ERP software is used by organizations to manage daily activities such as procurement, risk
management, accounting, supply chain operations, and project management. It is a platform
that provides a wide range of business functions such as financial management, human
capital management, supply chain management, customer management, inventory and work
order management, and so on.
The global ERP software market was worth $50.44 billion in 2021 and is expected to be
worth $117.68 billion by 2030, with a CAGR of 9.87% from 2021 to 2030.
ERP software implementation in organizations can reduce inventory costs by 25% – 30% and
raw material costs by around 15%. The software facilitates the flow of cross-functional
information, improving productivity and decision-making. Over the forecast period, an
increase in the number of SMEs in developing economies such as China, India, and Brazil is
expected to boost product demand. The adoption of I.T. technologies in these economies is
expected to change consumer behavior, resulting in greater use of ERP software rather than
manual operations.
Impact of COVID-19 on Enterprise Resource Planning growth
The unprecedented COVID-19 outbreak forced organizations to shift to work-from-home
models almost overnight. As a result, demand for ERP software and enterprise performance
management increased exponentially during the second and fourth quarters of 2022. ERP
software provides numerous benefits, including improved data integrity and financial
controls, lower management and operational costs, and fewer opportunities for errors during
the lockdown period.
Key industry drivers
Developing economies such as Brazil, China, India, Russia, and Turkey are rapidly
implementing ERP software in a variety of industries. The countries’ growth rates are
4.6%, 8.1%, 8.9%, 4.3%, and 11%, respectively. Engineering, automotive, steel,
services, textiles, and consumer durables are the industries driving growth in India. In
Russia, the 1C ERP is standard and known to almost all accountants. China adopted
the self-development model for their ERP software, such as Yonyou and Kingdee,
whereas SAP and Oracle hold nearly 40% of China’s ERP market share, indicating
that local players dominate the market in China. SAP, Totvs, and Oracle are the most
popular ERPs in Brazil. According to a collaborative study published in Turkey, after
evaluating a sample size of 64 ERP users from 31 companies, 55% used Global ERP
systems, and 45% used Native ERP systems. As a result of numerous companies
implementing the use of ERP systems, the market for ERP softwares will continue to
grow in the coming years.
Infrastructure for information technology (I.T.) has been rapidly growing in
developed countries since the mid-1980s and has been rapidly adopted in developing
countries over the last two decades. India and China, classified as developing
countries, have the largest consumer base of internet users, with more than 1.6 billion
users in these two countries. China announced in 2021 that it would invest over USD
1.2 trillion in I.T. infrastructure over the next five years. According to the European
Commission, the Digital Europe Programme aims to invest Euro 1.38 billion in digital
infrastructure advancements in the coming years. With almost all regions heavily
investing in advancing their I.T. and allied industries, there will be a significant rise in
the demand for ERP systems for data mining, product data management, and product
life cycle management, further cementing the growth of ERP softwares.
Trends and Opportunities
Any cloud-based system implies that the data is generated in one location and stored in
servers. Cloud storage provides individuals and businesses with greater flexibility in carrying
out their operations and additional security features. As a result of the pandemic, several ERP
providers began to offer more cloud-based solutions to companies that needed them.
Amazon, Starbucks, and Toyota are the most well-known companies implementing the same.
As a result, as more ERP product companies enable cloud computing, the market for ERP
softwares will explode in the coming years. According to SMR’s research, around 3.61 billion
cloud users currently use cloud storage, accounting for nearly half of the world’s population.
Furthermore, the study found that nearly 69% of users in the United States store their
software data on cloud platforms.
Market Restraints
The major disadvantage of deploying ERP software is the high initial capital expenditures,
followed by the need for highly technical employees to maintain the product.
Competitive landscape analysis
Acumatica
Deltek
Epicor Software Corporation
Genius Solutions, Inc.
Global Shop Solutions
Hewlett-Packard Development Company, L.P.
IBM Corporation
Microsoft Corporation
SAP SE
Oracle Corporation
others
