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57 Key ERP Statistics 2020: Analysis of Trends, Data and Market Share

Category: Research

Enterprise resource planning (ERP) is no longer the exclusive domain of multinational corporations. Almost all modern businesses now need a robust system to manage various assets. It is difficult to monitor products and other resources without efficient tools. As your business grows, you’ll need a better way to track these. Also, you need a way to streamline your operations as your organization expands. ERP platforms answer that specific need.

But, even with more cheap cloud-based set-ups, ERP software can be quite expensive. As such, considering one should be treated as a long-term investment. Of course, you should ensure that there is a significant ROI once you subscribe to ERP services. What are the real benefits of ERP? What are the current market data? Are there any potential challenges?

In this article, we will answer these questions. We have gathered all the current and relevant ERP statistics and trends. They will show you how other businesses benefit from such solutions. Furthermore, we’ve also thrown in a quick list of the most popular ERP software in the market.

Key erp statistics

Current ERP Market Statistics

Originally intended as a solution for manufacturing operations, ERP systems have since expanded to serve a wide array of industries and businesses. As such, the global ERP market has continuously grown in the last few years. More enterprises are beginning to consider the benefits of having such a solution in place. Even small- and mid-level businesses are appreciating the versatility of ERP systems.

  • Between 2017 and 2022, the global ERP system market is expected to enjoy up to $47 billion in revenue at a CAGR of 7%. [1]
  • The annual cumulative growth rate of around 10%-20% equates to over $25 billion for the ERP software market. [2]
  • Around 53% of businesses consider ERP, along with CRM, to be priority investments. [3]
  • With a CAGR of 7.9% from 2014 to 2020, ERP solutions targeting mid-sized enterprises are expected to grow as well. [4]
  • The Asia-Pacific region is an emerging market for ERP applications, which is expected to grow to $9.77 billion by the end of 2020. [4]
  • On-premise ERP solutions are expected to take about 57% of the market by 2020. However, cloud-based ERP applications are beginning to see greater investments each year. [5]
  • Among the highest adoption of ERP solutions are in the aerospace and defense industries, with a growth rate of 8.86% from 2014 to 2020. [4]
  • Around 29% of business respondents are worried about a security breach when adopting an ERP solution. Moreover, this is followed by a lack of information about cloud solutions at 16% and potential data loss at 9%. [6]

Source: Statista

ERP Implementation and Application Statistics

Just like any business solution, implementing an ERP system takes considerable technical skills, preparation, onboarding, and training. So, one should expect to face challenges as you adapt to a different workflow. Consequently, you have to balance the possible risks and potential benefits of adopting ERP software in your operations. To help you, we listed some industry trends and how ERP affects various businesses.

Reasons to implement ERP

  • The top reason why companies implement ERP is so they can enhance their current business performance (64%). Consequently, to put the company in a better position for growth (57%) follows. Also, around 57% want to significantly reduce their current working capital. [7]
  • Also, manufacturers look for three core qualities when implementing ERP applications: the overall cost of ownership (43%), functionality and features (46%), and ease-of-use (50%). [8]
  • ERP has helped around 95% of companies to improve their overall processes. [7]
  • Businesses that already adopted an ERP system reported that they were able to reduce process times, implement a centralized company-wide data, and enhance overall collaboration. [7]
  • Besides, around 95% of companies have experienced significant improvements in their workflow after adopting ERP software. [7]
  • ERP service providers say that customer satisfaction has increased to 68%. With 96% of consumers saying customer support is significant, you need to have tools to help you provide top quality services. [7]
  • Enterprises that are still not taking advantage of ERP solutions suffer from the following: no real-time process tracking (28%), unaligned business solutions (33%), and redundant data (35%). [10]
  • Businesses that spent more than their allotted budget for ERP (31%) reported that they are satisfied with the results of their implementation. [7]

