Give Legacy Systems Like TPS the Power of AI

"Help! My company runs off old legacy software! There is no ERP or CRM, but we desperately need AI data analytics to improve forecasting, control inventory, and drive sales!"

Many companies, particularly those with annual revenues under $100M, still need to rely on older legacy systems such as Transaction Processing Systems (TPS) without comprehensive ERP or CRM solutions. There are several reasons for this:

• Cost and Complexity: Implementing modern ERP and CRM systems can be prohibitively expensive and complex, often requiring significant financial investment, time, and organizational disruption. For many smaller businesses, the cost-benefit analysis doesn't justify the expense and effort.

• Sunk Costs in Legacy Systems: Many businesses have invested heavily in customizing and maintaining their legacy systems. These systems are deeply embedded in their operations, making a switch to new systems not only costly but also risky in terms of potential downtime and transition challenges.

• Operational Adequacy: In some cases, these legacy systems still adequately meet the core needs of the business, providing the necessary functionality for day-to-day operations, albeit with limitations in flexibility and advanced analytics.

Leveraging AI Like ChatGPT with Legacy Systems

AI tools like ChatGPT offer a cost-effective way to enhance the capabilities of these legacy systems without requiring a full-scale upgrade to a new ERP or CRM system. Here’s how:

Example: Sales Forecasting and Inventory Management

Current Situation: A mid-sized manufacturing company uses a TPS to handle sales transactions and inventory management but lacks sophisticated data analytics tools.

Challenge: The company struggles with accurate sales forecasting and inventory management due to the limitations of its legacy TPS and manual data processing.

Solution: Integrate ChatGPT to enhance data analysis capabilities.

• Data Extraction and Cleaning: Extract historical sales data from the TPS using scripts or data extraction tools. Clean and format the data to ensure it’s ready for analysis.

• Sales Forecasting: Feed the cleaned data into ChatGPT to analyze past sales patterns and forecast future demand. This process involves using AI to predict which products will be in demand, helping to adjust inventory levels accordingly.

• Inventory Recommendations: Use ChatGPT to recommend optimal inventory levels and reorder points based on sales forecasts. This helps in maintaining optimal stock levels, reducing both overstock and stockouts.

Detailed Example

Jacob Parrish (AI consultants) recently worked with a company to enhance sales forecasting at an individual customer level. This mid-sized manufacturing company sells pipes and fittings and constantly quotes to distributors. This company uses a legacy Transaction Processing System (TPS) without a modern ERP or CRM system. By integrating ChatGPT, the company significantly improved its data analysis and sales forecasting capabilities.

First, historical quote and order data were extracted from the TPS and cleaned to ensure accuracy. This data was then merged to create a comprehensive dataset, combining customer interactions with SKU details. Using this dataset, ChatGPT analyzed conversion rates for each SKU, identifying which products are more likely to convert into sales and which are frequently quoted but seldom purchased. This detailed analysis allowed the company to make informed decisions about inventory management and customer targeting.

Additionally, ChatGPT can provide predictive insights and recommendations. For example, by analyzing patterns in past quotes and orders, the AI can predict the likelihood of specific SKUs being purchased by individual customers in the future. This allows sales teams to prioritize efforts on high-conversion opportunities and tailor their strategies to meet customer needs more effectively.

By leveraging AI in this way, the company not only enhances its sales forecasting accuracy but also improves overall operational efficiency and customer satisfaction.

If your business could use assistance leveraging AI to enhance your legacy software, Jacob Parrish can help! Please visit our website: Jacob Parrish LLC.