ERP Software Market Size, Share, Opportunities, COVID 19 Impact, And Trends By Function (Customer Relationship Management, Human Resource, Finance, Others), By Enterprise Size (Small And Medium, Large), By Deployment (Cloud, On-premise), By Industry Verticals (BFSI, Healthcare, Retail, IT And Telecom, Manufacturing, Others), And By Geography - Forecasts From 2022 To 2027

The ERP software market is estimated to grow at a CAGR of 5.93% to reach a market size of US$56.994 billion in 2027 from US$38.081 billion in 2020.

Enterprise resource planning (ERP) is a method in which computer technology is used throughout the organization and this technology is linked with some of the most important functions of an organization including accounting, HR, and customer relationships, among others. These tools are intended to facilitate decision-making, information sharing, and business planning for the overall departments of the organization. Also, this software enhances the operational efficiency of an organization as numerous system-integrated applications are used to manage the business and also to automate several back-office functions. ERP software is integrated with numerous facets of an operation, including product planning, manufacturing, development, and sales & marketing, into a single database, UI, and application. Additionally, these tools can offer automated reporting and synchronizations, which further helps the organizations to save time and resources as no separate databases or spreadsheets are required to be worked on and merged manually for reporting, thus increasing their demand across various industry verticals.

Furthermore, the growing need for boosting operational efficiency coupled with the transparency of organizations, along with the continuous evolution of regular business operations to data-driven operations, is also a key factor bolstering the demand for ERP software and adding to the market growth significantly. Similarly, a rapidly growing trend for cloud-based and mobile applications also provides an impetus for the market to grow shortly.

However, the market may be restrained by the fact that the availability of open-source applications is expected to hamper the adoption of paid tools and platforms which may inhibit the market growth to some extent during the coming years. Furthermore, high initial costs coupled with high maintenance costs are also considered to be one of the key factors due to which many companies are reluctant to adopt these solutions, thus slowing down the market growth during the coming years. Moreover, the growing adoption of these tools across small and medium enterprises due to growing data-driven operations and increasing budgets for the adoption of automated business processes is also anticipated to propel the opportunities for the market to grow during the next five years. Also, the economic benefits achieved by the application of these tools throughout the departments of the organization are a major factor that is projected to drive the market growth over five years.

The ERP software market has been segmented based on function, enterprise size, deployment, industry vertical, and geography. Based on function, the ERP software market has been segmented into customer relationship management, human resources, finance, and others. Based on enterprise size, the market has been divided into small and medium, and large enterprises. Based on deployment, the market has been segmented based on on-premise and cloud. Geographically, the ERP software market has been segmented into North America, South America, Europe, the Middle East, Africa, and the Asia Pacific.

Finance to hold a decent market share

Based on functionality, the finance segment is projected to hold a considerable share in the ERP market owing to the adoption of their finance modules across the organizations to maintain the complexities of the financial operations to achieve overall operational efficiency.  Furthermore, these tools provide numerous benefits for managing accounting activities, cash flows, and inventory, among other things, driving the growth of this segment in the coming years.

 The human resource segment is expected to grow significantly during the forecast period as organizations expand at the personnel level, increasing the complexities for HR activity management and thus positively impacting the growth of this segment in the coming years.

The manufacturing industry is also projected to hold a significant market share owing to the growth of various industries under this segment, such as automotive, consumer electronics, and pharma, among others. However, the recent advent of COVID-19 has led to a halt in the manufacturing activities across various industries, which is considered to retrain the growth of this segment over six to eight months.

 Cloud adoption will expand rapidly.

Based on deployment, the cloud deployment segment is anticipated to show significant growth throughout the forecast period. The major factors that supplement the growth of this segment include the low infrastructural investments along with the ability of these tools to integrate with mobile devices.

The on-premise segment is anticipated to hold a notable share throughout the forecast period owing to the numerous benefits of these solutions regarding 100% control and the security of the company’s crucial data.

North America to hold a significant share

The North American region is anticipated to hold a significant market share due to the presence of state-of-the-art infrastructure and rapid adoption of technology across all the industry verticals. Furthermore, the presence of key market players in the region also bolsters the growth of the ERP software market in North America during the next five years.

Recent Developments and expansions

• In May 2020, Pronexus LLC, a firm dealing in non-asset finance and accounting, announced its partnership with Oracle, to join the Oracle NetSuite Program and use its cloud-based ERP platform to gain visibility.
• To provide SaaS-based ERP products to small and medium-sized businesses, Unit4, one of the ERP providers, collaborated with Embridge Consulting, a consulting firm in the U.K., in 2020. The sellers' main interests were in anticipating the escalating demand and creating new items with the newest technologies.
• Unit4 announced the wide availability of ERPX in April 2021 for mid-market organizations and people-centric businesses to help them expand globally and provide manufacturing firms with powerful ERP tools for cost-cutting.
• In its product kinetic, Epicor reintroduced its integrated flagship manufacturing ERP tool in June 2021. The recently released solution offers a platform that is modernized and future-proof, along with an updated UX architecture and a new feature called upgraded Epicor Commerce Connect.

COVID-19 Impact on the ERP Software Market

The COVID-19 epidemic has affected business operations, including customer behaviour and operational aspects. The COVID-19 outbreak prompted manufacturers to abruptly change course, from dealing with rules governing remote labour to managing extreme demand fluctuations and shaky supply networks. To extend their manufacturing operations and simplify company functioning, businesses and organizations are utilizing ERP technologies. To combat the disruption brought on by COVID-19, businesses operating in a variety of industry verticals, including manufacturing, healthcare, IT, and telecommunications, have integrated solutions into their organizational architecture. For instance, Mar-Bal, Inc., a manufacturer of glass and plastic injection moulding, integrated manufacturing ERP technologies into its facility to manage inventories and monitor the most recent status of ongoing jobs, order status, and completion progress. With the help of this digital integration, the business kept its facilities operational throughout COVID-19.

ERP Software Market Scope:

Segmentation

• By Function
  • Customer Relationship Management
  • Human Resource
  • Finance
  • Others
• By Enterprise Size
  • Small and Medium
  • Large
• By Deployment
  • Cloud
  • On-premise
• By Industry Verticals
  • BFSI
  • Healthcare
  • Retail
  • IT and Telecom
  • Manufacturing
  • Others
•  By Geography
  • North America
    • USA
    • Canada
    • Mexico
  • South America
    • Brazil
    • Argentina
    • Others
  • Europe
    • Germany
    • France
    • United Kingdom
    • Spain
    • Others
  • Middle East and Africa
    • Saudi Arabia
    • Israel
    • Others
  • Asia Pacific
    • China
    • Japan
    • South Korea
    • India
    • Indonesia
    • Taiwan
    • Others

Frequently Asked Questions (FAQs)

Q1. What will be the ERP software market size by 2027?
A1. The ERP software market is estimated to reach a value of US$56.994 billion by 2027. 

Q2. What is the size of the global ERP software market?
A2. ERP Software Market was valued at US$38.081 billion in 2020.  

Q3. What are the growth prospects for the ERP software market?
A3. The global ERP software market is estimated to grow at a CAGR of 5.93% over the forecast period. 

Q4. Which region holds the largest market share in the ERP software market?
A4. The North American region is anticipated to hold a significant share in the ERP software market.

Q5. What factors are anticipated to drive the ERP software market growth?
A5. The growing need for boosting operational efficiency coupled with transparency of the organizations along with the continuous evolution of regular business operations to data-driven operations is a key factor bolstering the demand for ERP software.