Enterprise resource planning (ERP) software systems are now considered in the list of basic requirements for the management of a business. From planning to managing, it is used in core manufacturing services, financial processes, and much more in an organization. The global ERP software market is expected to reach $78.4 billion by 2026, growing at a CAGR of 10.2% from 2019 to 2026.
Looking for ERP Software? Check out SoftwareSuggest’s list of the best ERP solutions.
Today in our blog, we will discuss the ERP Facts and Statistics that highlight how it enhances business processes. These ERP statistics will help you select an effective ERP system for your organization according to your needs and requirements.
The ERP Journey
The Gartner Group introduced the concept of Enterprise Resource Planning in the early 1990s. However, ERP systems and software have been used for around 100 years, and they are quite popular in the manufacturing industry.
Stay agile and prioritize user adoption in your ERP implementation strategy to increase the chances of success. Empower your team to embrace and leverage the advanced functionalities and actively involve end-users in the process. Also, provide comprehensive training and continuously assess feedback to ensure a seamless integration that maximizes the benefits of your ERP investment.
The Evolution of ERP
- The 1980s– Evolution of computer technologies and software-based business activities such as CRM or customer relationship management, human resources data, and finance.
- 1983– A new MRP II was introduced that featured “modules.” It integrated the essential manufacturing components and tasks that form a shared data system.
- In the 2000s– Gartner Group created the term ERP to distinguish the system from MRP software. This new system encompasses business intelligence and handles other important business functions like SFA (Sales Force Automation), eCommerce, and marketing automation.
- 2005– Enterprise Resource Planning Solution was made Cloud-based. It created Internet-enabled commodities that provided an alternative to the conventional on-premise customer server models.
- Now– SaaS or Software-as-a-Service and XaaS or Anything-as-a-Service are introduced as the new delivery systems for ERP. The web-based remote access for ERP solutions offers security, mobile solutions, smart technologies, the Internet of Things or IoT, Internet of Everything, or IoE.
- Future: It is said that the global market revenue of ERP is expected to rise by $47 billion in the coming 5 years. ERPs will become a priority investment for business organizations.
ERP Software Market 2024
The enterprise resource planning software market is poised for continued growth in 2024. This market expansion will be fueled by factors including the acceleration of cloud ERP adoption, increased demand for ERP mobility and agility, and rising implementation of ERP solutions among small and medium-sized businesses. Here are some key ERP statistics to watch out for.
- The manufacturing industry accounts for 34% of the ERP market, followed by IT (14.85%) and financial services (13.86%).
- The top benefits companies implementing ERP look for include cost savings (46%), better performance metrics (46%), and more efficient transactions (40%).
- The same report indicates that the top feature 89% of businesses look for in the ERP is accounting.
- 46% of businesses believe that cost savings are among the top three goals for ERP, followed by regulatory compliance (12%).
ERP Implementation Statistics 2024
Execution of a successful ERP implementation requires companies to have a vivid vision of the prerequisites of a new system. This would create alignments within the organization. You can increase the probability of a successful project by selecting an efficient vendor and also assigning a central and internal implementation group.
Though ERP implementation risks are quite common, ERP facts and statistics show that many organizations are surpassing the expectations of efficient implementations.
- 55%-75% of all ERP projects fail to meet their objectives.
- The top two reasons for lack of success in an ERP Implementation are inadequate quality of testing and inadequate business process re-engineering.
- 64% of companies look for SaaS ERP systems, 21% want entirely cloud-based options, and 15% want on-premise solutions.
- The same report indicates that interest in cloud-based ERP went from 4% in 2013 to 42% in 2022.
- Only 3% of businesses use ERP with out-of-the-box functionality, while the rest use some degree of customization.
- 33%-48% of companies request moderate customization while only 10%-19% request “personalized” ERP solutions.
| List of the ERP Softwares by Industry |
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ERP ROI Statistics 2024
Wondering if investing in ERP software is the right decision? Here are some ERP statistics that’ll help you decide.
- 95% of businesses improve their processes after implementing an ERP system.
- The average ROI for an ERP project is 52%, meaning that for every $1 invested in an ERP system, businesses get $1.52.
- However, the typical payback period for an ERP investment is two to three years.
- ERP systems lead to 30% cost savings in purchasing and inventory control areas.
- Another report indicates that ERP reduces the inventory cost by 11%, on average.
- Only 9% of organizations say that they did not realize any benefits (in terms of ROI) after implementation.
