According to a recent report published by Allied Market Research, titled, "ERP Software Market by Component, Deployment Model, Business Function, Industry Vertical, and End User: Opportunity Analysis and Industry Forecast, 2019-2026," the global ERP software market was valued at $35.81 billion in 2018, and is projected to reach $78.40 billion by 2026, growing at a CAGR of 10.2% from 2019 to 2026.
Factors such as increase in need for operational efficiency and transparency in business processes and rise in demand for data-driven decision-making are expected to fuel the market growth. In addition, surge in the adoption of cloud as well as mobile applications is expected to drive the growth of the ERP software market. However, availability of open source applications and higher investment and maintenance costs are expected to impact negatively on the global market. On the contrary, increase in demand for ERP among small & medium sized enterprises and technological advancements in enterprise resource planning software are expected to provide lucrative opportunities for the market growth in the coming years.
Based on deployment model, the on-premise segment dominated the overall ERP software market in 2018, and is expected to continue this trend during the forecast period. This is attributed to numerous benefits provided by ERP software such as end-to-end control of software, maintaining IP within the organization and implementing significant customization as and when required by the organization. Owing to these factors, a large number of enterprises across the globe opt for on-premise deployment model for storing and securing their data. However, the cloud segment is expected to witness the highest CAGR during the forecast period, due to a paradigm shift in the deployment methods from on-premise to cloud-based models among end users.
The finance business function was the highest contributor to the ERP software market in 2018, and is projected to remain dominant during the forecast period, owing to increase in the need for maintenance of the financial data in a uniform manner. Furthermore, in upcoming years number of businesses are anticipated to implement financial ERP module to improve their business efficiency and productivity, thus providing ample growth opportunities to the ERP software market. However, the human resource (HR) module is expected to witness highest growth, owing to increase in adoption of HR module in IT industries, and BPOs to perform HR activities in a smooth and easy manner. In addition, ongoing business expansion in developing economies compels businesses to adopt ERP HR modules for easy integration and management of all the required information of the present and additional workforce.
The manufacturing industry dominated the ERP Software Market in 2018, and is expected to continue this trend during the forecast period. This is attributed to rise in number of entrants in pharmaceutical, automotive, garment, and consumer electronics manufacturing markets. However, the healthcare industry is expected to witness highest CAGR during the forecast period. This is attributed to stringent government regulations mandating the transparency and availability of patient records due to which the industry is investing in digitization and automation. Further, growing focus on improving operational efficiencies, while reducing labor and inventory costs leads to the adoption of ERP software in the healthcare industry as it effectively supports cost effective supply chain management, streamlines human capital management, and exercises stringent fiscal control.
Key Findings of The ERP Software Market:
- Based on component, the software segment accounted for the highest revenue in 2018.
- By deployment mode, the on-premise segment dominated the ERP software market. However, the cloud segment is expected to exhibit significant growth during the forecast period.
- Based on business function, the finance segment accounted for the highest revenue in 2018.
- By industry vertical, the manufacturing segment is expected to witness significant growth in the upcoming years.
- Depending on end user, the large enterprises generated the highest revenue in 2018. However, medium enterprises is expected to witness highest growth rate in the near future.
- Country wise, Bangladesh is expected to witness significant growth in the upcoming years.
Some of the key market players profiled in the report include SAP SE, Oracle Corporation, Sage Software Solutions Pvt. Ltd., Workday, Inc., Infor, Epicor Software Corporation, SYSPRO, Microsoft Corporation, IFS, and Deskera. This study includes ERP Software Market analysis, trends, and future estimations to determine the imminent investment pockets.