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Enterprise Resource Planning (ERP) Market

Enterprise Resource Planning (ERP) Market Size, Share, Competitive Landscape and Trend Analysis Report by Component, Deployment Model, Enterprise Size, Business Function and Industry Vertical : Global Opportunity Analysis and Industry Forecast, 2021-2030

IC : Software and Services

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Author's: Keshav Kumar| Pramod Borasi | Onkar Sumant
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Enterprise Resource Planning (ERP) Market Statistics: 2030

The global enterprise resource planning market was valued at $43.72 billion in 2020, and is projected to reach $117.09 billion by 2030, growing at a CAGR of 10.0% from 2021 to 2030. Enterprise resource planning (ERP) solutions are used by companies to help them manage their business operations and processes more efficiently. Presently, an ERP solution’s business functions have shifted from minor aid and planning operations to entire business process integration, involving crucial responsibilities such as hiring and decision-making. An ERP software is made up of numerous software modules, each of which focuses on a certain business activity such as material purchasing, inventory control, accounting, finance, and HR. These modules can be customized to meet the needs of the organization.

Enterprise Resource Planning (ERP) Market

Rise in need for operational efficiency and transparency in business processes and increase in demand for ERP software from small & medium enterprises boost the growth of the global market. In addition, surge in adoption of cloud and mobile applications is positively impacting the growth of the market. However, availability of open-source ERP applications and high implementation cost of ERP software technology hamper in the growth of ERP market. On the contrary, rise in application of ERP solution in small & medium enterprises and rapid transformation of modern business models are expected to offer remunerative opportunities for expansion of the enterprise resource planning market during the forecast period.

Depending on deployment model, the on-premise segment dominated the ERP market share in 2020, and is expected to continue this trend during the forecast period as on-premise ERP solutions are providing enterprises a much easier way to manage their resources and business operations. However, the cloud segment is expected to witness the highest growth in the upcoming years, owing to surge in cloud adoption in modern-day business enterprises.

Region wise, the enterprise resource planning market was dominated by North America in 2020, and is expected to retain its position during the forecast period, owing to its high digital and cloud technology adoption rates. Moreover, increase in use of ERP software solutions is enabling higher productivity and efficiency standards in the region, which is expected to drive the ERP industry during the forecast period. However, Asia-Pacific is expected to witness significant growth during the forecast period, owing to ongoing economic transformation in the region and increasing cloud adoption trends.

The report focuses on growth prospects, restraints, and analysis of the global ERP market trend. The study provides Porter’s five forces analysis to understand the impact of various factors, such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the global ERP market share.

Segment Review

The global ERP software market is segmented on the basis of component, deployment model, enterprise size, business function, industry vertical, and region. On the basis of component, the market is bifurcated into software and services. Depending on deployment model, the market is divided into on-premise, cloud, and hybrid. By enterprise size, it is segregated into large enterprises, medium enterprises, and small enterprises. On the basis of business function, it is segregated into finance, human resource (HR), supply chain, customer management, inventory management, manufacturing module, and others. The industry verticals covered in the study include manufacturing, BFSI, healthcare, retail & distribution, government & utilities, IT & telecom, construction, aerospace & defense, and others. Region wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

The global ERP software market is dominated by key players such as IBM Corporation, Infor, Microsoft Corporation, NetSuite Inc., Oracle Corporation, Sage Group Plc., SAP SE, SYSPRO, TOTVS S.A., and Unit4. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.

Enterprise Resource Planning (ERP) Market
By Component Type
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Software segment is projected as one of the most lucrative segment.

Covid-19 Impact Analysis

The COVID-19 pandemic has resulted in a series of lockdowns and self-quarantine regulations, which resulted in closures, supply chain disruptions, and workforce unavailability. Such factors had a substantial impact on various business sectors throughout the world, ranging from electronics to automobile manufacturers. For instance, the BBC reported in April 2021 that China's GDP dropped by 6.8% in the first quarter of 2020 as a direct consequence of nationwide lockdowns. Such instances were causing havoc in a number of global enterprise resource planning market sectors during the period. However, ERP software solutions helped businesses to remain functional remotely during the pandemic, which is supporting the global ERP industry growth in the coming years.

Top Impacting Factors

Need For Operational Efficiency And Transparency In Business Processes

Traditionally, businesses with the help of homegrown ERP applications spend a lot of time and effort in communicating business information and making decisions.  Organizations aiming at becoming successful are continuously looking out for systems that will help them serve their clients and increase their profit margin. Presently, ERP systems have become strategic platforms, providing a solid foundation and information backbone for businesses. A fully integrated ERP system helps to capture and create accurate, consistent, and timely relevant data and assist to take better business decision.  Offering personalized services and ensuring that customers are satisfied do not affect the profitability of an organization unless the operating efficiency of a company is exceptional.  To improve efficiency and ensure a better information integration, companies are now looking at ERP systems.

Enterprise Resource Planning (ERP) Market
By Business Function
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Finance segment is projected as one of the most lucrative segment.

Organizations need to access all relevant information quickly to take a necessary business action, owing to increased competition and rapidly changing business environment. It can be achieved only if the organization becomes more transparent and open. Thus, an enterprise resource planning system that can scale and deal with the global competition while introducing efficiency and transparency in operations is expected to gain a strong foothold in the enterprise resource planning market within the forecast period.

