Empower the Enterprise with the Powerful Core Capabilities of a Modern, AI-Enabled Cloud ERP
The world is now in the AI era—and organizations making the shift to AI-enabled cloud systems are leveraging the technology to gain competitive advantage, automate workflows, and innovate continuously. IDC's August 2025 Future Enterprise Resiliency and Spending Survey, Wave 7, found that AI enablement brings a host of benefits. Download the Document
The world is now in the AI era—and organizations making the shift to AI-enabled cloud systems are leveraging the technology to gain competitive advantage, automate workflows, and innovate continuously. IDC's August 2025 Future Enterprise Resiliency and Spending Survey, Wave 7, found that AI enablement brings a host of benefits. SPOTLIGHT
Sponsored by: SAP
Empower the Enterprise with the Powerful
Core Capabilities of a Modern, AI-Enabled
Cloud ERP
December 2025
Written by: Mickey North Rizza, Group Vice President, Enterprise Software
The New AI Era: Modern, AI-Enabled Cloud
ERP Technology
The world is now in the AI era — and organizations making the shift to AI-
enabled cloud systems are leveraging the technology to gain competitive
advantage, automate workflows, and innovate continuously. IDC's August
2025 Future Enterprise Resiliency and Spending Survey, Wave 7, found that
AI enablement brings a host of benefits:
» 50% of organizations found increased technical performance of
software, including accuracy of predictions, speed of processing,
and reduced errors.
» 48% found operational efficiencies of greater automation, faster
processing time, and reduced manual workflows.
» 42% had improved key performance indicators like customer
satisfaction and financial outcomes, including cost reductions and
increased revenue.
These benefits help heighten the demand for AI-enabled cloud systems.
IDC's 2025 SaaS Path Survey found that 53% of respondents already use AI
features in their applications. However, 44% plan to advance their
technology based on the generative AI (GenAI) available in the vendor's
product releases. This latter point is significant as organizations now
recognize they need AI enablement in their enterprise applications to spur
better performance. While this may sound like an easy switch, it is a
journey for every organization.
The AI world requires speed, scale, agility, and continuous innovation. The foundation for
business in this new AI world is a powerful, modern, AI-enabled cloud ERP system with
one version of the truth.
The AI world necessitates modern, easy-to-
consume AI-enabled enterprise applications
without complexity and legacy-related
configuration issues.
KEY STATS
According to IDC's May 2025 SaaS Path
Survey:
» 44% of organizations plan to adopt new
ERP systems with generative AI included
within the next 24 months.
» 82% plan to replace their current cloud
ERP system at the end of its subscription.
» 37% must have a modern intelligent
system that enables the business to scale
with speed and agility.
» 34% need better configurability from their
ERP system.
» 33% require embedded AI workflows and
intelligence.
WHAT'S IMPORTANT
» AI-enabled cloud ERP systems
» Standardized business processes
» Automated AI-enabled workflows
» AI and ML
» Microservices architecture
» APIs
» A clean core strategy
AT A GLANCE
Sponsored by: SAP
Empower the Enterprise with the Powerful
Core Capabilities of a Modern, AI-Enabled
Cloud ERP
December 2025
Written by: Mickey North Rizza, Group Vice President, Enterprise Software
The New AI Era: Modern, AI-Enabled Cloud
ERP Technology
The world is now in the AI era — and organizations making the shift to AI-
enabled cloud systems are leveraging the technology to gain competitive
advantage, automate workflows, and innovate continuously. IDC's August
2025 Future Enterprise Resiliency and Spending Survey, Wave 7, found that
AI enablement brings a host of benefits:
» 50% of organizations found increased technical performance of
software, including accuracy of predictions, speed of processing,
and reduced errors.
» 48% found operational efficiencies of greater automation, faster
processing time, and reduced manual workflows.
» 42% had improved key performance indicators like customer
satisfaction and financial outcomes, including cost reductions and
increased revenue.
These benefits help heighten the demand for AI-enabled cloud systems.
IDC's 2025 SaaS Path Survey found that 53% of respondents already use AI
features in their applications. However, 44% plan to advance their
technology based on the generative AI (GenAI) available in the vendor's
product releases. This latter point is significant as organizations now
recognize they need AI enablement in their enterprise applications to spur
better performance. While this may sound like an easy switch, it is a
journey for every organization.
