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Enterprise Resource Planning (ERP) Software Market Size, Share & Industry Analysis, By Component (Software, Services), By Business Function (Financial Management, Human Capital Management, Supply Chain Management, Customer Management); By Enterprise Size (SMEs, Large Enterprises), By Deployment (Cloud, On-Premises, Hybrid); By End-use (Manufacturing, BFSI, Healthcare, Transportation and Logistics, Government, Others), and Region Forecast, 2019-2026

Region : Global | Published Date: Mar, 2020 | Report ID: FBI102498

 

KEY MARKET INSIGHTS

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ERP software market growth is driven by the increasing need for an affordable and effective solution among organizations to carry out business functionalities in a streamlined way to improve operational efficiency.


Further, with rising digitization, businesses are facing challenges to analyze profits and costs on a product or changing consumer behavior and continuously varying business requirements, which has further elevated the demand for enterprise resource planning software. As a part of business strategy, major players are investing in the research and development of highly efficient enterprise resource planning (ERP) software. For instance, in March 2019, Oracle extended Artificial Intelligence (AI) capabilities within Oracle Enterprise Resource Planning (ERP) Cloud and Oracle Enterprise Performance Management (EPM) Cloud. This product upgradation would help organizations in expense reporting assistant, project management digital assistant, advanced financial controls, and project-driven supply chain management.


MARKET TRENDS


Adoption of Internet of Things (IoT) to Transform ERP and Business Processes


The Internet of Things (IoT) enables collection of massive amounts of data and an ERP system needs to be flexible, intelligent, and able to provide real-time information to take advantage of produced data. By implementing ERP with IoT, businesses will be able to collect, analyze, and process a large amount of data and offer their customers new services. As an example, with connected devices, manufacturers will be able to monitor and use valuable real-time information before any damage to the product. ERP system providers offer vendor and customer portals to view, confirm, and track orders and report complaints, resulting in improved communications and operations. The relation with consumers and suppliers is growing with IoT-enabled devices that communicate directly with the ERP system.


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MARKET DRIVERS


Increasing Demand for Cloud-Based ERP Solutions to Aid Growth of the Market


Increasing demand for cloud-based enterprise resource planning (ERP) software is expected to drive the ERP software market growth. Cloud-based enterprise resource planning solutions allow enterprises to store their data on shared computing resources, helping companies to share information across divisions, unlike traditional ERP software. Organizations can upload and access data on any device with an internet connection in real-time through the cloud, which allows enhanced collaboration between departments. Key players, including Oracle and SAP, are offering enterprise resource planning (ERP) software based on a cloud platform to deliver data backup and storage recovery plans to manage primary business functions such as accounting, inventory and order management, human resources, and customer relationship management (CRM).


Cloud ERP enables businesses to reduce upfront costs for computing infrastructure such as hardware and data servers and easy installation. In addition to this, the major advantages of cloud-based enterprise resource planning (ERP) solutions include better understanding of the market, cost cuttings, strong data security, and faster implementation of business functionalities. Key players such as Infor and Sage Group plc have launched cloud enterprise resource planning solutions to help enterprises carry out their business functionalities in an easier way.


MARKET RESTRAINT


Lack of Skilled Professionals and High Costs


Enterprise resource planning (ERP) is a costly solution, and ERP deployments are highly time consuming to get completely installed and fully functional. It is hard for businesses to operate efficiently and smoothly, and therefore adequate ERP preparation, skilled professionals, and experienced workforce is essential. Insufficient training may result in employees mishandling the technology, resulting in the loss of valuable information. Besides this, computer hardware, updated network equipment, and security software are necessary to implement enterprise resource planning solutions, resulting in increased expenditure. These factors might be key restraining factors for the global enterprise resource planning (ERP) software market.


SEGMENTATION


By Component Analysis


Rising Demand for ERP Software among Enterprises to Improve Operational Efficiency


Based on component, the enterprise resource planning (ERP) software market is segmented into software and services. Among these, the software segment is expected to hold a maximum share in terms of revenue. This growth is mainly ascribed to the increased adoption of ERP software among businesses to manage all aspects of a business, such as financial management, human resources, supply chain management, and make it easier and efficient for companies to collect data. In addition to this, the penetration of Big Data technology and continuously evolving customer-centric market is expected to create enormous opportunities for key players to invest in enterprise resource planning solutions.


