AI is reshaping ERP strategies as companies pivot to adapt amid digital transformation, budget pressures and evolving business priorities. (Image: 123RF) AI is reshaping the enterprise software landscape, influencing decisions on enterprise resource planning (ERP) migration, upgrades and management, according to technology professionals.Companies are reviewing their ERP strategies as they balance digital transformation goals with tighter budgets, operational complexity and the need to demonstrate measurable business value, they say.Andrew Strachan, director of sales at Spinnaker Support Southern Africa, recently said companies across Africa are reassessing ERP support strategies as decision-makers seek to modernise their environments while managing costs."Enterprise software decisions are not like other technology decisions," said Strachan. “Timelines are longer, dependencies run deeper and the cost of reversing course – if reversing course is even possible – is often measured in years and very substantial sums."According to Strachan, the relationship between a major ERP vendor and its customers rests on more than product capability alone. "It is built on trust: trust in the roadmap, trust in the commercial model and trust that the terms you commit to today will not be materially redefined once your business is locked in."Gerhard Alberts, head of customer evolution at SAP Africa, said trust is ultimately measured by business outcomes.“While customers rightly expect transparency and choice, the greater risk in today's competitive environment is often the cost of inaction," he said. "Ultimately, success is measured not by the technology deployed, but by the operational improvements, agility and competitive advantage it enables.”Alberts said the pace of technological change means companies must adopt relevant technologies to remain competitive, and that customers must be equipped with the most relevant tools to navigate a shifting market. "By not innovating, customers run the risk of attracting direct and potential costs in terms of system and infrastructure stability, security and compliance. This results in an inability to stay competitive across multiple markets due to a lack of agility.”Strachan said new platforms and regular vendor upgrade announcements are adding pressure on companies already facing constrained budgets, skills shortages, infrastructure complexity and currency pressures.“In South Africa and across the African market, large technology decisions are made under intense scrutiny," he said. "Boards and executive teams are balancing growth ambitions against currency pressure, constrained capital budgets, skills shortages, infrastructure complexity and the need to show clear business value from every major investment. In that context, organisations cannot afford to keep revisiting foundational ERP decisions every few years because the vendor’s commercial priorities have changed.”Courtney Hounsell, client experience manager at Microsoft managed partner Braintree, said AI is reshaping the role of ERP platforms while exposing the limitations of legacy systems. He said outdated ERP infrastructure is hindering AI adoption because many companies mistake cloud migration for digital modernisation.“Migration is not modernisation," Hounsell said. "Unfortunately, many companies have merged the two, and the result is a gap that’s creating incoherence and a lack of visibility, constraining their ability to benefit from AI and its capabilities."He explained that cloud migration has been sold as digital modernisation, but this only changes the address of the system. Real modernisation, he said, changes architecture, data models, integration logic and the capacity to generate value. "Companies want their modernisation projects to actively reduce other costs, show long-term ROI and empower their staff with systems that work faster and smarter. So when migration and modernisation are confused, companies end up paying cloud prices for on-premises problems and arrive in the AI era without the foundations required to ensure AI can function effectively."Hounsell said the gap between technology investment and business outcomes is widening, leaving companies with limited AI capability and poor data visibility. He cited McKinsey's "The State of AI in 2025" report, based on a survey of 2 000 executives in 105 countries, which found that 88% of companies have adopted AI in at least one business function.He said on-premises ERP systems struggle to support AI because data must be extracted, cleaned and transferred before analysis.“On-premises ERP systems are struggling uphill within the AI economy," Hounsell said. "They hold their data in local databases, and to make this usable for AI, it has to be extracted, cleaned and pushed somewhere accessible. Without real-time data pipelines feeding into core systems, AI deployments remain siloed and limited.”Braintree said ERP modernisation also delivers financial benefits, citing the Forrester Total Economic Impact study of Dynamics 365 Business Central, which found that companies could achieve a 265% ROI, with productivity gains of 12.5% in operations, 15% in sales and 15.6% in finance. The study also found that companies that modernised successfully avoided more than $30 000 a year in third-party consulting fees, while cloud ERP platforms reduce infrastructure costs and receive automatic updates, including new AI capabilities. Braintree argued that choosing the right migration partner is as important as selecting the ERP platform itself.Alberts added that technical debt continues to grow as companies rely on siloed data, ageing infrastructure and extensive custom code, while shortages of legacy skills compound the problem.“Over time, doing nothing to save money becomes the most expensive system to maintain, together with the inability to adapt, which has the potential to result in the demise of some organisations,” he said.Arthur Goldstuck, CEO of World Wide Worx, wrote in May after SAP Sapphire 2026 that SAP CEO Christian Klein described ERP as the "brain" of every business in the age of agentic AI. Goldstuck quoted Klein: “For over 15 years, we have been developing an ERP with incredibly deep process and data domain know-how. On top of that, all your governance requirements and customer-specific extensions are stored in the ERP. The ERP is the trusted system of execution running your company.”According to Garth Ridgway, senior director for SAP at NTT DATA, misconceptions about implementation timelines, affordability and suitability for mid-market companies continue to delay modernisation."Many executives still assume ERP transformation requires years of disruption and significant upfront investment," Ridgway said. "In reality, modern cloud ERP platforms have evolved considerably, enabling organisations to adopt best-practice processes more rapidly, scale according to business needs and realise value far sooner than was historically possible."