ERP Software Market to Grow by USD 34.73 Billion from 2024-2028, as Demand for Operational Efficiency Rises with AI Impact on Market Trends - Technavio

NEW YORK, Nov. 11, 2024 /PRNewswire/ -- Report on how AI is redefining market landscape - The global enterprise resource planning (ERP) software market market size is estimated to grow by USD 34.73 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of 10.67% during the forecast period. Increased operational efficiency associated with erp software is driving market growth, with a trend towards embedded data analytics features. However, increasing number of cyberattacks on erp software poses a challenge.Key market players include Acumatica Inc., Citrix Systems Inc., Computer Generated Solutions Inc., Dassault Systemes SE, Ellucian Co. LP, Epicor Software Corp., IFS World Operations AB, Koch Industries Inc., Microsoft Corp., Odoo SA, Oracle Corp., Roper Technologies Inc., Sage Group Plc, Salesforce Inc., SAP SE, ServiceNow Inc., SYSPRO Pty. Ltd., TOTVS SA, Unit4 Group Holding B.V., and Workday Inc.

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Market Driver

ERP software market is thriving with trends like supplier-relationship management and customer-relationship management taking center stage. Cloud-based platforms are popular, offering financial systems, integrated applications, and real-time decision-making. Customer-centric strategies focus on satisfaction, loyalty, and productivity through workflows and mobile-friendly solutions. Manufacturing SMEs and large enterprises alike seek ERP systems for streamlining and coordination, effective communication, and control. Adaptability and flexibility are crucial for new product lines, markets, and organizational structure changes. The business online concept and contactless transactions are driving the shift to cloud & hybrid solutions. ERP systems cater to various industries, including IT & telecom, retail & consumer goods, healthcare & life sciences, transportation & logistics, government, aerospace & defense, and manufacturing processes. Costs, such as initial investment, maintenance, inventory, and raw material, are significant considerations. SAP solutions are popular, but open-source applications offer customization capabilities for midsize enterprises. On-premises deployment models remain an option for some, while compliance and operational efficiency are key concerns. Cloud solutions offer flexibility and lower costs, but IT budgets and technical expertise are essential. Two-tier ERP and subsidiary management are also important considerations for large-scale organizations. Digital transformation investments continue to grow, with a focus on data-driven decisions, transparency, and supply chain management. Procurement and supply chain operations, financial activities, and human resource segments are major areas of improvement. Manufacturing businesses prioritize production process efficiency and on-time delivery. In conclusion, ERP software market trends include customer-centric strategies, cloud-based solutions, and operational efficiency. Costs, customization capabilities, and industry-specific needs are key factors in selecting the right ERP system. 

Modern Enterprise Resource Planning (ERP) software is advancing to accommodate real-time data architecture and design. Transactional ERP data and in-memory computing enable advanced reporting and analytics directly within these systems. This integration eliminates the need for separate analytic applications, allowing users to execute simulation, planning, modeling, and forecasting functions within the ERP software itself. These features can significantly improve an enterprise's market responsiveness. For example, a global manufacturer can optimize its supply chain by utilizing the analytical capabilities of its ERP software to manage raw material sourcing more efficiently. 

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Market Challenges

• ERP software market is growing as businesses seek integrated applications for supplier-relationship and customer-relationship management. Cloud-based platforms are popular due to their flexibility and real-time decision-making capabilities. Financial systems, customer-centric strategies, and productivity are key drivers. Customer satisfaction and loyalty are crucial in today's competitive business environment. Manufacturing SMEs and large enterprises face unique challenges. Adaptability and flexibility are essential for new product lines and market entries. Organizational structure changes, digital transformation investments, and the business online concept require streamlining and effective communication between departments and employees. ERP systems offer integrated applications, workflows, and customer service, often mobile-friendly and suitable for various industries like IT & telecom, retail & consumer goods, healthcare & life sciences, transportation & logistics, government, aerospace & defense, and manufacturing. Cloud & hybrid deployment models offer cost savings compared to dedicated hardware and public infrastructure. Two-tier ERP solutions cater to subsidiaries and regional operations. However, initial investment and maintenance costs can be high, requiring careful consideration and IT budget planning. SAP solutions are popular, but open-source applications offer customization capabilities at lower costs. Compliance is crucial for various industries, making ERP systems essential for operational efficiency, transparency, and profitability. Manufacturing businesses benefit from ERP systems, improving production processes, supply chain operations, financial activities, and human resource management. Cloud-based solutions offer inventory cost savings and raw material cost control, contributing to overall profitability.
• ERP software plays a vital role in connecting various business functions within an organization. Unfortunately, this makes ERP platforms an attractive target for cybercriminals seeking to disrupt operations and gain access to sensitive information. Hackers can exploit vulnerabilities in ERP systems, leading to issues such as distributed denial-of-service (DDoS) attacks. These attacks can cause significant downtime and impact production efficiency. ERP systems store valuable business-critical data, increasing their appeal to hackers. Additionally, the prevalence of default and shared passwords in many organizations makes it challenging to secure ERP credentials effectively. This lack of robust IT security infrastructure leaves companies vulnerable to cyber threats, putting their business operations at risk.

