ERP Software Market Report, published by Allied Market Research, forecasts that the global market is expected to garner $ 41.69 billion by 2020, registering a CAGR of 7.2% during the period 2014-2020.
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Emergence of cloud technology in the market would lead to a paradigm shift in the deployment methods from on premise to cloud-enabled ERP. Cloud ERP software considerably reduces the investments required in alternative IT resources and offers greater flexibility. Thus, customers are shifting from on-premise to cloud ERP. Feature of accessing ERP from mobile devices would gain a surge in terms of adoption.
ERP software comprises of several ERP modules such as finance, sales, marketing, HR, etc. Integration of business functions is effectively done through implementation of ERP software. Thus, it enables smooth and efficient functioning of businesses. These benefits lead to a large adoption of ERP software among customers. Among the various functions, finance function would drive the ERP software market significantly by the year 2020, and would contribute to near about 30% of the overall market revenue.
Aerospace and Defense verticals have adopted ERP software to monitor and control their operational process. Aerospace and Defense verticals would grow at a relatively higher CAGR of 8.86% from 2014-2020 compared with other verticals. The prime reason for this growth would be to maintain data transparency on real-time basis. Based on deployment type, cloud ERP is gaining prominence over on premise ERP in Aerospace and Defense verticals. Realizing the business potential, market players such as Oracle, SAP and Infor are focusing to develop ERP system for Aerospace and Defense verticals. Adoption of ERP software among mid-size enterprises would grow rapidly at a CAGR of 7.9% during 2014-2020. The major reason behind the increased adoption among mid-sized enterprises is to reduce the operational cost related to IT so as to sustain in the competitive era.
Global ERP vendors in the market like Oracle, SAP and Microsoft are launching ERP products, which can be easily accessed via mobile devices like smartphones and tablets. These players are putting efforts to develop ERP system that could be easily delivered from third-party vendor's platform. The market is increasingly witnessing a shift towards Software as a Service (SaaS) model.
Key Findings of ERP Software Market:
- On-premise ERP software would continue to have a larger market share occupying around 57% of themarket in 2020. However, cloud-based ERP would witness higher growth, at a CAGR of 10% during 2014-2020
- Adoption of ERP software would increase rapidly in Aerospace and Defense vertical, growing at a CAGR of 8.86% during 2014-2020
- Asia-Pacific would prove to be one of the most lucrative markets, in terms of growth. It is anticipated to reach$ 9.77 billion by the year 2020
ERP software streamlines business processes and offers scalability feature. Thus, to fulfill the needs of changing business models, ERP software would gain high acceptance among enterprises. Customers today, prefer cloud ERP software over on premise ERP deployment as it enables their workforce to access information for critical business decision anytime and anywhere. The surge in cloud technology would drive the adoption of cloud-enabled applications. By 2020, cloud-enabled ERP would grow at a CAGR of 10% due to easy access and low cost factors.