ERP deployment preferences

  • A majority of CIOs in the UK already prefer private cloud deployment (51%) of their ERP systems. Others still prefer on-premise implementation (35%), and some want hybrid solutions (10%). [9]
  • About 61% of CIOs in the United Kingdom already store more than half of their ERP data on the cloud. However, a measly 6% will consider fully using cloud-based technology within the next three to five years. [7]
  • Lastly, only 4% of companies with ERP systems in the UK are fully running on the cloud. However, 47% of on-premise platforms use APIs to extend their functionalities to the cloud. [9]

ERP implementation concerns

  • More than half of respondents, about 66%, experienced some form of disruption in their operations during the implementation of their ERP systems. [7]
  • In addition, one of the leading issues in 2017 is fraudulent payment activities, with as many as 75% of businesses experiencing such threats. As a result, CFOs want to control overpayments by implementing ERP software. [11]

Source: Accenture

ERP Adoption in Small Business Statistics

In the past, only large corporations considered using ERP systems as these can be very expensive. However, with the rise of cloud technology and SaaS, these solutions have become much more affordable. Some service providers offer products specifically for growing operations such as these 12 best ERP software for small businesses. Here are some notable trends in implementing ERP in SMB markets:

  • 65% of small businesses are taking advantage of ERP consultation services. [12]
  • SMB’s are estimated to contribute a CAGR of 7.9% between 2014 to 2020 to the ERP market as a whole. Most of these are due to the benefits that ERP applications offer, such as reducing operating costs and inventory waste. [5]
  • After business management and marketing solutions, ERP systems are the most in-demand application for small businesses. [13]
  • 96% of emerging businesses that excel in their respective industry rely on some form of ERP solution. [14]
  • Small businesses with ERP systems can make decisions with 36% less time than they did without the solution. [14]
  • Small- and medium-sized enterprises have been investing around $889,000 in ERP solutions. [15]
  • SMBs choose ERP systems over standalone platforms because (1) it helps standardize back-office operations by 77%; (2) minimizes overall operation expenses by 11%; and (3) provides real-time visibility into various data and insights by 48%. [14]
  • Small businesses that negotiated with ERP service providers saved an average of 21%. [12]
  • Respondents from the SMB market noted that it takes about 11 months to fully realize the benefits of ERP. [12]
  • Growing enterprises prefer ERP over individual solutions because of the need for a better collaboration tool (37%), scalable solution (29%), and replace old technology (24%). [14]

Negotiating with ERP service providers

Cloud Technology and ERP Statistics

The innovations in cloud technology have been disrupting various industries, and the ERP market is experiencing the same. As cloud-based applications catch up to the power of their on-premise siblings, more businesses are taking notice. Aside from being relatively more affordable, these solutions also minimize the installation and set-up, simplifies IT infrastructures, and centralize all business professing data.

  • An on-premise solution is generally more expensive by about 30% than cloud technology. [16]
  • Around 73% of companies are already running at least one software in the cloud, with another 17% of them set to do the same in 2019. [15]
  • Of those using multi-cloud, 59% report that this strategy has increased their options. [15]
    38% of company leaders report that their IT experts are feeling the pressure to move to the cloud. [15]
  • Companies expect to invest about $3.5 million on cloud platforms and similar services this year. [15]
  • Around 22% of businesses with existing on-premise ERP are looking for IaaS or managed hosting. [9]
  • Multi-cloud is already used by 42% of companies. [15]
  • Disaster recovery is much fast and easier with multi-cloud, says 40% of businesses. [15]
    Businesses now allot 30% of their IT budgets into cloud solutions with PaaS (21%), IaaS (30%), and SaaS (48%) among the top expenditures.[15]

Most Popular ERP Software

There are thousands of ERP solutions available for small businesses and big corporations alike. That said, it’s more challenging to find the ERP software that fits your needs. To simplify your search, here are some currently leading the market:

