How To Unlock Intelligent Operations With Cognitive Technology

By David Sweetman, Senior Director, Global Product Marketing SAP S/4HANA

Even when no playbook, expertise, and best practice exist, there’s always plenty of data ready to be put to work to generate insights, offer recommendations, and inspire ingenuity. But to get the most value out of that intelligence, businesses must first have the right strategies and tools in place. 

The good news is that today’s global uncertainty is compelling businesses to shift their data management and analytics capabilities to digital quickly. The IDC market spotlight, “Digital Transformation in Times of Change: What Intelligent Enterprises Need from Their ERP Systems,” predicts artificial intelligence (AI) will be the core for organizations by the end of 2020, as 50% purchase applications focused on the user experience. 

AI and other cognitive technologies – such as machine learning, deep learning, and robotic process automation – are fueling this critical leap by turning ERP data into automated insights and bringing business value in real time. Such a step can bring companies closer to their potential as an intelligent enterprise with the speed and foresight to thoroughly consider changes detected throughout the internal and external ecosystem.

Clear overview and added value

In many ways, businesses have been steadily setting the stage for cognitive operations. They have accrued massive volumes of data while augmenting a wide array of transactional systems, analytics, and embedded sensors. And now, most of them are reaching a tipping point in their ERP capabilities as these digital investments generate more insights than people can process, which is already becoming a significant challenge.

Unfortunately, relatively static, simplistic rules governed by transactional engines pose no match against a highly dynamic, volatile marketplace. According to Joshua Greenbaum, principal of Enterprise Applications Consulting, “A company’s ability to manage change is a huge factor that dictates the pace and extent of digital transformation. New processes require new user experiences, new work habits, and new notions of what is the role of business users, IT departments, and external stakeholders.”

One company that clearly received and embraced Greenbaum’s message is Döhler GmbH. The natural ingredient solutions provider for food and beverage makers all over the world is using a combination of intelligent ERP and machine learning to automate the reconciliation of accounts receivable. This project gave a 20% boost in the number of postings – totaling roughly 3,000 per month and continuing to increase as new codes are incorporated into the algorithm.

“It saves us time that can be spent on non-administrative tasks such as following up on unpaid invoices,” shared Harald Muley, Head of Corporate Functions IT of Döhler. “And it is an important milestone in our journey to digitally transform the finance function.”

Learning to combine this digital investment with relevant best practices, a cloud platform, and cash application software is empowering Muley’s accounts receivable team to transform the business culture. With access to intelligent tools, the finance team quickly and accurately runs an end-to-end reconciliation process in a matter of minutes. Receivables are pulled from the ERP, ran through the cash application software, and reposted to the ERP system – all with a simple automation configuration that is continuously calibrated every three months.

As Döhler’s experience proves, intelligent technologies enable business processes to run more insightfully, responsively, and productively. The speed at which operations can detect and adjust without losing a single percentage of operational efficiency brings a significant competitive edge.

Self-learning intelligence brings a new era of resilience

At the end of the day, it’s clear that legacy systems cannot perform at the peak level that businesses need today. Intelligence cannot be simply bolted on. Transactions and analytics using different data sets are no longer sufficient for decision-making.

To unlock the true value of being an intelligent enterprise, cognitive capabilities cannot be an afterthought. Businesses require a new generation of ERP that operates on a data model, setting a standard of intelligence and actions across the enterprise.

Organizations can then, once and for all, operate with omniscient-like intelligence by converting static information into insights with a self-learning adaptive cognitive model. This capability can drive a significant edge, such as enhanced forecasts in cash flow, revenue performance, demand-driven material requirements, and supply chain productivity. Meanwhile, internal and external data accelerate systematic discovery and enhanced decision-making.

Explore today’s business challenges and the best way to move with resilience and intelligence in the IDC market spotlight, “Digital Transformation in Times of Change: What Intelligent Enterprises Need from Their ERP Systems,” sponsored by SAP.

This is the second installment of our ERP Edge series. Read the first installment here.

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