The Most Used ERP System In The Industry
These solutions are most widely adopted due to factors like market-leading features, flexibility, and track record serving the needs of enterprises across industries.
1. Microsoft Dynamics 365
With a 26.61% share of the ERP market, Microsoft Dynamics 365 is the top ERP solution in 2024. Not only does it help enhance operational efficiency, but it also makes supply chain management seamless. Furthermore, its integration with other Microsoft products and customer relationship management systems makes it a natural choice for many businesses.
2. Oracle ERP Cloud
Oracle ERP Cloud holds 22% of the ERP market currently. It is highly regarded for its security features and robust functionality after Oracle’s acquisition of NetSuite expanded its SaaS capabilities.
3. SAP
SAP continues to be popular among large enterprises, commanding 18% of the ERP market share. While SAP implementation takes time, its customizability allows it to meet diverse organizational requirements.
The Current and Potential Problems Faced in ERP Systems
ERP applications are like any other platform that comes with challenges and problems. The issues may range from scalability issues to installation challenges. You may want to know the potential problems faced in ERP systems while using enterprise resource planning solutions.
- The main challenge of using ERP systems is organizational challenges. This could be a potential reason why your ERP projects are missing the given deadlines.
- ERP systems are inadequately flexible. An organization may need to adapt to the system or processes of ERP to make it work efficiently. Most ERP implementations may fail to work on the first try.
- Despite the benefits of using ERP systems, users just do not want to replace their existing integral system with ERP. This is because a change may lead to inevitable delays and resistance from the team.
- Every ERP system requires regular maintenance, adding maintenance costs to the allotted budget. 64% of ERP projects require a relatively high budget.
- The functionality of ERP systems may be restricted, which affects the existing efficient practices. It is important to vet the vendors before implementing a new ERP software.
ERP Trends for 2024 and Beyond
Trends tend to follow the latest developments in ERP technologies. Here, we have compiled some significant trends observed among the ERP vendors.
1. SaaS & On-Premise Hybrid
Many companies prefer a hybrid ERP approach, i.e., integrating on-premise software into the cloud platform. For example, let’s say integrating cloud payroll into local HR-focused ERP. In the context of cost and process, this strategy seems meaningful. Thus, software vendors tend to offer hybrid ERP. For instance, Oracle is co-opting it with cloud solutions instead of replacing its on-premise ERP licensing.
2. Two-Tier
Two-tier ERP vendors involve two systems in a single company. Most multinational companies are moving towards this approach where tier 1 software is used in ERP at the corporate level, and tier 2 is used at the branch/subsidiary level. This strategy proves helpful when big corporations find it difficult to implement an overarching infrastructure due to cultural, geopolitical, and market differences.
Social software is used in ERP to add data from social media platforms like Twitter and Facebook into the system. It is a CRM initiative as most businesses are involved in online customer engagement, brand mentions, friend networks, public data, likes, and shares to obtain customer knowledge. As a result, it helps them improve conversion rates.
4. Mobile
Some solutions provide native apps for Android, iOS, and Windows. It allows employees to stay connected and productive even outside the office. But, accessing data anywhere on a device the company does not issue is prone to a security breach. Mobile ERP solves this issue by providing different user permission that helps the company control who can access data on their phones.
Final Thoughts
As evident from the statistics and trends outlined, ERP systems continue to see immense growth and evolution. With cloud and mobile capabilities expanding functionality and accessibility, ERPs are becoming integral for businesses of all sizes looking to manage operations efficiently. While challenges remain, thoughtful implementation and change management will allow companies to maximize value.
Do you use ERP in your organization? What benefits or challenges do you face regularly?
Yes, ERP solutions improve business efficiency by providing more visibility into your operations. You can track the sales pipeline, identify warm leads, and average customer lifetime value.
Statistics indicate a challenging landscape, with 50%-75% of ERP projects falling short of meeting their defined objectives.
The primary reasons behind ERP implementation failures are inadequate testing quality and a lack of business process re-engineering before system deployment.
ERP performance is gauged through key performance indicators, including system uptime, response time, user satisfaction, process efficiency, data accuracy, cost reduction, and integration success. Regular monitoring of these KPIs provides insights into the system's overall effectiveness, helping organizations optimize its functionality.
Rohit Rajpal is an accomplished writer and data enthusiast passionate about unraveling the intricacies of information and data. With a deep understanding of the subject matter, Rohit strives to simplify complex concepts and make them accessible to readers. Rohit’s expertise in the field and his knack for clear and concise communication make his blog an invaluable resource for those seeking clarity in the data-driven world.
