Enterprise Resource Planning (ERP) Software Market Size, Share & Industry Analysis, By Enterprise Type (Small & Medium Enterprises (SMEs) and Large Enterprises), By Deployment (Cloud & Hybrid and On-premise), By Business Function (Financial Management, Human Capital Management, Supply Chain Management, Customer Management and Others), By End-user (Manufacturing, BFSI, IT & Telecom, Retail & Consumer Goods, Healthcare & Life Sciences, Transportation & Logistics, Government, and Others), and Regional Forecast, 2024-2032

The global enterprise resource planning (ERP) software market size was valued at USD 71.41 billion in 2023. The market is projected to grow from USD 81.15 billion in 2024 to USD 238.79 billion by 2032, exhibiting a CAGR of 14.4% during the forecast period. Additionally, U.S. ERP software market is anticipated to grow significantly, reaching an estimated value of USD 32,405.4 million by 2032, as players are investing in research and development activities to develop enhanced ERP solutions.

In the scope of work, the report includes Enterprise Resource Planning software solutions provided by key players, such as Oracle Corporation, IBM Corporation, SAP SE, Workday, Inc., and Microsoft Corporation.

Enterprise Resource Planning software studies the unstructured and structured databases to visualize and provide insights based on correlation, hidden patterns, the market’s changing trends, and more. For instance,

• In July 2022, IFS introduced the IFS Assyst 11.5, an automated cloud solution, to help companies better manage their configuration management databases and provide total control of their IT infrastructure.

Organizations globally started investing in and implementing digital strategies to automate their business processes due to the COVID-19 pandemic and increasing digitalization of businesses. Moreover, rising number of favorable government policies for the implementation of digital technology software propelled the market growth. For instance,

• According to industry experts, the global digital transformation investment reached USD 1.5 trillion owing to a surge in investments by SMEs and large-scale organizations.

Latest Trends in ERP Software

Increasing Popularity of Two-Tier ERP to Augment Market Growth

Enterprises globally are adopting the two-tier ERP strategy as it helps them run two merged solutions simultaneously. Organizations are in need of a resilient system at the enterprise level, but also require a complementing solution for subsidiaries or worldwide locations. And due to this, the demand for two-tier ERP is increasing. For instance, manufacturing processes at a subsidiary might need a more specialized module, while the core ERP system maintains standardized processes. The two-tier strategy is adopted by enterprises for saving their time and reducing the cost over the one-tier approach as subsidiaries can reprocess the solution templates specified by headquarters, while developing the new solution. Then the focus can fall onto other work, such as specific country localizations.

The two-tier ERP system helps enterprises improve the back office processes at a site that works under a particular business model operated separately from the parent company. To minimize quality cost and tighten project schedules trailed by reduced budget, enterprises are replacing single-tier ERP systems with two-tier ERP systems. By configuring a two-tier ERP system, enterprises can control the performance with the existing one-tier ERP system.

The above factors are augmenting the market growth.

ERP Software Market Driving Factors

Growing Need to Improve Operational Efficiency and Streamline Business Processes among Enterprises to Drive Market Growth

The need for transparency and operational efficiency in business processes has forced companies operating globally to adopt various business models. Advancements in technology minimize the complexity of ERP software systems and allow third-party apps to conduct corporate processes more efficiently. For instance,

• According to a survey conducted by PwC, 80% of all CEOs believe that product commercialization will significantly influence their organizations and business models in the coming years.

Worldwide, companies are focused on enhancing their business processes to increase operational productivity, while keeping track of running costs. Organizations are looking for an integrated solution to handle various business operations, including sales & marketing, procurement, and supply chain management. The integration of an ERP software has simplified business operations, making them more efficient. Manual data entry is no longer necessary, allowing companies to see all the data on a single, uniform platform. This cloud-based software may make complex procedures, such as a multi-step production plan, easy and less tedious.

RESTRAINING FACTORS

Integration Issues With On-premises Deployment Models to Limit ERP Adoption

Organizations have started to integrate cloud Enterprise Resource Planning software and services. However, they still face substantial problems while integrating these solutions with their existing systems due to high implementation costs and system complexity. The existing legacy systems must be strongly linked with the new cloud-based ERP to be executed successfully. Due to lack of resources, a few companies continue to depend on their present systems, which are based on outdated technology. They include manual procedures that result in a longer turnaround time and a high possibility of mistakes.