Further, the services segment is expected to rise with a steady CAGR during the forecast period. The growth of the services segment is owing to the rising investment and adoption of cloud-based enterprise resource planning solutions among various industries, including manufacturing, BFSI, IT & telecom, and others. In services, key players are providing consulting, implementation and integration, and support and maintenance.


By Business Function Analysis


Use of Enterprise Resource Planning Solutions to Automate Business Processes and Strengthen Financial Transactions to Drive the Market


Based on business function, the enterprise resource planning (ERP) software market is segmented into financial management, human capital management, supply chain management, customer management, inventory and work order management, and others.


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The financial management segment is anticipated to hold maximum share in terms of revenue. Financial services companies now rely entirely on new, scalable ERP systems to guarantee compliance with government data, operations, and accountability regulations. An ERP platform consisting of proper financial management enable manufacturers to gain control over  order management, shipping and receiving, and manufacturing of structural units of the company. The ERP financial management platform helps businesses to gather financial data and generate reports according to vendors’ and customers’ needs. Moreover, the financial management function in ERP provides several features to organizations such as profit tracking, ledger management, accounts payable, accounts receivable, fixed asset management, risk management, multi-currency management, and tax management.


Additionally, the customer management segment is expected to rise at a stable CAGR during the forecast period. The main focus of the enterprise resource planning (ERP) software's customer management function is to ensure that customer requirements are met on time and efficiently to ensure high standards of customer satisfaction throughout the organization and client interaction while achieving company revenue and profitability goals. Customers can place their orders online, display their order histories, search the product information available online in real-time, and view detailed pricing via the online ordering system. This feature provides consumers with login data for a back-end website that effectively serves as a restricted eCommerce platform. With customer management function in enterprise resource planning software, customers can access their accounts and place orders, saving time and providing greater control for customers.


By Enterprise Size Analysis


Large Enterprises are Implementing Enterprise Resource Planning (ERP) Software for Resource Planning and Business Expansion


Based on enterprise size, the enterprise resource planning (ERP) software market is segmented into SMEs and large enterprises. Among these, the large enterprises' segment is expected to hold the largest enterprise resource planning software market share during the forecast period. Factors such as increased operational efficiency, reduced production costs, and central collection of data for wide distribution are expected to augment the demand for ERP software among large enterprises over the forecast period. For instance, SYSPRO ERP software helps large enterprises to manage global operations and multiple subsidiaries with scalable tools.


Besides this, compliance with strict government rules has enabled ERP software to be used in several industries, allowing efficiency to be improved and minimized operational complexities.


Further, the SMEs segment is expected to rise with the highest CAGR during the forecast period. Cloud ERPs have been introduced to help SMEs simplify business processes along with cost benefits to remain competitive in the market. Also, expanding SMEs requires proper database management that is expected to boost the demand for enterprise resource planning (ERP) software  further.


By Deployment Analysis


Increased Demand for ERP Software with Enhanced Data Storage will Drive the Growth of the Market


Based on deployment, the enterprise resource planning (ERP) software market is segmented into cloud, on-premises, and hybrid.


ERP software based on cloud deployment accounted 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 for cloud ERP over the forecast period. Cloud enterprise resource planning (ERP) software enable businesses to store data over the internet and provide tools to restore data in case of any data loss or data breaches.


Further, the hybrid deployment segment of ERP is expected to rise with the highest CAGR during the forecast period, according to the ERP software market report. The key factors driving the growth of the hybrid deployment model is the increasing availability of Big Data through cloud computing, rising demand for better end-user experiences, and key players investing in hybrid enterprise resource planning (ERP) software.


By End-User Analysis


Rising Popularity of ERP Software to Increase Operational Efficiency to Drive Market Growth


Based on end-user, the enterprise resource planning (ERP) software market is segmented into manufacturing, BFSI, IT and telecommunications, retail and consumer goods, healthcare, transportation and logistics, and government, and others.


