Artificial Intelligence in ERP: A strategic lever for healthcare and life sciences leaders
Enterprise resource planning (ERP) systems are the operational core of healthcare operations and life sciences innovation. Historically, they were tools of the trade used for record keeping. Today, artificial intelligence has enhanced ERP systems, making them forward-looking and predictive tools that can achieve efficiency improvements of up to 40%.
It’s no surprise that health care systems and life sciences companies are facing operational and financial pressures. In healthcare, staff shortages, patient demands and reimbursement complexities slow everything down; for life sciences, R&D cycles are long and regulatory compliance and operating costs are high. Even with these challenges, leaders and regulators expect accurate, auditable processes at every stage.
ERP vendors are addressing the root causes of these problems with AI-enabled platforms. Generative AI tools can reduce implementation effort by up to 40%, and in the United States alone, private AI investment will reach $109.1 billion by 2024, underscoring growing confidence in the transformative potential of AI. Particularly for the healthcare and life sciences sectors, this power can only come from proper coordination between finance, operations and compliance teams.
By adopting an AI-powered ERP system, businesses can improve operational efficiency, compliance, reliability, and decision-making speed. Most major ERP platforms will have AI capabilities built into them, but the real value will come from how healthcare and life sciences organizations embed and oversee this technology in their day-to-day operations.
Leveraging Artificial Intelligence to Address Operational Challenges
To become a system-wide benefit and lead to positive outcome shifts, AI integration must address key challenges with a clear understanding of barriers and expected outcomes.
- Make financial forecasts smarter
challenge: Healthcare and life sciences leaders face difficulties predicting future resource needs, effectively budgeting, and proactively responding to operational signals because they must translate complex volumes of financial and operational data into accurate, actionable forecasts.
Solution: AI-driven ERP helps transform raw financial data into useful guidance that supports decision-making.
result: AI highlights patterns and examines trends in order to identify future challenges and needs. Leaders can use AI to observe operational signals such as transaction data, claims activity and seasonal demand to aid better decision-making. This will enhance financial forecasting, resource planning and budget management. For example, hospitals can adjust staffing, plan resources, and prepare for cash flow needs ahead of busy periods like flu season, while drug manufacturers can keep operations running smoothly by aligning production budgets with upcoming approvals or inspections.
- Understand and address supply chain risks
challenge: Supply chains in healthcare and life sciences are extremely complex, and even small delays or disruptions can impact patient care, clinical trials and production plans.
Solution: AI-driven ERP keeps a close eye on suppliers, shipping schedules, and external factors such as global events or logistics obstacles.
result: When something looks risky, the system suggests alternatives, using its data to weigh the trade-offs between cost, time and quality. The system also enhances material traceability by tracking where the material came from, how it was handled, and the teams that came into contact with the material. This makes regulatory reporting easier and more satisfying while enhancing supply chain optimization.
- Simplify recording and archiving
challenge: Hospitals, research organizations, and life sciences companies generate massive data sets: clinical trials, patient records, operational logs, financial transactions, and more. Many regulations require that this information be retained for years or even decades. Keeping all this information in a full-featured ERP system can result in overloaded storage, degraded performance, and subject the company to additional storage costs.
Solution: With the help of artificial intelligence, data can be automatically classified and ensure that large amounts of data are managed effectively without overloading the system or violating regulatory requirements.
result: Artificial intelligence in ERP helps differentiate between records that require immediate access and those that can be archived, enforce retention policies and ensure records are released only when allowed. The result is faster systems, lower infrastructure costs and compliance assurance.
Establish safe and correct use of artificial intelligence
Regulation of artificial intelligence is becoming increasingly strict; however, different standards exist for different industries. In healthcare and life sciences, leaders need to pay close attention to how AI is implemented. The adoption of AI in ERP cannot compromise regulatory standards, so these organizations need to follow three basic practices:
- verify – AI tools must work as expected, with complete documentation confirming that the model operates reliably under real-world conditions.
- Traceability – AI inputs, outputs and the logic behind them must be explainable.
- governance – There must be human oversight to approve updates, monitor performance and intervene when needed.
Securing ERP systems
Cybersecurity is a constant threat to any online system, and ERP is no exception. Due to the depth of private and sensitive data maintained in these systems, security must be a top priority, both operationally and personnel-wise. Not only should the data be protected, but also the algorithms themselves. Organizations should apply continuous monitoring, identity and access controls, and vulnerability management. Employee training is equally important. Social engineering and phishing scams are very common threats. Safety measures should be taught and enforced at every stage of the process.
Turn artificial intelligence into strategic advantage
An AI-driven ERP system is more than just another technology upgrade. It's a quiet competitive advantage that automates financial forecasting, enhances supply chain traceability, and enhances quality control. If implemented correctly and combined with the right operating procedures, ERP systems can provide undeniable value. With these results, leaders can strengthen future developments: better personalized medicine and care, flexible and radical manufacturing, and more complex and lucrative global supply chains.
Photo: Lin Weiquan, Getty Images
Juanita Schoen is a project manager in Columbus where she guides healthcare and life sciences organizations through their ERP modernization and AI adoption. She has over 15 years' experience as an IT Director and Project Manager, leading the delivery of ERP, clinical, regulatory, quality and safety systems. Her career includes leadership roles at Amylin, Pfizer and Abnology, as well as consulting services to pharmaceutical, biotechnology and healthcare companies.
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