In-Depth Analysis of the ERP software market

Enterprise resource planning, or ERP, is the name given to software that manages and automates business processes. The company can manage various back-office tasks in technology, service delivery, and human resources using a variety of integrated applications. The ERP software’s single database includes sales, marketing, product development, manufacturing, and product planning.

The market worth of ERP software in 2021 was USD 50.84 billion and will be worth USD 117.68 billion by 2030, growing at a 9.87% CAGR.

The focus on gathering consumer data and using it to analyze it to make better business decisions is just one of the factors driving growth, and cloud-based ERP software is starting to become more and more popular in the automotive, consumer electronics, manufacturing, pharmaceutical, and apparel industries.

Market Dynamics

The demand for cloud-based ERP solutions will drive the market’s expansion globally. Data sharing between businesses and divisions are possible with cloud-based ERP solutions, which is not the case with traditional ERP solutions. With the help of cloud-based ERPs, businesses can make information accessible to their staff in real time from any internet-connected device, enhancing departmental integration. Leading cloud-based ERP providers Oracle and SAP handle essential business operations like CRM, H.R., inventory and order management, and accounting. Additionally, cloud-based ERP enables businesses to reduce up-front costs for software like simple installation, hardware, and data servers, cost savings, and improved data security, all of which will increase demand for ERP in the coming years.

However, the installation and deployment of ERP systems take a long time and are very expensive. Because of the increased demand for a knowledgeable and experienced workforce, costs for ERP software, security solutions, computer hardware, and updated network equipment have increased. These elements could be the main restraints on the market for global ERP software. The COVID-19 pandemic has also had a negative impact on the ERP software market. Since the second quarter’s quarantines and business closures caused a significant drop in sales, the global industry verticals have been impacted by an inadequate supply of parts for a longer period of time.

Impact of COVID-19

The prevalence of Covid-19 resulted in facility lockdowns and shutdowns, as well as a rise in smartphone usage, which had a favorable effect on the ERP Software market. Advertisers can create more enticing advertisements to attract customers by grabbing their attention. Despite this, consumers are becoming more aware of genuine and fake advertisements because they use their smartphones so frequently. Following the pandemic, the world’s ad output has skyrocketed, which is predicted to increase end-user demand for ERP software. In order to benefit from native ads globally, the players are also investing in them.

Market Segmentation

Deployment Insights

In 2021, the on-premise segment maintained the largest market position, with 70% of the revenue share. In several developing nations, the adoption of on-premises solutions is facilitated by a lack of knowledge about the advantages of cloud-based business solutions. Additionally, it is anticipated that a significant amount of traditional methods for managing the supply chain and other business operations, combined with little automation and technological use, will fuel segment growth.

Function Insights

The finance segment ruled the market with 28.0% of the revenue share in 2021. Accounting, investments, asset management, and cash flow management are just a few of the financial tasks that the ERP software aids in managing. Therefore, over the course of the forecast period, the growing adoption of ERP in the financial function will aid the segment’s growth.

Enterprise Size Insights

In 2021, the large enterprise segment ruled the market with 39% of the revenue share. One of the main factors influencing the segment’s growth is the growing requirement for large businesses to maintain and coordinate complex processes like production planning, procurement, inventory management, order fulfillment, and shipping. A further factor that encourages the adoption of cloud-based ERP software is the large-sized businesses’ high spending capacity for the implementation of contemporary technology and software solutions.

Vertical Insights

In 2021, the manufacturing and service segment held the overall market with 20.0% of the revenue share. In this area, the ERP software aids in managing customer services, monitoring daily operations, and tracking daily performances. The software also provides easy inventory management, production scheduling, and real-time data tracking, among other advantages. 

Regional Insights

The regional market was dominated by North America in 2021, with 35% of the revenue share. The significant market share of this region is primarily attributable to elements like the increasing adoption of ERP software by small and medium-sized businesses, the increasing investments made by ERP vendors in creating software using cutting-edge technologies, and numerous market players.

Key Players Analysis

• Epicor Software Corporation
• Genius Solutions, Inc.
• Acumatica 
• Deltek 
• Global Shop Solutions
• Hewlett-Packard Development Company, L.P.
• IBM Corporation
• IFS, AB.
• Microsoft Corporation
• MIE Track Pro
• Oracle Corporation
• Infor Inc.
• IQMS
• NetSuite Inc.
• OpenPro
• QAD Inc.
• Ramco System
• Plex System 
• Sage Group, plc
• SAP SE
• Unit4
• Workday, Inc. (U.S.)
• SYSPRO
• TOTVS S.A.