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Segment Overview 

This enterprise resource planning (erp) software market market report extensively covers market segmentation by

1. Type 
• 1.1 Cloud based
• 1.2 On-premise
2. End-user 
• 2.1 Manufacturing
• 2.2 BFSI
• 2.3 Healthcare
• 2.4 IT and telecom
• 2.5 Others
3. Geography 
• 3.1 North America
• 3.2 Europe
• 3.3 APAC
• 3.4 Middle East and Africa
• 3.5 South America

1.1 Cloud based- The cloud-based segment holds the largest market share in the global Enterprise Resource Planning (ERP) software market in 2023, driven by the technological shift towards cloud computing. Cloud-based ERP revenues have grown significantly over the last five years and are expected to continue this trend during the forecast period. Vendors, such as Acumatica and Epicor, have responded to this demand by offering cloud-based ERP solutions with multitenant architectures. These solutions offer benefits like real-time analytics, regular updates, global accessibility, and scalability. Cloud-based ERP solutions have matured and can now support the requirements of large enterprises, making them an attractive alternative to on-premises ERP solutions. The benefits of cloud-based ERP, including fewer data loss instances, hassle-free mobile access, and regular data backups, make them an ideal choice for organizations of all sizes, particularly SMEs with limited IT budgets and resources. The cloud-based ERP market's growth is further fueled by the maturity and stability of cloud-based solutions for operational functions like supply chain management, demand management, and inventory management. In summary, the cloud-based ERP segment is expected to dominate the global ERP software market and contribute significantly to its incremental growth during the forecast period.

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Research Analysis

Enterprise Resource Planning (ERP) software is a business solution that integrates and manages various aspects of a business, including supplier-relationship management, customer-relationship management, financial systems, and integrated applications. ERP systems enable productivity, streamline workflows, and promote teamwork through real-time decision-making and effective communication. Cloud-based ERP platforms offer flexibility and adaptability, allowing businesses to access their systems from anywhere, at any time. ERP systems are essential for both manufacturing SMEs and Large Enterprises, helping to coordinate and control operations, improve organizational structure changes, and expand into new product lines and markets. Mobile-friendly ERP solutions and contactless transactions support the business online concept, ensuring continuity during the digital transformation. Customization capabilities, regional operations, and control are crucial features, while high cost and IT budgets remain challenges for some organizations. Overall, ERP systems provide the tools necessary for a customer-centric strategy and productivity gains.

Market Research Overview

Enterprise Resource Planning (ERP) software is a business solution that integrates and manages various business processes, including supplier-relationship management, customer-relationship management, financial systems, and manufacturing processes. ERP systems enable real-time decision-making, teamwork, and adaptability, making them essential for both manufacturing SMEs and large enterprises. Cloud-based ERP platforms offer mobility, flexibility, and lower initial investment, allowing businesses to access applications from mobile devices and make contactless transactions. ERP systems streamline and coordinate workflows, ensuring effective communication between departments and employees. They provide customization capabilities, allowing organizations to adapt to new product lines, markets, and organizational structure changes. ERP solutions offer integrated applications for customer service, inventory management, procurement, and supply chain management. ERP systems are used in various industries, including IT & telecom, retail & consumer goods, healthcare & life sciences, transportation & logistics, government, aerospace & defense, and manufacturing companies. The high cost and IT budgets required for ERP implementation may limit adoption by some SMEs, but the benefits of operational efficiency, transparency, and data-driven decisions make them a worthwhile investment for large-scale organizations. ERP systems offer on-premises deployment models as well as cloud & hybrid solutions. Compliance and customization capabilities are crucial factors for organizations in different industries and enterprise types. Two-tier ERP solutions are popular among midsize enterprises and subsidiaries, allowing them to implement ERP in a phased manner. ERP systems offer significant benefits for manufacturing businesses, including improved production processes, operational efficiency, and supply chain operations. Financial activities, human resource management, and inventory costs are also managed through ERP systems. The cloud-based deployment model offers lower initial investment and maintenance costs compared to on-premises solutions. Cloud-based ERP solutions offer open-source applications, which can reduce costs and provide greater flexibility. However, they may require technical expertise for implementation and customization. The initial investment for ERP implementation can be high, but the long-term benefits of increased productivity, customer satisfaction, loyalty, and profitability make it a worthwhile investment for businesses of all sizes.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Type
• Cloud Based
• On-premise
• End-user
• Manufacturing
• BFSI
• Healthcare
• IT And Telecom
• Others
• Geography
• North America
• Europe
• APAC
• Middle East And Africa
• South America

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

Contacts

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 844 364 1100
UK: +44 203 893 3200
Email: [email protected]
Website: www.technavio.com/

SOURCE Technavio

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