ERP systems have long been described as the backbone of the business. They hold together the company’s central processes and ensure that information and transactions are handled in a uniform way. But as AI becomes an increasingly integrated part of operations, ERP systems are taking on a new role—from being the company’s backbone to also becoming its brain.
When AI agents are given the opportunity to analyze information, make decisions, and take actions, the business context found within ERP systems becomes increasingly important. This is where information gains its context, through knowledge of the business’s processes, business rules, and relationships.
SAP and Microsoft Dynamics 365 among the leaders
In the report IDC MarketScape: Worldwide AI-Enabled Operational ERP 2026 Vendor Assessment, published in September 2026, providers’ ability to meet the demands for AI-driven operational ERP systems is evaluated.
Both SAP S/4HANA and Microsoft are placed in the Leaders category, along with others such as Oracle and IFS. For Microsoft, the evaluation refers to the ERP offering within Dynamics 365, focusing on areas such as finance, supply chains, and manufacturing—areas covered by Dynamics 365 Finance and Supply Chain Management.
What does IDC assess?
IDC MarketScape evaluates providers based on two main dimensions: Capabilities, which covers their current offerings and delivery capacity, and Strategies, which assesses their strategies and readiness to meet future market needs.
Providers are placed in four categories: Leaders, Major Players, Contenders, and Participants. Leaders is the highest category, although the placement itself does not necessarily mean a provider is the best choice for every company.
Two leading platforms with different strengths
SAP and Microsoft have different technical starting points and strengths, but both are developing their platforms for a future where AI becomes an increasingly integrated part of business processes.
Microsoft’s broad ecosystem is highlighted as a key strength in the material surrounding the IDC assessment. Dynamics 365 Finance and Supply Chain Management can interact with Microsoft 365, Azure, Power Platform, and Copilot. This creates opportunities to integrate AI into central business processes in areas such as finance, procurement, production, and logistics, as well as into employees’ daily workflows.
SAP S/4HANA has an established position in complex and interconnected business processes, including finance, production, procurement, and logistics. SAP’s investments in Business AI, Joule, and AI agents aim to further develop the possibilities for AI-based decision support and automation in these processes.
Autonomous Enterprise meets Frontier Firm
Both SAP and Microsoft have presented far-reaching visions for how AI will change the way companies work.
SAP’s vision of the Autonomous Enterprise is about businesses where AI agents can increasingly analyze, coordinate, and carry out tasks in interconnected business processes. Through Joule and SAP Business AI, among others, the possibilities for letting AI take a more active role in the business are being developed.
Microsoft describes a similar development through the vision of the Frontier Firm—a new type of organization where people and AI agents work together and where AI becomes an integrated part of the business’s processes and decision-making. With Dynamics 365 Finance and Supply Chain Management, Copilot, and Power Platform, Microsoft is developing the possibilities to link together business processes, information, and users’ daily work.
Common to both providers is the ambition to evolve ERP systems from traditional transactional systems into platforms that also actively contribute to driving the business forward.
A new phase for the ERP market
At the same time, the rapid development brings new challenges for companies. In a separate analysis from June 2026, IDC points to a growing gap between the possibilities of AI technology and companies’ ability to put them into practice. According to IDC’s forecast, nearly half of AI-driven digital use cases are expected to miss their ROI targets during 2026.
The fact that both SAP and Microsoft are developing their platforms toward more AI-driven and autonomous business processes points toward a major shift in the ERP market. As the technology becomes more advanced, the importance of companies’ own internal capabilities to seize these opportunities also grows.
The question is therefore not just what the ERP systems of the future will be able to do, but how well companies are equipped to use them.
About the report: IDC MarketScape: Worldwide AI-Enabled Operational ERP 2026 Vendor Assessment, September 2026. IDC MarketScape evaluates providers’ current capabilities and future strategies. The placement as a Leader is an analyst assessment and does not mean that a provider is best for all companies.
