ERP Software Market Size, Share & Trends Analysis Report By Deployment (On-premises, Cloud), By Function, By Enterprise Size, By Vertical, By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global ERP software market size was valued at USD 50.57 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 10.7% from 2022 to 2030. The growth is attributed to factors such as the growing need for operational efficiency and transparency in business processes, increasing demand for data-driven decision-making, and rising adoption of mobile and cloud applications. However, the increasing availability of open-source applications and higher initial investment and maintenance costs are expected to restrain the market growth.

The implementation of ERP software in organizations can reduce inventory costs by 25% – 30% and raw material costs by around 15%. The software ensures a smooth flow of cross-functional information, offering better productivity and decision-making. A rise in the number of SMEs in developing economies such as China, India, and Brazil is expected to boost product demand over the forecast period. The adoption of IT technologies in these economies is expected to change consumer behavior, leading to increased adoption of ERP software instead of manual operations.

Low infrastructure costs and the ability to integrate with mobile devices are expected to increase demand for cloud services. Enterprises are ready to invest in cloud-connected mobile applications to facilitate synchronization, update, and control of documents. An increase in demand for cloud-based ERP solutions since the COVID-19 pandemic, especially from small- and medium-sized businesses, is anticipated to offer various opportunities for the stakeholders in the market. Therefore, a surge in the adoption of cloud and mobile applications is propelling the growth of the ERP software market.

The increasing number of business applications and the growing size of data generated through different supply chains have enabled companies to deploy a centralized platform that manages all the operations. Additionally, the demand for ERP solutions has increased owing to rising automation and increasing technological deployments in the supply chain management process, thereby contributing to market growth.

Deployment Insights

The on-premises segment accounted for the largest share of over 70% of the market share in 2021. One of the major benefits of this deployment model is it offers continuous control and high security of data in any organization. A lack of awareness regarding the benefits of cloud-based solutions in business facilitates the adoption of on-premises solutions in several emerging countries. Moreover, extensive use of traditional approaches to managing the supply chain and other business operations with minimal automation and technological use is anticipated to drive segment growth.

The cloud segment is expected to dominate the market by 2030 owing to its increasing adoption. The cloud-based deployment of ERP software helps companies achieve immediacy, efficiency, optimization of resource planning activities, scalability, and accessibility. It also offers benefits such as faster implementation and lower initial investments. Moreover, the adoption of connected devices that effectively manage business operations and provide real-time insights allows business owners to opt for cloud-based ERP solutions to process excessive data efficiently.

Function Insights

The finance segment accounted for the largest share of over 28.0% of the market share in 2021. The ERP software helps manage various financial activities, including accounting, investments, assets management, and cash flow management. Therefore, the growing adoption of ERP in the financial function is expected to augment the growth of the segment over the forecast period.

The Human Resource (HR) segment accounted for a significant share of the market. The growth of the segment is majorly attributed to the rapid expansion of organizations, making it difficult to manage all the company processes. Moreover, increased demand for automation in HR processes is expected to propel the growth of the market over the forecast period.

The supply chain ERP module offers improved visibility of various supply chain operations and enhances efficiency, speed, and customer satisfaction. The rising adoption of ERP software in sales and distribution automation is anticipated to propel the growth of the market. Furthermore, growth in the e-commerce industry enables enterprises to opt for advanced solutions for managing supply chain operations effectively, thereby contributing to the growth of the segment.

Enterprise Size Insights

The large enterprises segment accounted for the largest share of over 39% of the market share in 2021. The increasing need of large enterprises to maintain and align complex processes such as production planning, inventory management, procurement, order fulfillment, and shipping is one of the key factors driving the growth of the segment.  Additionally, the high spending capacity of the large-sized enterprises on the implementation of modern technology and software solutions facilitates the adoption of cloud-based ERP software.

The medium enterprises segment is expected to witness a significant growth rate and dominate the market by 2030. Factors such as the availability of cloud-based ERP, increased operational efficiency, reduced production cost, and on-time product delivery are expected to augment the growth of the segment over the forecast period. Additionally, stringent government regulations have promoted various industries to utilize ERP software, which, in turn, has enhanced productivity and reduced the complexity of operations in multiple industries.

Vertical Insights

The manufacturing & services segment accounted for the largest share of over 20.0% of the market in 2021. In this segment, the ERP software helps monitor daily operations, track day-to-day performances, and manage customer services. Some of the other benefits of the software are ease of inventory management, production scheduling, and real-time data tracking. The increasing need to track vendor performance and enhance visibility throughout the supply chain enables manufacturers to opt for ERP solutions that assist them with efficient operations planning and management.

Mainstream manufacturing companies and ERP software vendors in North America and Europe are engaged in partnerships to enhance their productivity. Increasing automation and digital transformation processes across manufacturing industries in emerging countries of Asia Pacific is anticipated to offer numerous opportunities to ERP vendors in the market. Additionally, to make quick strategic decisions and enhance the productivity and profitability of the business, companies deploy ERP solutions to generate reports based on real-time insights into market conditions.

Regional Insights

North America dominated the market with a share of over 35.0% in 2021. The large share of this region is primarily attributed to the factors such as the rising adoption of ERP software by small & medium-sized companies, increasing investments by ERP vendors in the development of software with the latest technologies, and the presence of numerous market players. Additionally, increasing accessibility to ERP functions through smartphone applications is further anticipated to drive the market growth over the forecast period.

The Asia Pacific market is expected to grow owing to the booming manufacturing sector and growing small and medium enterprises. A large number of enterprises in the region have already implemented on-premises ERP solutions to improve the productivity and performance of their business. Moreover, the increasing number of start-ups and their rising demand for cloud-based solutions are further anticipated to boost the growth of the market. The government support for the implementation of IT infrastructure is expected to augment the demand for ERP software over the forecast period.

Key Companies & Market Share Insights

The market is fragmented with numerous companies operating worldwide. To stay competitive in the market, market players are pursuing a variety of growth strategies, including partnerships, strategic agreements and collaborations, mergers and acquisitions, and new product developments.

For instance, in 2020, Unit4, one of the ERP vendors, partnered with Embridge Consulting, a U.K.-based consulting firm, to offer SaaS-based ERP tools to small & medium-sized enterprises. Anticipation of the growing demands and development of new products integrated with the latest technologies were of key interest to the vendors. Some prominent players in the global ERP software market include:

• Hewlett-Packard Development Company, L.P.

• Epicor Software Corporation

• International Business Machines Corporation

• Infor Inc.

• NetSuite Inc.

• Microsoft Corporation

• SAP SE

• Oracle Corporation

• Unit4

• Sage Group, plc

 ERP Software Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional & country levels and provides an analysis of the latest trends and opportunities in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global ERP software market report based on deployment, function, enterprise size, vertical, and region:

• Deployment Outlook (Revenue, USD Million, 2017 - 2030)

  • On-premises

  • Cloud

• Function Outlook (Revenue, USD Million, 2017 - 2030)

  • Finance

  • HR

  • Supply Chain

  • Others

• Enterprise Size Outlook (Revenue, USD Million, 2017 - 2030)

  • Large Enterprises

  • Medium Enterprises

  • Small Enterprises

• Vertical Outlook (Revenue, USD Million, 2017 - 2030)

  • Manufacturing & Services

  • BFSI

  • Healthcare

  • Retail

  • Government

  • Aerospace & Defense

  • Telecom

  • Others

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • U.K.

    • France

  • Asia Pacific

    • China

    • Japan

    • India

  • South America

    • Brazil

  • Middle East and Africa