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Artificial intelligence (AI) will likely widen the gap between execution-focused platforms and traditional application vendors, with the next enterprise resource planning (ERP) cycle likely to favour companies that can translate AI-driven intelligence into trusted execution, measurable customer value and sustainable monetisation, as per a Bernstein report.
The ERP market is entering a major transition, potentially comparable to the shift from on-premise software to cloud computing, with artificial intelligence (AI) expected to reshape industry leadership, business models and valuations. Noting that ERP is reaching a structural inflection point, Bernstein said,AI is pushing ERP from a system of record toward a system of execution, creating a new investment debate: not who owns enterprise data, but who controls enterprise work. It further highlighted that AI is expected to reinforce rather than diminish the importance of ERP systems, as autonomous AI agents require trusted data, defined process rules, permissions, governance frameworks and auditability to operate safelycapabilities that are already embedded across many ERP platforms. The likely winners will therefore be vendors that can translate AI into controlled execution within mission-critical workflows, rather than those with the most impressive AI demonstrations. Investors should focus less on AI visibility and more on AI value, it stressed. Bernstein also expects competition between incumbent ERP providers and AI-native companies to be more evolutionary than disruptive, but flagged AI-native vendors and neutral orchestration platforms capturing workflow and execution layers above traditional ERP systems as a bigger competitive risk. The ERP industry could be heading towards a business-model shift similar to the earlier transition from perpetual software licences to cloud subscriptions, as vendors increasingly seek to monetise workflow execution rather than simply software access. This could open new revenue opportunities across automation, orchestration and governance. However, the transition is expected to be gradual, with many customers likely to continue relying on AI copilots, recommendations and supervised workflows for several years. Vendors that can demonstrate large-scale production adoption, measurable workflow automation and a clear path to monetisation are likely to be better positioned as the market evolves. The next ERP cycle will not reward every vendor equally; it will reward those that can turn intelligence into trusted execution, it stressed. (ANI)
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