The AI world requires speed, scale, agility, and continuous innovation. The foundation for
business in this new AI world is a powerful, modern, AI-enabled cloud ERP system with
one version of the truth.
The AI world necessitates modern, easy-to-
consume AI-enabled enterprise applications
without complexity and legacy-related
configuration issues.
KEY STATS
According to IDC's May 2025 SaaS Path
Survey:
» 44% of organizations plan to adopt new
ERP systems with generative AI included
within the next 24 months.
» 82% plan to replace their current cloud
ERP system at the end of its subscription.
» 37% must have a modern intelligent
system that enables the business to scale
with speed and agility.
» 34% need better configurability from their
ERP system.
» 33% require embedded AI workflows and
intelligence.
WHAT'S IMPORTANT
» AI-enabled cloud ERP systems
» Standardized business processes
» Automated AI-enabled workflows
» AI and ML
» Microservices architecture
» APIs
» A clean core strategy
AT A GLANCE
Page 2#US53972925
SPOTLIGHT
RP Empower the Enterprise with the Powerful Core Capabilities of a Modern, AI-Enabled Cloud ERP
In IDC's 2025 Future Enterprise Resiliency and Spending Survey, Wave 7, 59% of organizations indicated they are still
digitally transforming toward greater value creation as they become more dependent upon digital technologies, of which
AI is a critical component. Companies in the midst of value creation and digital transformation have told IDC of their
frustrations as they modernize their technology:
"All of the customizations we have spent years doing to make our lives easier [aren't] as easy to understand and
unravel, especially as we move to more modern, standardized cloud-based technology." — CIO, global
manufacturer
"As we look at our business processes now, we worry that we will be spending more to customize the workflows
once again. It is easier and more advantageous for us to take advantage of AI-enabled cloud ERP." — CIO,
technology business
"We no longer have time, nor do we want to customize our workflows. We would rather put our resources into
running the business in the easiest way possible. This means reducing our touch time with our enterprise software
and using standards that are reconfigured outside of the software and only as really needed." — CIO, U.S.
manufacturer
Digitally transforming, especially in the AI world, isn't easy or quick. Successful organizations find that this transformation
requires:
» Thinking about a strategic plan, change management, and the total cost of ownership
» Managing the transformation successfully with smooth user adoption
» Generating a realistic data-driven plan for migration and ongoing operations impact
Successful transformation also relies on other key elements such as technology, data security, integrations, and
connectivity, as well as customizations and extensibility.
Technology
A cloud-first strategy to leverage more standard technology functionality is critical in the digital world. In fact, moving
toward more automation to encompass all business processes will help bring a more efficient organization while gaining
consistency. Some organizations are taking advantage of low-code/no-code solutions to extend their business processes
without impacting their digital core. And many are exploring continuous innovation opportunities, such as AI, GenAI,
machine learning (ML), and agentic AI to continually enhance their technology.
Data Security
Data, and its security, is critical to every business and must be protected throughout the migration and in the cloud.
Utilizing the right migration methods can assist in governing and managing risks.
Integrations and Connectivity
A smooth dataflow that enhances the user experience is the goal. However, this flow can become disturbed when
transitioning integrations to existing or new technology. The organization must ensure optimal response times and
minimal business disruptions while supporting integrations that are upgrade stable.
SPOTLIGHT
RP Empower the Enterprise with the Powerful Core Capabilities of a Modern, AI-Enabled Cloud ERP
In IDC's 2025 Future Enterprise Resiliency and Spending Survey, Wave 7, 59% of organizations indicated they are still
digitally transforming toward greater value creation as they become more dependent upon digital technologies, of which
AI is a critical component. Companies in the midst of value creation and digital transformation have told IDC of their
frustrations as they modernize their technology:
"All of the customizations we have spent years doing to make our lives easier [aren't] as easy to understand and
unravel, especially as we move to more modern, standardized cloud-based technology." — CIO, global
manufacturer
"As we look at our business processes now, we worry that we will be spending more to customize the workflows
once again. It is easier and more advantageous for us to take advantage of AI-enabled cloud ERP." — CIO,
technology business
"We no longer have time, nor do we want to customize our workflows. We would rather put our resources into
running the business in the easiest way possible. This means reducing our touch time with our enterprise software
and using standards that are reconfigured outside of the software and only as really needed." — CIO, U.S.
manufacturer
Digitally transforming, especially in the AI world, isn't easy or quick. Successful organizations find that this transformation
requires:
» Thinking about a strategic plan, change management, and the total cost of ownership
» Managing the transformation successfully with smooth user adoption
» Generating a realistic data-driven plan for migration and ongoing operations impact
Successful transformation also relies on other key elements such as technology, data security, integrations, and
connectivity, as well as customizations and extensibility.
