AI & ERP: With Powerful Technology Comes Potent Risks

As we have stated before, the potential of Artificial Intelligence (AI) to positively transform Enterprise Resource Planning (ERP) technologies is nothing short of staggering. But with revolutionary transformation inevitably comes risk. As a law firm that works closely with clients on ERP implementation, licensing disputes, and audit defense (Oracle and otherwise), we want to bring to your attention a big issue we are seeing at play: vendor-led AI integration shifting risk onto the customer – often to the customer’s complete (and belated) surprise.

Companies Should Look Out for These Key Risks

1. Licensing Traps Hidden within AI Features
   AI-enabled functionality may trigger new usage metrics, hybrid cloud charges, or ambiguous contract terms. If it hasn’t already, Oracle (or other vendors) could attempt to treat AI usage as a premium feature that justifies additional fees – even retroactively.
2. Audit Exposure from AI Integration
   AI creates both new risks and amplifies existing ones in vendor agreements. As such, procurement and legal teams should update contract terms to address AI-related issues.
3. Loss of Control Over Data
   Vendor-led AI tools may process sensitive data without adherence to existing contractual safeguards.
4. One-Size-Fits-All AI Might Not be the Right Fit
   Just because a vendor offers an AI tool doesn’t mean it’s the right one for you. Locking into vendor-provided AI may limit your going-forward ability to adopt the very best tools and increases your dependence on the vendor for future capabilities.

AI & ERP: What You Can Do

• Scrutinize the fine print of any AI-enabled features before activating them.
• Seek legal guidance early for contract review and AI/ERP strategy.
• Retain flexibility by choosing/building AI tools that closely align with your organization’s specific needs.
• Document your AI strategy to ensure traceability and compliance if audited.

It continues to be incumbent on your counsel to ensure that your company is positioned to enjoy the full scope of potential benefits while diligently fending off vendor attempts to impose a disproportionate amount of risk onto the licensee. As counsel that has assisted companies with ERP installation roadmaps, we also note with interest and concern the increasing role of AI in preparing project roadmaps. As CIO stated, with many companies blindly following ERP vendors’ AI roadmaps, they may be lacking a full understanding of the consequences coming down the pike:

While savvy CIOs bring both business and technology acumen to the table, the most successful follow a business-driven IT roadmap, not one handed to them by their ERP vendor. Especially when it comes to AI.

In sum, ERP vendors are excited about AI, but they are constantly pushing new revenue models, so it is imperative to make sure your company is not buying into more than it bargained for. If you would like assistance reviewing your company’s ERP licensing terms or evaluating audit exposure, we are ready to help you.  

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Beeman & Muchmore has written about several topics of importance concerning AI and ERP in the past year and will continue to do so as we come across new topics that we feel are important to ERP customers. One of our core principles when counseling clients is that you are only as protected — and your business is only as safe — as is provided for in your ERP licensing agreements.

Published on August 12, 2025