Enterprise Resource Planning (ERP) Software Market Size, Share & COVID-19 Impact Analysis, By Deployment (Cloud, On-premise, Hybrid), By Business Function (Financial Management, HCM, SCM, Customer Management, Inventory, & Work Order Management, Others), By Organization Size (SME's, Large Enterprise), By End-user (Manufacturing, BFSI, IT and Telecom, Retail and Consumer Goods, Healthcare & Life Sciences, Transportation & Logistics, Government, (Aerospace and Defense)), & Regional Forecast, 2022-2029

The global Enterprise Resource Planning (ERP) software market size was valued at USD 45.82 billion in 2021. The market is projected to grow from USD 49.28 billion in 2022 to USD 90.63 billion by 2029, exhibiting a CAGR of 9.1% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with Enterprise Resource Planning software experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a moderate growth of 6.2% in 2020 as compared to 2019.

In the scope, we have considered ERP 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, a global cloud enterprise software firm, launched IFS assist 11.5 automated cloud software solution. This automated cloud solution helped organizations better manage configuration management databases and offer complete control of IT infrastructure.

COVID-19 IMPACT

Rising Adoption of Digital Transformation Strategies amid COVID-19 Pandemic has Strengthened Market Growth

Several small and 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 while measuring the projects and its business operations. Hence, the company implemented an ERP software system that has increased its cash flows and profitability by managing several operations, including its finance, projects, and material management.

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

These ERP tools have streamlined the business processes and automated core business operations that helped the organization to run business with fewer employees amid the pandemic. Several ERP software providers, such as SAP SE and Oracle Corporations, have dedicated their ERP systems for various industries to perform various business operations such as warehouse management systems, HR, product life cycle management, logistics management, payroll, and others.

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 ERP software solutions. The global market size increased by 0.7% during the COVID-19 pandemic.

LATEST TRENDS

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Rising Adoption of Advanced Technologies such as Artificial Intelligence, Machine Learning, and Cloud Computing is a Key Trend Setter for the Market

The rising adoption of the AI-based and cloud computing-based ERP software and the surge in investments by the leading players to adopt these technologies for automating the business processes aid the 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 computing-based ERP solutions to automate the business.

Also, as per the above-stated organizations, in the U.K., 53% of the chief information officers of large-scale enterprises intended to expand their ERP software applications with advanced innovative, intelligent technologies such as AI, cloud computing, and data analytics.

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 ERP solution is available on mobile and laptops 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 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 22nd 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. 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 in a single uniform platform. This cloud-based software may make complex procedures, such as a multi-step production plan, easy and painless. Key players operating in the market are taking strategic initiatives to expand their portfolios. For instance, in March 2021, Acumatica, Inc. launched Acumatica 2021 R1, a cloud-based suite that offers best-in-class functionality and a powerful user experience. Such initiatives by key players are expected to contribute to the growth of the market.

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 new cloud-based ERP to be executed successfully. Due to lack of resources, a few companies continue to depend on their present systems based on outmoded technology. They include manual procedures that result in a longer turnaround time and high possibility of mistakes.

SEGMENTATION

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 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 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 case of any data loss or breaches.

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 key players investing in hybrid ERP solutions.

By Organization Size Analysis

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

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

The large enterprise segment captured the maximum market share. Factors such as increased operational efficiency, reduced production costs, and 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 that is expected to surge the demand.

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 and 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. Moreover, the financial management function 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.

The inventory and 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 ERP 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 & telecommunication, retail and consumer goods, healthcare & life sciences, transportation & logistics, government, and others (aerospace and defense).

The healthcare segment is expected to rise at the highest CAGR during the forecast period and contribute the highest to the global Enterprise Resource Planning (ERP) software market share. The efficient management of patient records is the first and foremost necessity of hospitals and healthcare companies. An ERP has a robust database capable of storing big quantitative data. An integrated database can make patient records readily available for doctors and hospital staff. Implementing these solutions in the healthcare industry provides vital benefits such as better patient care, cutting operational costs, streamlining medical processes, initiating better healthcare practices, and increased patient safety.

Moreover, the manufacturing industry held a significant market share in the global market. ERP 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, ERP for production can improve efficiency, reduce costs, and increase sales and profits. It 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. It can also turn the supply chain into a production schedule for distribution, sourcing, financing, and consumer orders.

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 American Enterprise Resource Planning (ERP) software market growth. Organizations in the U.S. and Canada are implementing ERP solutions to streamline business processes and upgrade their internal business efficiency. For instance, Loblaw Companies Limited, Canada's food and pharmacy leader, implements SAP solutions to optimize business functionalities. In addition, key regional players are investing in research and development activities to develop new solutions. For example, in December 2017, SYSPRO, a global provider of industry-built software, partnered with Quebec-based company Shift Group to strengthen its position in Eastern Canada.

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. Several key regional vendors are focusing on developing and introducing advanced ERP solutions to cater to the rising demand for sustainable ERP solutions among these verticals. Many small and medium-sized businesses in the region are implementing cloud-based solutions to improve productivity and reduce business complexity. Besides this, government regulation to support IT infrastructure is further expected to augment the market growth in the region.

The market growth in Europe is mainly driven by rising technological advancements and the development of the regional manufacturing company. According to the European Commission, in 2019, 30% of small businesses and 80% of large companies implemented used enterprise resource planning tools. Furthermore, the growth is fueled by a large number of small & medium-sized businesses that are turning to hosted ERP systems to manage their company operations more efficiently, notably in countries such as Germany, Italy, and France.

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Due to various factors such as the penetration of new industries and the development of the economy, 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 technology capabilities.

Also, through collaborations, companies are gaining expertise and expanding their business by reaching a mass customer base. The key players focus on market share expansion and customer reach through strategic acquisition. For instance,

October 2020: Deltek, a project-based ERP software provider, launched and updated its product portfolio of ERP software. The new ERP solution includes favorable features for industry-specific activities such as manufacturing and supply chain. Its features include several functionalities such as content management and proofing for marketing agencies and construction management for engineering, architecture, and construction companies.

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.)


• IFS Global (Sweden)


• Epicor (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• July 2022: Infor, a cloud-based software firm, partnered with Syntellis data and intelligence, a performance solutions provider of enterprise performance management software solutions. This partnership allowed healthcare customers to access Syntellis Axiom Healthcare Suite for intelligent planning and performance solutions. It provides users with EPM tools with data-driven insights for improving the organization's cost of care and operations.


• February 2022: IBM Corporation and SAP SE announced a hybrid cloud partnership to move their enterprise's resource planning to the cloud. IBM’s contribution is to offer SAP’s consumers SAP S/4HANA on the IBM cloud. SAP S/4HANA, is an ERP service for major organizations.


• November 2021: Oracle Corporation announced to help Honda Motor improve its procurement operations in Japan with Oracle Fusion Cloud Enterprise Resource Planning (ERP). Oracle Fusion cloud procurement platform utilized by 4,000 suppliers and 25,000 employees.


• October 2021: Microsoft Corporation acquired Clear Software business process solutions to expand the support for the enterprise resource planning software offering for automating business workflows. The ERP application is intended to strengthen Microsoft’s power platform with an enterprise software framework for manipulating, surfacing, and automating data.


• January 2021: SAP SE acquired Signavio GmbH, a business process intelligence and process management space provider. This acquisition with Signavio with the business process intelligence unit of SAP will help improve and transform the organization's business process 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 industry. 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 growth-stimulating restrictions and elements, allowing the reader to obtain a thorough understanding of the industry.

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