Technology
A cloud-first strategy to leverage more standard technology functionality is critical in the digital world. In fact, moving
toward more automation to encompass all business processes will help bring a more efficient organization while gaining
consistency. Some organizations are taking advantage of low-code/no-code solutions to extend their business processes
without impacting their digital core. And many are exploring continuous innovation opportunities, such as AI, GenAI,
machine learning (ML), and agentic AI to continually enhance their technology.
Data Security
Data, and its security, is critical to every business and must be protected throughout the migration and in the cloud.
Utilizing the right migration methods can assist in governing and managing risks.
Integrations and Connectivity
A smooth dataflow that enhances the user experience is the goal. However, this flow can become disturbed when
transitioning integrations to existing or new technology. The organization must ensure optimal response times and
minimal business disruptions while supporting integrations that are upgrade stable.
Page 3#US53972925
SPOTLIGHT
RP Empower the Enterprise with the Powerful Core Capabilities of a Modern, AI-Enabled Cloud ERP
Customizations and Extensibility
Businesses must think about which processes might need customization. While the cloud offers an opportunity to have
more standardized workflows, there may be industry and regulatory standards to consider. Customizations must not
impact upgrades or innovation, so instituting governance and adhering to code quality and standards are a must.
Legacy Systems Compound the Movement to Digital Business
Many digitally transforming businesses still use legacy systems, particularly for ERP. This tendency exposes the
organization to risk in its ability to compete. Companies with legacy systems often cannot run their business with as much
agility, resiliency, speed, and scale as competitors with more modern technology. Without implementing more modern
systems, these organizations are left struggling with:
» Data inconsistencies, inefficient processes, and difficulties in generating comprehensive reports
» Complex, costly customizations requiring specialized technical expertise to update them
» Difficulties in responding to swiftly evolving market circumstances
» Lags in decision-making due to delayed reporting cycles and data analysis that requires time-consuming manual
data extraction and manipulation
» Management of costly operations
Legacy systems have been customized to keep current infrastructure functioning. However, this tactic creates technical
debt that:
» Is complex, as many business processes have been customized into the system code directly, modifying it to meet
business needs
» Is more expensive to run and upgrade as well as latent in response time
» Enables complex and costly innovation that requires too many resources and increases the potential for business
disruption
Modern Technology Systems Offer Simpler Configuration and
Standardization Methodologies
Modern enterprise application systems hosted in the cloud have automated workflows, a microservices architecture, and
APIs. Enhanced with AI and ML, these systems enable organizations to move with speed, agility, and scale. Organizations
using modern enterprise applications have told IDC:
"Our current pace of business requires that we access information quickly and make the right decisions based on
the insights we receive so we can be successful. It doesn't matter if it is an external customer request, an internal
business owner, or even financial input, we need to move quickly and efficiently." — CIO, CPG company
"We have moved into the digital era. Our very survival depends upon modern technology that is easy to operate,
in the cloud, and automates as many of our business processes as possible." — CFO, technology organization
SPOTLIGHT
RP Empower the Enterprise with the Powerful Core Capabilities of a Modern, AI-Enabled Cloud ERP
Customizations and Extensibility
Businesses must think about which processes might need customization. While the cloud offers an opportunity to have
more standardized workflows, there may be industry and regulatory standards to consider. Customizations must not
impact upgrades or innovation, so instituting governance and adhering to code quality and standards are a must.