The manufacturing industry is expected to hold the largest market share in the ERP market growth. Enterprise resource planning 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. ERP for production can, therefore, improve efficiency, reduce costs, and increase sales and profits. ERP provides a solution that helps manufacturers to succeed in the global market landscape. It can produce finite and infinite planning capabilities that allow producers to build their original schedules. For distribution, sourcing, financing and consumer orders, ERP software can also turn the supply chain to achieve a production schedule by enabling manufacturing companies in the automation of process and reducing manual dependency.


The integration of enterprise resource planning solutions is changing the competitive landscape for small- and medium-sized manufacturers. Small and medium manufacturers are implementing fully integrated ERP approaches to reduce costs, boost customer service, enhance profits, and create new revenue streams. Moreover, with a highly efficient yet easily affordable ERP system, small and medium business (SMB) manufacturers can increase business outcomes. Enterprise resource planning (ERP) software are enabling manufacturers to streamline processes, improve collaboration and communication among design and manufacturing teams, and enhance agility.


Moreover, the healthcare segment is expected to rise at the highest CAGR during the forecast period. The efficient management of patient records is the first and foremost necessity of a hospital and healthcare companies. An enterprise resource planning (ERP) software has a robust database, capable of storing big, quantitative data. An integrated database can make patient records readily available for doctors and hospital staff. The implementation of ERP solutions in the healthcare industry provides vital benefits such as better patient care, cutting down operational costs, streamline medical processes, initiating better healthcare practices, and increased patient safety.


REGIONAL ANALYSIS


North America Enterprise Resource Planning (ERP) Software Market Size, 2018 (USD Billion)

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The regional segment is divided into five regions, including North America, Asia-Pacific, Europe, Middle East & Africa, and Latin America.


Among all the regions, North America is expected to lead the ERP software market share. The growth in the North America ERP market is mainly owing to the presence of crucial ERP vendors such as Oracle, Microsoft, Infor, and Epicor in the region. North America has higher adoption of advanced technologies such as cloud computing, IoT, Big Data, and business intelligence, which will further contribute to the regional market growth. In addition to this, higher adoption of ERP solutions among industry verticals is fueling the North America enterprise resource planning (ERP) software market growth.


Rising need to automate business functions through digital methods is boosting the ERP growth in North America. Organizations in US and Canada are implementing enterprise resource planning (ERP) solutions to streamline business processes and upgrade their internal business efficiency. For instance, Loblaw Companies Limited, Canada's food and pharmacy leader, is implementing SAP ERP solutions to optimize business functionalities. In addition to this, key players in the region are investing in research and development activities to develop new enterprise resource planning solutions. For example, in December 2017, SYSPRO, a global provider of industry-built ERP software, partnered with the Quebec company Shift Group to strengthen its position in Eastern Canada.


Asia-Pacific is expected to grow with a remarkable CAGR during the forecast period. The growth in this region is mainly owing to the continually evolving industry verticals including manufacturing, BFSI, and transportation and logistics. To cater to the rising demand for sustainable enterprise resource planning solutions among these verticals, several key vendors in the region are focusing on developing and introducing advanced ERP solutions. A large number of small- and medium-sized businesses in the region are implementing cloud-based enterprise resource planning (ERP) software to improve productivity and reduce business complexity. Besides this, government regulations to support IT infrastructure is further expected to augment the enterprise resource planning (ERP) software market growth in the region.


KEY INDUSTRY PLAYERS


Market Leaders such as SYSPRO and Infor to Focus on Launching of Innovative ERP Solutions


SYSPRO, a software development company, provides integrated solutions and ERP software, including accounting, manufacturing, and distribution operations across various industry verticals. Major operating segments of the company are Enterprise Resource Planning (ERP), Business Process Modeling (BPM), Workflow Management Solutions, Software-as-a-Service (SaaS), and Service-oriented Architecture (SOA).


