The second annual survey conducted by Rootstock indicates that 82% of manufacturers surveyed are planning to increase their AI budgets for 2025. This statistic highlights a shift in how organizations are approaching artificial intelligence, particularly as they strive to enhance operational efficiency, boost productivity, and remain competitive in a rapidly evolving market.
“As AI applications mature, manufacturers are turning to ERP solutions to anchor their AI investments, ensuring seamless data flow and actionable insights across their organizations,” said Raj Badarinath, Chief Product & Marketing Officer at Rootstock Software. “This survey reinforces the need for a robust digital infrastructure as AI becomes integral to strategic decision-making in manufacturing.”
Key findings
- AI Adoption and Usage Trends: Over 77% of manufacturers have implemented AI solutions, a rise from 70% in 2023, with applications spanning from production (31%) to inventory management (28%) and customer service (28%)—reflecting AI’s growing role in optimizing day-to-day operations.
- Preference for Copilots: Manufacturing professionals favor “copilots” (53%), which support human roles, rather than fully autonomous agents which could replace human resources. This indicates a strong preference for collaborative AI capabilities that enhance workforce productivity while maintaining human oversight.
- AI Applications Expand into More Functions: AI for supply chain management (49%) and big data/analytics (43%) rose as leading drivers for AI investment, highlighting a strategic focus on balancing demand, supply, and production with AI’s predictive capabilities.
- ERP’s Pivotal Role in AI Adoption: ERP solutions are crucial for successful AI usage, with manufacturers relying on an ERP to contextualize and manage data. However, 56% of manufacturers expressed uncertainty about their ERP systems’ readiness for AI integration, underscoring the ongoing need for ERP modernization.
The adoption of AI technologies can facilitate predictive analytics, allowing manufacturers to better anticipate market demands and optimize their supply chains.
Explore related questions
According to SAPinsider research, the primary driver for adopting AI, as highlighted by 32% of the respondents, is the imperative to automate repetitive and time-consuming tasks. This emphasizes a strategic shift towards enhancing operational efficiency and reallocating human resources to higher-value tasks, which can significantly impact overall productivity and competitiveness. This proactive approach can ultimately lead to cost savings and increased profitability.
“We are witnessing a pivotal moment where manufacturers are adopting AI not just as a productivity tool but as a strategic asset,” added Badarinath. “Manufacturers who embrace AI within a strong ERP will be well-positioned to lead in an AI-driven market.”
What this means for ERP Insiders…
- A growing reliance on AI: For CIOs and senior business leaders, this data serves as a crucial indicator of the growing reliance on AI technologies to drive business transformation. Companies are recognizing that integrating AI into their operations is no longer optional but essential for sustaining growth and innovation. The implications of this trend are profound; organizations that invest in AI can expect to see improved decision-making processes, streamlined workflows, and enhanced customer experiences.
- Need for strategic integration: CIOs and business leaders should prioritize understanding the specific needs of their organizations and identify the most suitable AI solutions. This may involve collaborating with technology partners, investing in workforce training, and fostering a culture of innovation.
- The long-term ROI of implementing AI: As organizations prepare to boost their AI budgets, it is crucial to consider the long-term implications of these investments. Leaders must ensure that their AI initiatives align with broader business objectives and that they are equipped to measure the return on investment effectively. By doing so, they can leverage AI not just as a tool for automation but as a catalyst for transformative change.
