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How AI Complements ERP Systems: A Conversation with Mike Vaishnav

Find out more in this interview with:

Mike Vaishnav
CFO & Strategic Advisor

Moderated by:
Niyati Chhaya
Co-Founder at Hyperbots

Don’t want to watch a video? Read the interview transcript below.

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.

Discussion on 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.

AI and ERP Integration

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.

Budget Considerations

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.

Integration of AI with ERP

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.

Conclusion

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.

 

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