October 2019 - SYSPRO, a global provider of industry-built ERP software, partnered with the Clean Energy Smart Manufacturing Innovation Institute (CESMII) to help US manufacturing companies to adopt smart manufacturing technologies. Under this partnership, CESMII and SYSPRO will bring awareness about CESMII Smart Manufacturing (SM) Platform to help manufacturers to stay competitive in the manufacturing market.


List of Key Companies Profiled:



  • SYSPRO (South Africa)

  • Oracle Corporation (United States)

  • SAP SE (Germany)

  • Unit4 (Netherlands)

  • Sage Group plc (United Kingdom)

  • Epicor Software Corporation (United States)

  • QAD, Inc. (United States)

  • Acumatica, Inc. (United States)

  • Rootstock Software (United States)

  • PLEX SYSTEMS (United States)


KEY INDUSTRY DEVELOPMENTS:



  • November 2019 Plex Systems launched Plex Manufacturing Execution Suite (Plex MES), a cloud-based suite to help manufacturers improve quality standards and optimize processes with manufacturing operations management (MOM).


FUTURE OUTLOOK


The potential market for ERP is moving towards building a perfect trail that helps businesses adopt advanced technologies and improve profitability and customer experience. Further, key ERP software market players in the ERP market are focused on developing ERP solutions based on cloud service and IoT technology. Also, rising internet penetration, increased business automation, and increased market competition are expected to be rising opportunities for market growth during the forecast period.


REPORT COVERAGE


The enterprise resource planning software market report offers qualitative and quantitative insights on the ERP industry and detailed analysis of market size & growth rate for all possible segments in the market.


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

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Along with this, the report provides an elaborative study of market dynamics, emerging trends, opportunities, and competitive landscape. Key insights offered in the report are the adoption trends of enterprise resource planning (ERP), recent industry developments such as partnerships, mergers & acquisitions, consolidated SWOT analysis of key players, business strategies of leading market players, macro and micro-economic indicators, and key industry trends.


Report Scope & SegmentationTable

















































SEGMENTATION



DETAILS



Study Period



  2015 - 2026



Base Year



  2018



Forecast Period



  2019 - 2026



Historical Period



  2015 - 2017



Unit



  Value (USD billion)



Segmentation



By Component



  • Software

  • Services

    • Consulting

    • Implementation and Integration

    • Support and Maintenance





By Business Function



  • Financial Management

  • Human Capital Management

  • Supply Chain Management

  • Customer Management

  • Inventory and Work Order Management

  • Others



By Enterprise Size



  • SMEs

  • Large Enterprises



By Deployment



  • Cloud

  • On-Premises

  • Hybrid



By End-User



  • Manufacturing

  • BFSI

  • IT and Telecommunications

  • Retail and Consumer Goods

  • Healthcare

  • Transportation and Logistics

  • Government

  • Others



By Region



  • North America (U.S. and Canada)

  • Europe (U.K., Germany, France, Spain, Italy, the Netherlands, and Rest of Europe)

  • Asia-Pacific (Japan, China, India, Southeast Asia, and Rest of Asia- Pacific)

  • Middle East & Africa (South Africa, GCC, and Rest of Middle East & Africa)

  • Latin America (Brazil, Mexico, and Rest of Latin America)



Frequently Asked Questions

Fortune Business Insights says that the market value stood at USD 38.15 billion in 2018.

By 2026, the market is expected to be valued at USD 71.63 billion.

Stable growth at 8.5% CAGR is expected for the market in the forecast period (2029-2026).

North America is anticipated to be the dominating region in this market and its value stood at USD 14.36 billion in 2018.

Within the end-use segment, manufacturing is expected to be the leading segment in the market during the forecast period.

Increasing demand for cloud-based ERP solutions is one of the key drivers for market growth.

SYSPRO, Oracle Corporation, SAP SE, and Unit4 are some of the key providers in the ERP market as they offer a wide range of ERP solutions.

The customer management segment is expected to grow significantly at the highest CAGR owing to high efficiency and easy implementation.

Enterprise Resource Planning (ERP) Software Market Size, Share and Global Industry Trend Forecast till 2026
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