ERP Software Market

Report Overview

The ERP Software Market size is expected to be worth around US$ 136.1 Billion by 2032 from US$ 51.4 Billion in 2022, growing at a CAGR of 10.5% during the forecast period 2023 to 2032.

ERP (Enterprise Resource Planning) software can help organizations reduce inventory costs by 24-31% and raw material implementation costs by about 15%. Software facilitates the flow of information across functional areas, which can lead to better productivity and decision-making. Over the forecast period, product demand will rise due to a rising number of SMEs in emerging economies like Brazil, India, China, and China. These economies are expected to adopt IT technologies, which will lead to increased adoption and manual operations of ERP software.

Driving Factors:

The rapid uptake of cloud and mobile apps is helping the ERP market expand.

Business Cloud software and services will be in demand because of their low infrastructure costs and ability to connect with mobile devices. Cloud-connected mobile apps are being sought by enterprises to enable synchronization, updating, and control documents. The market trend is expected to see a rise in cloud-based ERP solutions, particularly from small and medium-sized companies. The ERP software market is experiencing a boom in cloud and mobile application adoption. The demand for ERP software from small and medium-sized businesses is rising, and these factors are contributing to the expansion of the worldwide ERP market.

Restraining Factors:

Open-source ERP software and the high implementation costs of ERP software restrain the expansion of the ERP market

Cloud-based services and solutions for enterprise resource planning (ERP) have been gradually incorporated into businesses. However, implementation costs and system complexity make it difficult for businesses to integrate these solutions with their existing systems. For successful execution, existing legacy systems and the new cloud-based ERP must be tightly linked. A few businesses continue to use out-of-date technology-based systems because of a lack of resources. They include manual procedures with a high likelihood of errors and a longer turnaround time.

COVID-19 Impact Analysis:

ERP software solutions enabled businesses to continue operating remotely

A number of lockdowns and self-quarantine laws have been implemented in response to the COVID-19 epidemic, which has caused closures, supply chain problems, and a lack of personnel availability. These elements significantly impacted a variety of commercial industries around the world, from electronics to automakers. For instance, the BBC reported in April 2021 that statewide lockdowns directly caused China’s GDP to decline by 6.8% in the first quarter of 2020. During that time, such occurrences destabilized a variety of international business sectors. However, throughout the pandemic, ERP software solutions enabled businesses to continue operating remotely, which will promote the expansion of the global ERP market in the years to come.

Type Analysis:

The on-premises segment dominates the market due to traditional business management methods.

Based on type, the market is divided into cloud and on-premises segments. This deployment model offers organizations continuous control and high data security. In many emerging countries, there is little awareness of the benefits of cloud-based business functionalities. This makes it easier to adopt on-premises solutions. Segment growth will be driven by the continued use of traditional methods to manage business models with supply chains and other business operations with business intelligence, with little automation and minimal technological use.

Due to increasing adoption, the cloud segment will dominate the market by 2032. Cloud-based ERP software deployment helps companies to achieve efficiency, speed, scalability, and accessibility, as well as immediacy and efficiency in resource planning. This cloud-based ERP software deployment offers many benefits and enterprise performance management, including faster implementation and lower initial investment. Thus, the enterprise resource planning system with cloud-based ERP solutions can be used to efficiently process large amounts of data by business owners who have access to connected devices.

Function Analysis:

Based on functional analysis, the market is dominated by the finance segment because of the increasing adoption of ERP software.

With over 26.0% market share, the finance segment held the largest share in 2022. Enterprise resource planning software is used to manage financial management segments such as investments, human capital, cash flow, asset, and assets management. The segment’s annual growth rate is expected to be boosted by the increasing adoption of ERP software in the financial function.

A significant portion of the market was accounted for by Human Resources (HR). This segment’s growth is mainly due to rapid organizational expansion, which makes it more difficult to manage company processes. The market is also expected to grow due to increased demand for automation in HR functions.

The supply chain ERP module provides better visibility into various supply chain operations and improves efficiency, speed, and customer satisfaction. This market is expected to grow due to the increasing adoption of ERP software in sales and distribution automation. The e-commerce market has enabled enterprises to choose advanced solutions to manage supply chains efficiently, which is expected to contribute to the segment’s growth.

Enterprise Size Analysis:

The large enterprise segment holds the major share due to its increasing complexity.

With 38.92% of the market share, the large enterprise segment holds the largest share. This segment is driven by the increasing complexity of large enterprises’ processes, including production planning, inventory management, and order fulfillment. Cloud-based ERP software is also possible because of the immense spending power of large enterprises in implementing new technology and software solutions.

Medium enterprises will experience significant growth and be the dominant market segment by 2030. The segment’s growth will be boosted by cloud-based ERP, improved operational efficiency, lower production costs, and timely product delivery. Stringent government regulations have encouraged many distribution industries to use ERP software. This has, in turn, increased productivity and simplified operations across multiple industries.

Industry Verticals Analysis:

The manufacturing and services segment held the largest market share.