Legacy Systems Compound the Movement to Digital Business
Many digitally transforming businesses still use legacy systems, particularly for ERP. This tendency exposes the
organization to risk in its ability to compete. Companies with legacy systems often cannot run their business with as much
agility, resiliency, speed, and scale as competitors with more modern technology. Without implementing more modern
systems, these organizations are left struggling with:
» Data inconsistencies, inefficient processes, and difficulties in generating comprehensive reports
» Complex, costly customizations requiring specialized technical expertise to update them
» Difficulties in responding to swiftly evolving market circumstances
» Lags in decision-making due to delayed reporting cycles and data analysis that requires time-consuming manual
data extraction and manipulation
» Management of costly operations
Legacy systems have been customized to keep current infrastructure functioning. However, this tactic creates technical
debt that:
» Is complex, as many business processes have been customized into the system code directly, modifying it to meet
business needs
» Is more expensive to run and upgrade as well as latent in response time
» Enables complex and costly innovation that requires too many resources and increases the potential for business
disruption
Modern Technology Systems Offer Simpler Configuration and
Standardization Methodologies
Modern enterprise application systems hosted in the cloud have automated workflows, a microservices architecture, and
APIs. Enhanced with AI and ML, these systems enable organizations to move with speed, agility, and scale. Organizations
using modern enterprise applications have told IDC:
"Our current pace of business requires that we access information quickly and make the right decisions based on
the insights we receive so we can be successful. It doesn't matter if it is an external customer request, an internal
business owner, or even financial input, we need to move quickly and efficiently." — CIO, CPG company
"We have moved into the digital era. Our very survival depends upon modern technology that is easy to operate,
in the cloud, and automates as many of our business processes as possible." — CFO, technology organization
Page 4#US53972925
SPOTLIGHT
RP Empower the Enterprise with the Powerful Core Capabilities of a Modern, AI-Enabled Cloud ERP
Organizations using modern enterprise applications find that:
» SaaS, cloud, and AI-enabled applications empower employees with greater flexibility to work anywhere, at any
time, and on any device, surfacing greater insights quickly while enabling faster decision-making.
» Standard business processes that come from industry best practices can be utilized out of the box.
» A cloud-friendly extension framework can be leveraged with composable capabilities to deliver quick business
benefits.
» Automated workflows complete tasks faster, reduce human errors, capture more critical operational information,
and enhance an organization's decision-making abilities. AI, GenAI, and ML help streamline business processes,
provide greater insights, and can also detect and deploy repeatable workflows based on real-time data to improve
the user experience. In addition, agentic AI brings more autonomous workflows, aiding the employee in faster
guided responses.
» A modular composable enterprise system evolves the technology stack because it is a collection of loosely
coupled services that are independently deployable and organized around business capabilities.
» Integrations and APIs facilitate increased automation by streamlining the flow of data between applications as
well as the speed with which they are deployed.
From an ERP perspective, IDC finds that organizations not only want these attributes found in modern enterprise
applications but also count on them. IDC's May 2025 SaaS Path Survey gathered responses from over 2,877 individuals
globally across 23 application areas. Respondents included 150 ERP system users whose vision of the perfect ERP system
is described in Figure 1.
This ERP vision means organizations want one platform that ties into their front-office systems and is modern and
intelligent. They want the ERP system and the platform it sits on to be simple to update with easy integrations, more
speed, greater agility, and an ability to scale as needed. All these features mean the ERP system is on a platform to digest
data, so sound business decisions can be made. These attributes are table stakes in the AI era. Of equal importance is
understanding that the underlying ERP system has few or no customizations. These more modern enterprise applications
can enable configurable workflows that do not disrupt the core of the product, instead keeping the data clean and
ensuring a smoother path to upgrades and innovation. This concept is called a clean core.
SPOTLIGHT
RP Empower the Enterprise with the Powerful Core Capabilities of a Modern, AI-Enabled Cloud ERP
Organizations using modern enterprise applications find that:
» SaaS, cloud, and AI-enabled applications empower employees with greater flexibility to work anywhere, at any
time, and on any device, surfacing greater insights quickly while enabling faster decision-making.
» Standard business processes that come from industry best practices can be utilized out of the box.
» A cloud-friendly extension framework can be leveraged with composable capabilities to deliver quick business
benefits.
» Automated workflows complete tasks faster, reduce human errors, capture more critical operational information,
and enhance an organization's decision-making abilities. AI, GenAI, and ML help streamline business processes,
provide greater insights, and can also detect and deploy repeatable workflows based on real-time data to improve
the user experience. In addition, agentic AI brings more autonomous workflows, aiding the employee in faster
guided responses.
