Enterprise Resource Planning (ERP) Software Market Size, Share & COVID-19 Impact Analysis, By Enterprise Type (Small & Medium Enterprises (SMEs) and Large Enterprises), By Deployment (Cloud, On-premise, and Hybrid), By Business Function (Financial Management, Human Capital Management, Supply Chain Management, Customer Management and Others), By End-user (Manufacturing, BFSI, IT & Telecom, Retail & Consumer Goods, Healthcare & Life Sciences, Transportation & Logistics, Government, and Others), and Regional Forecasts, 2023-2030

The global Enterprise Resource Planning (ERP) software market size was valued at USD 44.47 billion in 2022. The market is projected to grow from USD 46.86 billion in 2023 to USD 71.34 billion by 2030, exhibiting a CAGR of 6.2% during the forecast period.

In the scope, we have considered Enterprise Resource Planning software provided by key players such as Oracle Corporation, IBM Corporation, SAP SE, Workday, Inc., and Microsoft Corporation.

Enterprise resource planning software studies the unstructured and structured database to visualize and provide insights based on correlation, hidden patterns, the market’s changing trends, and more. For instance, in July 2022, IFS introduced IFS Assist 11.5, an automated cloud solution, to aid companies in configuration management databases and provide overall control of IT infrastructure.             

COVID-19 IMPACT

Rising Adoption of Digital Transformation Strategies amid COVID-19 Pandemic to Strengthen Market Growth

Several small & medium-scale organizations have implemented digital strategies to automate their business processes. For instance, in the second quarter of 2020, MacKay & Sposito, a civil engineering firm, faced difficulties in measuring the projects and its business operations. Hence, the company implemented an ERP software system that increased its cash flows and profitability by managing several operations, including its finance, projects, and material management.

In addition, the increasing digitalization of businesses and rising government favorable policies for digital technology software implementation have propelled market growth. For instance, according to the IDC report for 2020, the global digital transformation investment reached USD 1.5 trillion owing to a surge in investments by SMEs and large-scale organizations.

Such an increase in the adoption of digital technology platforms and government initiatives for digitalization amid the COVID-19 pandemic has slightly increased the demand for Enterprise Resource Planning software solutions.

LATEST TRENDS

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Rising Adoption of Advanced Technologies such as Artificial Intelligence (AI), Machine Learning, and Cloud Computing to be a Key Trend Setter for the Market

The rising adoption of AI-based and cloud-based Enterprise Resource Planning software and the surge in investments by the leading players to adopt these technologies for automating business processes will boost market growth. For instance, according to the Accenture report, in 2020, around 63.0% of enterprises are adopting cognitive technologies, such as AI, blockchain, and cloud-based solutions, to automate their businesses.

Major players in the market invest in advanced software technologies such as AI, cloud computing, machine learning, and others. For instance, in October 2021, Focus Softnet, an enterprise applications and software development provider, launched the next-generation Focus X ERP solution. This solution is available on mobile and laptops devices for enterprises. Focus X is built with artificial intelligence and machine learning-driven applications for businesses' predictive analysis and forecasting.

The above factors are considered some of the ERP software market trends.

DRIVING FACTORS

Growing Need to Improve Operational Efficiency and Streamline Business Processes among Enterprises to Drive Growth

The need for transparency and operational efficiency in business processes has forced companies operating globally to adopt various business models. Advancements in technology minimize the complexity of Enterprise Resource Planning software systems and allow third-party apps to maintain corporate processes more efficiently. According to the 22^nd Annual Global CEO Survey conducted by PwC, 80% of all CEOs believe that product commercialization will significantly influence their organizations and business models in the following years.

Worldwide, companies are focused on enhancing their business processes to increase operational productivity while keeping track of running costs. Organizations are looking for an integrated solution to handle various business operations, including sales and marketing, procurement, and supply chain management. The integration of ERP software has made business operations simplified and more efficient. Manual data entry is no longer necessary, allowing companies to see all the data on a single, uniform platform. This cloud-based software may make complex procedures, such as a multi-step production plan, easy and painless.

RESTRAINING FACTORS

Integration Issues with On-premises Deployment Models to Limit ERP Adoption

Organizations have progressively started to integrate cloud enterprise resource planning solutions and services. However, companies still face substantial problems integrating these solutions with their existing systems due to implementation costs and system complexity. Existing legacy systems must be strongly linked with the new cloud-based ERP to be executed successfully. Due to lack of resources, a few companies continue to depend on their present systems, which are based on outdated technology. They include manual procedures that result in a longer turnaround time and a high possibility of mistakes.

SEGMENTATION

By Enterprise Type Analysis

Large Enterprises are Implementing ERP Solutions for Resource Planning and Business Expansion 

Based on enterprise type, the market is segmented into Small & Medium Size Enterprise (SME) and large enterprises.

The large enterprises segment captured the maximum market share. Factors such as increased operational efficiency, reduced production costs, and the central collection of data for wide distribution are expected to augment the demand for the product among large enterprises over the forecast period. For instance, SYSPRO software helps large enterprises to manage global operations and multiple subsidiaries with scalable tools. Besides this, compliance with strict government rules has prompted product adoption in several industries, improving efficiency and minimizing operational complexities.

Further, the SME segment is expected to rise with the highest CAGR during the forecast period. Cloud ERPs are introduced to help SMEs to simplify business processes along with cost benefits to remain competitive in the market. Also, expanding SMEs require proper database management, which is expected to surge in demand.

By Deployment Analysis

Increased Demand for ERP Software with Enhanced Data Storage Will Drive Market Growth

Based on deployment, the market is segmented into cloud, on-premise, and hybrid.