ERP Software Market Segmentation Analysis

By Enterprise Type Analysis

Rising Demand for Resource Planning for Business Expansion by Large Enterprises Boosts Market Growth

Based on enterprise type, the market is segmented into Small & Medium Size Enterprise (SME) and large enterprises.

The large enterprises segment captured the maximum market share. Factors, such as increased operational efficiency, reduced production costs, and the central collection of data for wide distribution are expected to augment the demand for the product among large enterprises over the forecast period. For instance, SYSPRO software helps large enterprises manage global operations and multiple subsidiaries with scalable tools. Besides this, compliance with strict government rules has prompted the product’s adoption in several industries, thereby improving efficiency and minimizing operational complexities.

Furthermore, the SME segment is expected to record the highest CAGR during the forecast period. Cloud ERPs are being introduced to help SMEs simplify business processes and reduce their costs to remain competitive in the market. Also, expanding SMEs requires proper database management, which is expected to boost the product demand. For instance,

• As per industry experts, 92% of midsize enterprises are experiencing noteworthy revenue and market growth, and have either implemented or planned to implement ERP software.

By Deployment Analysis

Increased Demand for Cloud & Hybrid ERP Software with Enhanced Data Storage Will Drive Market Growth

Based on deployment, the market is segmented into cloud & hybrid and on-premise.

The cloud & hybrid segment is expected to account for the largest market share during the forecast period. Low infrastructure costs and the ability to integrate with mobile and tablet devices are projected to increase the global market share of the cloud segment over the forecast period. Cloud solutions enable businesses to store data over the internet and provide tools to restore data in the event of any data loss or breach. Hybrid helps increase the availability of big data through cloud computing, rising demand for better end-user experiences, and significant players investing in hybrid ERP solutions. For instance,

• February 2022: SAP SE and IBM Corporation partnered to shift their ERP software to the cloud. With this partnership, IBM offered SAP consumers access to SAP S/4HANA on the IBM cloud. SAP S/4HANA is a widely-used ERP solution for many organizations.

By Business Function Analysis

Use of ERP Solutions to Automate Business Processes and Strengthen Financial Transactions in Inventory & Work Management to Drive Market Growth

Based on business function, the market is segmented into financial management, human capital management, supply chain management, customer management, inventory & work order management, and others.

The inventory & work order management segment is expected to record the highest CAGR over the forecast period. The segment’s growth is mainly attributed to the increasing demand for these software to prioritize and coordinate work orders accurately and efficiently. Companies can manage the process of identifying and executing scheduled and urgent maintenance activities throughout an organization using an interactive work order management function from an ERP application.

The financial management segment accounts for the maximum revenue in the global market and is expected to maintain its dominance over the forecast period. The segment focuses on financial management features offered by the software. For example, financial management features from SAP SE’s suite offer streamlined financial processes and planning, budgeting, and forecasting capabilities, among others. Financial service providers now rely entirely on new, scalable systems to guarantee compliance with government data, operations, and accountability regulations.

By End-user Analysis

IT & Telecom Segment to Lead Due to Rising Popularity of ERP Technology to Increase Operational Efficiency

Based on end-user, the market is segmented into manufacturing, BFSI, IT & telecom, retail & consumer goods, healthcare & life sciences, transportation & logistics, government, and others (aerospace & defense).

The IT & telecom segment is expected to register the highest CAGR during the forecast period. ERP software helps streamline back-end office operations when incorporated over a single platform. It also helps improve communication across various channels and helps managers get a 360-degree view of the process. Hence, the increasing adoption of ERP software in IT & telecom is expected to enhance the market growth.

Moreover, the manufacturing segment captured a sizable portion of the global market. These solutions for manufacturing companies aim to use advanced features and functionality to optimize all facets of the manufacturing process. These facets range from sourcing and acquisition to development, storage, quality testing, and distribution. Therefore, such a solution for manufacturing can improve efficiency, reduce costs, and increase sales and profits.

Regional Analysis of ERP Software Market

Geographically, the market is segmented into five major regions: North America, Europe, Asia Pacific, the Middle East & Africa, and South America.