The manufacturing and services segment held the largest market share. The ERP software monitors daily operations, manages customer management service, and tracks day-to-day performance. The software also offers many other benefits, including in-depth analysis, ease of inventory management, production scheduling, and real-time data monitoring. Manufacturers have an increasing need for visibility across the supply chain and to track vendor performance. ERP solutions can help them plan and manage their operations efficiently.

The key trend is forming partnerships between major manufacturing companies and ERP software suppliers in North America and Europe to improve their productivity. ERP software vendors will have many opportunities in this market due to the increasing use of automation and digital transformation in manufacturing industries across emerging countries in Asia Pacific. Companies can use ERP solutions to create reports that are based on real-time market data to help them make strategic decisions quickly and increase their profitability.

Key Market Segments:

Based on Deployment:

• Cloud
• On-premises

Based on Function:

• Finance
• Supply Chain
• HR
• Other Functions

Based on Enterprise Size:

• Small Enterprises
• Large Enterprises
• Medium Enterprises

Based on Industry Verticals:

• Retail
• Aerospace & Defense
• BFSI
• Manufacturing & Services
• Government
• Telecom
• Other Industry Verticals

Growth Opportunity:

Increasing use of automation and digital transformation in manufacturing industries

ERP software vendors will have many opportunities in this market due to the increasing use of automation and digital transformation in manufacturing industries across emerging countries in Asia Pacific. Companies can use ERP solutions to create reports based on real-time market data to help them make strategic decisions quickly and increase their profitability. On the other hand, the quick transition of contemporary company models is anticipated to offer lucrative chances for the advancement of the enterprise resource planning market over the forecast period.

Latest Trends:

Partnership formation between manufacturing companies and ERP software suppliers is a key trend in the market

The key trend is forming partnerships between major manufacturing companies and ERP software suppliers in North America and Europe to improve their productivity. The on-premise segment, which led the ERP market share depending on deployment strategy in 2020, is anticipated to maintain this trend throughout the forecast period because on-premise ERP solutions give businesses a much simpler way to manage their resources and business operations. However, due to modern corporate businesses’ rapid uptake of cloud computing, the cloud category is anticipated to experience the largest growth in the future years.

Regional Analysis:

North America held a dominant market share of more than 42% in 2022 due to increased investment by ERP Vendors in software developments.

North America held a dominant market share of more than 42% in 2022. This maximum market share is due to factors like the increasing adoption of the ERP software market growth in small and medium-sized business segments, increased investments by ERP vendors in software development, and many market players present. The market is expected to grow due to increasing access to ERP functions via smartphone apps.

Due to the growing manufacturing sector and small and medium business applications, the Asia Pacific market will continue to grow with transparency in business processes. Many enterprises have implemented ERP solutions on-premises to increase productivity and improve their business workflow and performance. The market is expected to grow due to the rising number of startups and the growing demand for cloud-based solutions. Over the forecast period, the ERP software market share will be more in demand due to government utility support.

Key Regions and Countries:

• North America
  • The US
  • Canada
  • Mexico
• Western Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Portugal
  • Ireland
  • Austria
  • Switzerland
  • Benelux
  • Nordic
  • Rest of Western Europe
• Eastern Europe
  • Russia
  • Poland
  • The Czech Republic
  • Greece
  • Rest of Eastern Europe
• APAC
  • China
  • Japan
  • South Korea
  • India
  • Australia & New Zealand
  • Indonesia
  • Malaysia
  • Philippines
  • Singapore
  • Thailand
  • Vietnam
  • Rest of APAC
• Latin America
  • Brazil
  • Colombia
  • Chile
  • Argentina
  • Costa Rica
  • Rest of Latin America
• Middle East & Africa
  • Algeria
  • Egypt
  • Israel
  • Kuwait
  • Nigeria
  • Saudi Arabia
  • South Africa
  • Turkey
  • United Arab Emirates
  • Rest of MEA

Market Share & Key Players Analysis:

There are many companies in the market. Market players pursue a range of growth strategies to stay competitive in this market. These include partnerships, strategic agreements, collaborations, mergers, acquisitions, and new product development.

Unit4, an ERP vendor, has partnered with Embridge Consulting in the UK to provide SaaS-based ERP tools for small and mid-sized enterprise models. Vendors were keen to anticipate the increasing demand and develop new products that integrate with the most recent technologies. The following are some of the most prominent players in global ERP software markets.

Top Key Players in the Market:

Listed below are some of the most prominent ERP Software industry players.

• Hewlett-Packard Development Company, L.P.
• International Business Machines Corporation
• Epicor Software Corporation
• IBM Corporation
• SAP SE
• Sage Group Plc
• Infor Inc/Infor CloudSuite
• Unit4
• Oracle Corporation
• NetSuite Inc.
• Microsoft Corporation
• Ramco System, Sage Group
• Kronos
• Concur (SAP)
• Totvs
• YonYou
• Kingdee
• Workday
• Cornerstone
• Digiwin
• Other Key Players

Recent Developments:

• July 2022: A cooperation between Syntellis data and Intelligence formed a partnership with a cloud-based software company.

• February 2022: SAP SE and IBM Corporation established a hybrid cloud partnership In order to move their enterprise’s resource planning to the cloud.

Report Scope:

For the ERP Software Market research study, the following years have been considered to estimate the market size: