of forklifts for example are optimized to maximize product throughput in a manufacturing center by using AI.

Leveraging AI for seamless ERP system implementation

If your company is not using ERP yet, AI might have just made it simpler to implement it. Setting up an ERP system requires companies to inspect, extract, clean, and transform existing data before migrating it. AI could help to optimize the data migration. Once the data is in there, our D9A Kickstart solutions can help reduce the implementation time with its pre-configurations, and templates, e.g. Another challenge of implementing ERP is related to change management. It happens that people who suddenly need to switch to a new system are reluctant. Imagine immediately being able to install an AI-powered chatbot that can assist them every step of the way.

You see, it’s a lengthy list of features to improve your company’s efficiency and accuracy but also to provide new data-driven insights in decision-making. AI-powered Microsoft Dynamics ERP enables you to take advantage of a wide range of AI functionalities like automated product descriptions, accurate production planning, avoiding costly stockouts, or optimizing cash flows. It will get you ahead of the curve by deploying the power of AI to your organization.

AI & process automations in D365 Finance & Operations