Big business loves enterprise resource planning (ERP) solutions that help management gather data across complex, sometimes multinational structures. ERP software helps businesses drive quality and efficiency in client, employer, supplier, and regulator interactions by offering a single platform for managing multiple business elements.
In the next decade, small and medium businesses will embrace ERP technology more as costs fall and storage capacity and computer processing power increase. We’ll explore ERP market predictions for change and growth in the coming years and explain more about ERP solutions.
The ERP market is expected to reach $117.09 billion by 2030 at an annual growth rate of 10%, according to Allied Market Research. As more businesses rely on ERP solutions, the sector will evolve and change to accommodate new functions and technologies.
By 2030, analysts expect the following four significant ERP market shifts.
Although cloud-based ERPs offer additional features and more customizability, on-premise solutions currently command 65% of the market, according to Panorama’s 2022 ERP report. Most businesses want more control over ERP functionality and security than cloud-based ERPs currently offer, driving this on-premise preference.
However, Grandview Research reports that cloud-based ERPs are expected to catch up and dominate the market by 2030 thanks to the lack of upfront investment, faster implementation, accessibility, scalability, efficiency and immediacy.
According to the 2022 ERP report, cloud-based solutions will grow as businesses replace legacy systems – and 32% of respondents indicated this preference. Additionally, Statista found that the global cloud ERP market will reach $40.5 billion by 2025 at an annual growth rate of 13.6%, partly spurred by the pandemic and more remote work plans.
Cloud-based ERP solutions benefit many areas of an organization, including the following:
Large enterprises currently comprise 39% of the ERP market share, according to Grandview Research. They’ll rely on ERP solutions even more in the coming years as they seek further streamlining in e-commerce activities, order fulfillment, procurement, inventory management and production planning.
However, more small and midsize businesses will turn toward ERP solutions as they become more affordable, flexible, customizable and adaptable. Technavio expects the market for ERP systems for SMBs to grow at an annual rate of 7.42% from now until 2025.
ERP systems will help these companies find efficiencies and savings in operations, production and delivery, offsetting increasing government regulation and competition.
Although top accounting software and customer relationship management (CRM) systems will drive most of this growth, analysts expect SMBs to take advantage of the increasing ability of apps to talk to each other. Over time, the apps will, in unison, create effective bespoke ERP systems customized to individual SMB needs. SMBs will become more efficient and profitable as the data insights created by these systems assist with process automation.
According to the 2022 ERP report, only 3.6% of organizations implement ERP solutions out of the box with no customizations. More than 64% add moderate or heavy customizations in configurations and processes. Customized solutions are expected to increase to help organizations better serve their customers and streamline operations.
Customized ERPs help businesses personalize solutions for their customers to create a better experience. For example, personalizing your ERP solution with chatbot technology can help you answer customer questions with order and account information preprogrammed into the system.
ERP solutions tailored to industries and businesses will also reduce the need for specialized tech support to maintain these systems.
Many ERP systems have the unique selling point of instantly providing operational, performative and financial data.
Before the cloud’s growth, storage space and compute functions were limited by the hardware and software used in on-premises systems. Businesses couldn’t process and analyze big data as they now can by piggybacking on cloud providers’ vast servers.
ERP vendors will likely supply new or modify existing systems that rely more on the cloud to provide their customers with more use cases for their solutions.
Big data is not just for big companies. Low-code and no-code platforms like Integromat and Zapier let different apps talk to one another. Gather data from each app and analyze it via ERP AI and machine-learning tools.
ERP software records and stores real-time business performance data across departments within a company. You can generate reports from that data to analyze how well departments and individuals are doing. These insights can help businesses streamline processes and team members to operate more efficiently, increase productivity, preserve quality, and achieve profitable growth.
An ERP system can take the following forms:
ERPs share a common database, operate in real-time, and provide a standard user interface, depending on permission levels. You won’t have to maintain separate databases or periodically merge databases to generate reports.
ERPs constantly collect and compare departmental metrics. Users can create accurate reports on business performance based on the metrics they select – for example, how productively the team uses company resources.
Companies use ERP reports to do any of the below:
ERP systems generally feature some or all the following functions:
The 2022 ERP report reveals that the sectors most likely to invest in ERP systems include manufacturing (26.4%), information technology (17.1%), healthcare (13.6%) and construction (7.9%).
The three primary ERP solution types are on-premise, cloud-based and hybrid. However, there is a total of seven ERP types.
The coming decade will likely bring healthy overall growth in ERP usage across businesses as companies seek a competitive edge with improved efficiency and streamlined processes.
Investing in complete ERP systems may be economically prohibitive for some companies. It’s possible to replicate many ERP features with API plug-ins to get your existing business apps to speak with each other until you feel able to invest in an ERP solution.
Whichever route you take, ensure you’re clear about how you want to improve your business and use that as a starting point in your ERP planning.