  1. NetSuite ERPA cloud-based solution that aims to grow with your business. Aside from the core inventory management functionalities, it automates various processes, such as fixed assets, order management, financial management, and more. It provides a system for the entire company from the executives down to the clerical staff. 
  2. OdooAn open-source ERP and CRM solution that allows you to manage your entire operation without ever needing another application. Perfect for growing companies, this highly extensible platform lets you manage various parts of your business, from finance and human resources to operations and customer management.
  3. Sage IntacctA popular cloud business solution that streamlines your entire operation to maximize your revenue and minimize your expenses. It includes core ERP features along with powerful financial management functionalities. You can manage cash flows, accounts payables and receivables, budget, orders, and more. 
  4. SYSPROA fully-featured ERP platform specifically developed for the manufacturing industry. It allows you to integrate, control, monitor, and synchronize various manufacturing and operating processes using warehouse automation, employee communication, device integration, and API services. You can optimize your entire workflow using just one system.
  5. Oracle ERP CloudA platform that aims to provide end-to-end business solutions to companies of various sizes. Designed to connect data across your entire organization, it comes with various features, such as procurement, financial management, risk management, project management, and much more.

New Technologies in ERP

ERP systems were initially developed to solve the issues in manufacturing operations. Eventually, it began providing solutions to various other industries. However, significant changes in business processes come far in between. The core functionalities of ERP systems have not significantly changed in the past years. But features that implement these functionalities have been changing.

  • The Internet of Things (IoT), artificial intelligence, and machine learning (ML) have been disrupting the ERP industry in the past years. [17]
  • Consequently, around 40% of leaders in various industries are already exploring innovative technologies for ERP applications. They are looking into IoT (40%), ML (40%), and AI (43%). [17]
  • Besides, around 58% of developers have already integrated or are planning to integrate AI into their ERP software. [18]
  • In addition, the majority of developers (80%) believe that many ERP processes can be completely replaced by machine learning or AI. [18]
  • According to businesses (33%), custom APIs are necessary to transform and extract ERP data. [9]
  • 72% of business leaders see AI at the enterprise-level offer significant advantages for the future. [19]
  • On the other hand, intelligent technology was only a part of 4% of ERP solutions. [9]
  • Around 49% of employees have a lack of trust in technology. Consequently, this is one of the biggest hurdles to adopting AI in business operations. [20]
  • In the UK, 53% of CIOs intend to extend their ERP applications with innovative, intelligent technologies. [9]

AI will replace ERP processes

Current and Potential Challenges in Using ERP Systems

Just like any platform, ERP applications are not without its issues and challenges. From installation to scalability issues, here are some of the potential problems that you might encounter while using an ERP solution.

  • Organizational challenges are the main reasons for ERP projects missing the deadlines. [7]
  • Similarly, half of ERP implementations fail at first try. [21]
  • So, ERP implementations have increased from an average of 16.9 months to 17.4 months. [7]
  • A majority of ERP projects (74%) take longer than the intended deadlines. [7]
  • Moreover, 64% of ERP projects will spend more than the allotted budget. It also reflects the fact that 27% of projects are over budget. [7]
  • As a result, testing and other related processes can shoot up ERP projects’ budget to 50% more than what was allotted. [2]
  • 51% of users needed to manually extract their data from their ERP systems. Additionally, 33% of ERP customers needed APIs to do the same. As such, significant technical knowledge is required for data extraction in ERP platforms. [9]
  • Lastly, it is difficult for organizations to achieve a unified data view as a large number of ERP platforms (92%) need manual intervention to enable data sharing. [9]

ERP projects going over budget

Why Do You Need an ERP System?

Asset management is essential to any type of business. Challenges and issues are to be expected, especially during implementation. But, the benefits far outweigh the potential problems. Here are a few:

Better Inventory Monitoring

Keeping track of all company assets is challenging for any business. ERP systems use RFID, serial numbers, or barcodes. These unique identifiers allow you to check your inventory in your supply operations. You can determine which products are in your warehouse. Also, you can track which ones are in transit. It is also easy to see your current shelf supplies.

ERP applications cut product loss by increasing the visibility of your inventory. You know how fast your products are moving through your entire operations. As such, you can make the necessary adjustments to improve its efficiency.