» A modular composable enterprise system evolves the technology stack because it is a collection of loosely
coupled services that are independently deployable and organized around business capabilities.
» Integrations and APIs facilitate increased automation by streamlining the flow of data between applications as
well as the speed with which they are deployed.
From an ERP perspective, IDC finds that organizations not only want these attributes found in modern enterprise
applications but also count on them. IDC's May 2025 SaaS Path Survey gathered responses from over 2,877 individuals
globally across 23 application areas. Respondents included 150 ERP system users whose vision of the perfect ERP system
is described in Figure 1.
This ERP vision means organizations want one platform that ties into their front-office systems and is modern and
intelligent. They want the ERP system and the platform it sits on to be simple to update with easy integrations, more
speed, greater agility, and an ability to scale as needed. All these features mean the ERP system is on a platform to digest
data, so sound business decisions can be made. These attributes are table stakes in the AI era. Of equal importance is
understanding that the underlying ERP system has few or no customizations. These more modern enterprise applications
can enable configurable workflows that do not disrupt the core of the product, instead keeping the data clean and
ensuring a smoother path to upgrades and innovation. This concept is called a clean core.
Page 5#US53972925
SPOTLIGHT
RP Empower the Enterprise with the Powerful Core Capabilities of a Modern, AI-Enabled Cloud ERP
FIGURE 1: Vision of the Perfect ERP System
Q What is your vision of the perfect ERP system?
n = 150
Source: IDC's SaaS Path Survey, May 2025
A Clean Core
IDC defines a clean core as the core of the technology system remaining clean such that the data within it —
configuration data, master data, and transactional data — is not impacted by any additional customizations. When
organizations adopt an ERP clean core strategy, it makes it easier to adopt the latest release quickly, reduce
modifications, and enable extensions and customizations to continue because they are cloud compliant. When the
underlying ERP operations are standardized, best practices can be leveraged and customizations are only done to
differentiate the business.
When a company has a clean core, it can:
» Add functionality by extending what is needed without impacting the built-in standards.
» Enable the system to be integrated with other systems and with extensions for additional functionality without
impacting the information contained within the system.
» Use the business processes contained within the system without modifying what is there.13.3
16.7
20.7
21.3
29.3
30.0
31.3
34.7
37.3
37.3
0 10 20 30 40
Little to no customizations
A composable system
Integrated digital workflows without manual
workflows
A modular system
More speed, greater agility, and the ability to
scale as needed
One digital platform that handles all our internal
and external workflows
Easy updates
Easy integrations
A modern and intelligent system that enables our
business to scale with speed and agility
One platform that ties easily into our CRM and
front-office systems
(% of respondents)
SPOTLIGHT
RP Empower the Enterprise with the Powerful Core Capabilities of a Modern, AI-Enabled Cloud ERP
FIGURE 1: Vision of the Perfect ERP System
Q What is your vision of the perfect ERP system?
n = 150
Source: IDC's SaaS Path Survey, May 2025
A Clean Core
IDC defines a clean core as the core of the technology system remaining clean such that the data within it —
configuration data, master data, and transactional data — is not impacted by any additional customizations. When
organizations adopt an ERP clean core strategy, it makes it easier to adopt the latest release quickly, reduce
modifications, and enable extensions and customizations to continue because they are cloud compliant. When the
underlying ERP operations are standardized, best practices can be leveraged and customizations are only done to
differentiate the business.
When a company has a clean core, it can:
» Add functionality by extending what is needed without impacting the built-in standards.
» Enable the system to be integrated with other systems and with extensions for additional functionality without
impacting the information contained within the system.
» Use the business processes contained within the system without modifying what is there.13.3
16.7
20.7
21.3
29.3
30.0
31.3
34.7
37.3
37.3
0 10 20 30 40
Little to no customizations
A composable system
Integrated digital workflows without manual
workflows
A modular system
More speed, greater agility, and the ability to
scale as needed
One digital platform that handles all our internal
and external workflows
Easy updates
Easy integrations
A modern and intelligent system that enables our
business to scale with speed and agility
One platform that ties easily into our CRM and
front-office systems
(% of respondents)