Adoption Of Cloud and Mobile Applications

Cloud computing is an emerging technology that allows enterprises to store and access data through internet. Agility, scalability, reliability, and flexibility are some of the major characteristics of the cloud technology attributing to its popularity. Software as a service (SaaS) or on-demand is one of the service models of cloud computing based on the pay-per-use fee model. Cloud-based applications reduce IT infrastructure cost of the enterprise to a certain extent. This is the prime reason behind adoption of cloud-based application among enterprises. As mobiles has become an integral part of working culture, the enterprises are ready to spend for cloud-connected mobile applications as they allow access to information anytime and anywhere. In addition, cloud connected mobile applications allow synchronization, updates, and control on document to individual user. This would help organizations to maintain work–life balance for their employee as well as enhance productivity. These benefits are expected to drive the demand of cloud and mobile applications in the coming years.

Enterprise Resource Planning (ERP) Market
By Region
North America

Asia-Pacific would exhibit the highest CAGR of 11.9% during 2021-2030.

Key Benefits for Stakeholders     

  • The study provides an in-depth analysis of the global ERP market forecast along with current & future trends to explain the imminent investment pockets.
  • Information about key drivers, restraints, & opportunities and their impact analysis on global ERP market trend is provided in the report.
  • The Porter’s five forces analysis illustrates the potency of the buyers and suppliers operating in the industry.
  • The quantitative analysis of the market from 2021 to 2030 is provided to determine the market potential.

Enterprise Resource Planning (ERP) Market Report Highlights

Aspects Details
By Component
  • Software
  • Services
By Deployment Model
  • On-premise
  • Cloud
  • Hybrid
By Enterprise Size
  • Large Enterprises
  • Medium Enterprises
  • Small Enterprises
By Business Function
  • Finance
  • Human Resource (HR)
  • Supply Chain
  • Customer Management
  • Inventory Management
  • Manufacturing Module
  • Others
By Industry Vertical
  • Manufacturing
  • BFSI
  • Healthcare
  • Retail & Distribution
  • Government & Utilities
  • IT & Telecom
  • Construction
  • Aerospace & Defense
  • Others
By Region
  • North America  (U.S., Canada)
  • Europe   (Germany, France, UK, Italy, Spain, Rest of Europe)
  • Asia-Pacific   (Japan, China, Australia, India, South Korea, Rest of Asia-Pacific)
  • LAMEA  (Latin America, Middle East, Africa)
By Key Market Players
  • IBM Corporation
  • Infor
  • Microsoft Corporation
  • NetSuite Inc.
  • Oracle Corporation
  • Sage Group Plc.
  • SAP SE
  • TOTVS S.A.
  • Unit4

Analyst Review

In the modern business environment, there has been a significant increase in the use of ERP software solutions across many industry verticals such as manufacturing, BFSI, retail, and healthcare. Organizations can boost their productivity and efficiency by integrating their operations, critical business processes, and resources management activities on a multi-access point network of single ERP software. As a result, businesses are embracing ERP systems to save IT costs and streamline business operations. Moreover, the use of ERP software enables businesses to link their operations with their suppliers, channel partners, and consumers, which enables them more efficiently manage their inventory levels. Such applications of ERP software in modern business enterprise are fueling the growth of ERP software solutions market.

The key providers of the ERP software market such as IBM Corporation, Microsoft Corporation, and Oracle Corporation account for a significant share in the market. With larger requirement from ERP software, various companies are establishing partnerships to increase ERP software capabilities. For instance, in January 2021, Microsoft Corp. announced plans to integrate Microsoft Teams with SAP’s intelligent suite of solutions. The companies formalized an extensive expansion of an existing strategic partnership to accelerate the adoption of SAP S/4HANA® on Microsoft Azure. This builds on a joint commitment by the companies to simplify and streamline customers’ journeys to the cloud.

In addition, with increase in demand for ERP software, various companies are expanding their current product portfolio with increasing diversification among customers. For instance, in January 2019, Infor, a global leader in business cloud software, announced the launch of speed, flexibility, and agility-based enhancements to four of its ERP systems, Infor LN, Infor CloudSuite Automotive, Infor CloudSuite Aerospace and Defense (A&D), and Infor CloudSuite Industrial Enterprise. These product enhancements will help discrete manufacturers within the automotive, A&D, construction, high tech & electronics, industrial machinery & equipment, and industrial manufacturing industries better align their business objectives with business processes, without the need for costly customization.

Moreover, market players are expanding their business operations and customers by increasing their acquisition. For instance, in December 2021, Wipro Limited announced the acquisition of LeanSwift Solutions, an ERP, e-commerce, digital transformation, supply chain, warehouse management systems, business intelligence, and integrations solutions provider based in U.S. The acquisition aligns with Wipro’s strategy to invest and expand its cloud transformation business through Wipro FullStride Cloud Services. LeanSwift through its capabilities in both the consulting and implementation space, will complement Wipro’s Infor cloud practice, and will also establish Wipro as a market leader in the Infor industry cloud services. The combined entity will provide Wipro an edge in key transformation deals, especially in the manufacturing and distribution industry, combining Infor CloudSuite and broader cloud-native digital capabilities.

Author Name(s) : Keshav Kumar| Pramod Borasi | Onkar Sumant

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Enterprise Resource Planning (ERP) Market

Global Opportunity Analysis and Industry Forecast, 2021-2030