Enhanced Productivity

As with any business, tedious and repetitive tasks are unavoidable. That is why it takes hours to track inventory, write reports, process orders, and more. Furthermore, you will also have to allot time to check the quality of such tasks.

With the right ERP application, these steps in your workflow can be automated. ERP platforms often include a centralized database. Hence, it eliminates redundant data entry. Also, it can calculate data in seconds to generate reports in minutes. Such a solution will improve your productivity and efficiency.

Detailed Analytics and Insights

The centralized database makes it easy to analyze your workflow. Also, it automates your entire reporting process. Without such a platform in place, it will take days of data entry and research to create such reports.

Using ERP software, you can generate insights in a couple of clicks. Also, most solutions include dashboards that you can customize. As a result, you can see real-time data, which is essential if you want to track your entire operation.

Saving Money on Various Solutions

Even with flexible pricing, ERP systems can still be expensive. That is why subscribing to one is a huge investment for your company. But, modern solutions unify many systems that are otherwise fragmented. Most ERP software already include functionalities, such as accounts payable and CRM.

As such, you get to save a significant amount of your budget by having one platform from which to run your operations. Additionally, the onboarding process is much shorter. And, you only have to train your staff on using one software. Hence, it saves you time and money.

Increased Collaboration

ERP software usually provides some level of collaboration. Having a unified database allows your entire team to have one source of truth. As a result, you can cut miscommunication and reduce any human error. By improving collaboration, you can increase productivity by 20% to 30% through these online tools.

Additionally, all team members have access to information at any given time. So, this ensures that everyone is on that same page. Without having to merge information from different sources, you are also saving a lot of time.

What Do These ERP Statistics Mean for Your Enterprise?

The trends above show the evolution of ERP platforms. From being simple business software, they have become full-scale business solutions. Likewise, it shows that you can now run an entire company without using disjointed platforms.
 
Also, the data shows cloud technology’s impact on current ERP applications. It is now more accessible to SMBs compared to on-premise versions. Moreover, these platforms are far more scalable than their past iterations. As such, they grow along with your business.
 
Similarly, the ERP market is being disrupted by artificial intelligence and IoT. They allow ERP to become complete business software.
 
Even with potential challenges, an ERP system provides long-term benefits for your operation. While it can be expensive, it enables your business to generate revenue much faster.

References:

  1. ^ERP Software Market 2018 Global Trends, Statistics, Size, Share, Regional Analysis by Key Players
  2. ^The Beginner’s Guide To ERP Testing
  3. ^IT Priorities 2018: Where senior IT managers plan to spend their budget
  4. ^ERP Software Market Expected to Reach $78.40 billion by 2026
  5. ^ERP Software Market Outlook-2026
  6. ^2017 Report on ERP Systems & Enterprise Software
  7. ^2018 ERP Report
  8. ^What Do Manufacturers Look for in an ERP Solution?
  9. ^2019 ERP Trends
  10. ^The Cost of Doing Nothing: Why You Can’t Afford to Sit on an ERP Software Decision
  11. ^6 ERP trends for 2018
  12. ^2019 ERP Report
  13. ^The State of SMB Software: 2018 Report
  14. ^Simplify Life at Work
  15. ^2018 Cloud Computing Survey
  16. ^The Case for Cloud-Based ERP
  17. ^ERP cloud top trends in 2018
  18. ^ERP Tops Targets for AI Developers in Large Enterprises
  19. ^2018 AI predictions: 8 insights to shape business strategy
  20. ^The Enterprise AI Promise: Path to Value
  21. ^ERP Stats & Facts: ERP Success & Failure Rate
Jenny Chang

By Jenny Chang

Senior writer at FinancesOnline who writes about a wide range of SaaS and B2B products, including trends and issues on e-commerce, accounting and customer service software. She’s also covered a wide range of topics in business, science, and technology for websites in the U.S., Australia and Singapore, keeping tabs on edge tech like 3D printed health monitoring tattoos and SpaceX’s exploration plans.

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