The cloud segment will account for the largest market share during the forecast period. Low infrastructure costs and the ability to integrate with mobile and tablet devices are projected to increase the market share of the cloud segment over the forecast period. Cloud solutions enable businesses to store data over the internet and provide tools to restore data in the event of any data loss or breach.

Further, the hybrid segment is expected to rise with the highest CAGR during the forecast period. The key factors driving the growth of the hybrid deployment model are increasing availability of Big Data through cloud computing, rising demand for better end-user experiences, and significant players investing in hybrid ERP solutions.

By Business Function Analysis

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Use of ERP Solutions to Automate Business Processes and Strengthen Financial Transactions to Drive Market Forward 

Based on business function, the market is segmented into financial management, human capital management, supply chain management, customer management, Inventory & work order management, and others.

The financial management segment captured maximum market share and is expected to maintain its dominance over the forecast period. The segment focuses on financial management features offered in the software. For instance, financial management features from SAP SE’s suite offer streamlined financial processes, planning, budgeting, and forecasting capabilities, among others. Financial services companies now rely entirely on new, scalable systems to guarantee compliance with government data, operations, and accountability regulations.

The inventory & work order management segment is expected to grow at the highest CAGR over the forecast period. The growth is mainly attributed to the increasing demand for enterprise resource planning tools to prioritize and coordinate work orders accurately and efficiently. Companies can manage the process of identifying and executing scheduled and urgent maintenance activities throughout an organization using an interactive work order management function from an ERP application.

By End-user Analysis

Rising Popularity of ERP Technology to Increase Operational Efficiency to Augment Market Share 

Based on end-user, the market is segmented into manufacturing, BFSI, IT & telecom, retail & consumer goods, healthcare & life sciences, transportation & logistics, government, and others (aerospace & defense).

The healthcare segment is expected to rise at the highest CAGR during the forecast period and contribute the most to the global Enterprise Resource Planning software market share. The efficient management of patient records is the first and foremost necessity of hospitals and healthcare companies, which is expected to boost the demand for software in the industry.

Moreover, the manufacturing segment controlled a sizable portion of the global market. These solutions for manufacturing companies aim to use advanced features and functionality to optimize all facets of the manufacturing process, from sourcing and acquisition to development, storage, quality testing, and distribution. Therefore, such a solution for production can improve efficiency, reduce costs, and increase sales and profits.

REGIONAL INSIGHTS 

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Geographically, the market is segmented across five major regions, North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America.

North America captured the largest market share due to the rising need to automate business functionalities through digital methods, boosting the North America Enterprise Resource Planning software market growth. In addition, key regional players are investing in research and development activities to develop enhanced ERP solutions.

Asia Pacific is expected to grow with a remarkable CAGR during the forecast period. This region's growth is mainly due to continually evolving industry verticals, including manufacturing, BFSI, and transportation & logistics.

The market growth in Europe is mainly driven by rising technological advancements and development of the regional manufacturing companies. According to the European Commission, in 2019, 30% of small businesses and 80% of large companies implemented enterprise resource planning tools.

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Due to various factors such as the penetration of new industries and the development of the economy in the Middle East & Africa and Latin America led the ERP software market share in 2021. Furthermore, due to the low cost of deployment and maintenance, firms in this region are migrating from on-premise to cloud-based software.

KEY INDUSTRY PLAYERS

Strategic Acquisition to Boost Market Expansion of Key Players

The key players are offering ERP software across all business segments. Major market players extend the scope to create novel solutions, upgrade their tools and technology, and strengthen their technological capabilities. Also, through collaborations, companies are gaining expertise and expanding their business by reaching a larger customer base. The key players focus on market share expansion and customer reach through strategic acquisitions.

LIST OF KEY COMPANIES PROFILED:

• Oracle Corporation (U.S.)


• IBM Corporation (U.S.)


• SAP SE (Germany)


• Workday, Inc. (U.S.)


• Microsoft Corporation (U.S.)


• Sage Group plc (U.K.)


• Infor (U.S.)


• Deltek (U.S.)


• Acumatica, Inc. (U.S.)


• Epicor (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• July 2022: Infor collaborated with Syntellis, a supplier of enterprise resource solutions, to assist healthcare consumers in accessing Syntellis Axiom Healthcare Suite. This suite offers EPM tools with data-driven insights for enhancing the company’s operations.


• February 2022: SAP SE and IBM Corporation partnered to shift their enterprise resource planning (ERP) to the cloud. With this partnership, IBM offered SAP consumers SAP S/4HANA on the IBM cloud. SAP S/4HANA is an ERP solution for many organizations.


• November 2021: Oracle Corporation declared to aid Honda Motor in improving its procurement operations with Oracle Fusion Cloud ERP, in Japan. Four thousand suppliers and 25,000 employees utilize the Oracle Fusion cloud procurement platform.


• October 2021: Microsoft Corporation purchased Clear Software Business Process Solutions to enhance ERP software for automating business workflows.


• January 2021: SAP SE purchased Signavio GmbH, a process management and business intelligence provider. This acquisition of Signavio by SAP business process intelligence unit aids in improving and transforming the organization's business processes at scale.

REPORT COVERAGE

An Infographic Representation of Enterprise Resource Planning (ERP) Software Market

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The research report includes prominent areas across the globe to get a better knowledge of the market. Furthermore, it provides insights into the most recent industry and market trends, as well as an analysis of technologies that are being adopted quickly on a global scale. It also emphasizes some of the restrictions, allowing the reader to obtain a thorough understanding of the market.

REPORT SCOPE & SEGMENTATION