North America captured the largest market share due to the rising need to automate business functionalities through digital methods. In addition, key regional players are investing in research and development activities to develop enhanced ERP solutions. Moreover, rising investments in emerging technologies will enhance the product offerings in the region’s market. For instance,

• October 2022: SYSPRO ERP announced a partnership with SugarCRM to provide an all-inclusive product line for streamlining operations and enhancing revenue growth. The partnership incorporated ERP and CRM solutions for mid-market distributors and manufacturers.

Asia Pacific is expected to register the highest CAGR during the forecast period. This region's growth is mainly due to the continually evolving industry verticals, including manufacturing, BFSI, and transportation & logistics. For instance,

• January 2023: RIPL, in collaboration with ORGNN Technologies Pvt. Ltd., announced the launch of the FusionHub cloud ERP software in the Indian market. FusionHub Cloud ERP is a comprehensive business management software designed to assist enterprises in the engineering, architecture, and construction industries in handling various business functions, such as project management and human resources.

The market growth in Europe is mainly driven by rising technological advancements and the development of regional manufacturing companies. In addition, the organizational initiatives for digital transformation across various sectors will contribute to the growth of the market in the region. For instance,

• According to the European Commission, in 2021, 33% of small businesses and 81% of large enterprises implemented enterprise resource planning software tools.

Various factors, such as penetration of new industries and the development of the economy in the Middle East & Africa and South America led to the growth of the Enterprise Resource Planning software market share in 2021. Furthermore, due to the low cost of deployment and maintenance, firms in these regions are migrating from on-premises to cloud-based software.

Competitve Landscape

Strategic Acquisitions to Boost Market Expansion of Key Players

The key market players are offering ERP software across all business segments. They are also extending the scope to create novel solutions, upgrade their tools & technologies, and strengthen their technological capabilities. Also, through collaborations, companies are gaining expertise and expanding their business by reaching a larger customer base. The key players are focusing on market share expansion and customer reach through strategic acquisitions.

LIST OF KEY COMPANIES PROFILED:

• Oracle Corporation (U.S.)


• IBM Corporation (U.S.)


• SAP SE (Germany)


• Workday, Inc. (U.S.)


• Microsoft Corporation (U.S.)


• Sage Group plc (U.K.)


• Infor (U.S.)


• Deltek (U.S.)


• Acumatica, Inc. (U.S.)


• Epicor (U.S.)

KEY ERP SOFTWARE INDUSTRY DEVELOPMENTS:

• February 2024: AwanBiru Technology entered a partnership with U.K.-based Sage Group PLC for promoting, distributing, marketing, and reselling the Sage X3 products and services in Malaysia.


• December 2023: The Finnish Defense Forces collaborated with Accenture for a digital transformation program designed to modernize its existing legacy ERP system. This program is expected to improve user experience, enhance system performance, and deliver advanced reporting & analytics capabilities.


• September 2023: SAP Africa extended its alliance with Microsoft to provide RISE with SAP to clientele across several global markets, along with Africa. It is a complete solution of ERP software and result-driven services intended to aid enterprises in transforming the core SAP ERP to the cloud, leveraging the cloud hosting abilities of hyper-scalers, such as Microsoft.


• May 2023: SAP, in partnership with IBM, extended its ERP offerings by incorporating the IBM Watson AI smarts into its ERP systems. IBM Watson will be integrated with various offerings, which includes its digital assistant SAP Start, which serves as a combined entry point into its cloud-based software.


• March 2023: SAP introduced new cloud ERP offerings for midsize enterprises. The new offering is specifically designed for midsize firms to allow them to enjoy the all-inclusive benefits of cloud ERP. The GROW with SAP offers features, tools, and services to simplify delivery at a fixed rate and assures customers of faster time to value their requirements.


• March 2023: Microsoft introduced Microsoft Dynamics 365, a copilot that comprises both ERP and CRM, and offers AI-powered, interactive assistance across various business functions. With the Dynamics 365 Copilot, enterprises can empower their employees with AI tools developed for sales, marketing, service, operations, and supply chain responsibilities.


• January 2023: Ramco Systems strengthened its 25-year association with Addison & Co., an exporter and manufacturer of metal cutting tools, by providing next-gen Enterprise Resource Planning (ERP) software to Addison & Co.


• July 2022: Infor collaborated with Syntellis, a supplier of enterprise resource solutions, to assist healthcare consumers in accessing the Syntellis Axiom Healthcare Suite. This suite offers EPM tools with data-driven insights for enhancing the company’s operations.

REPORT COVERAGE

The research report includes information about prominent regions across the globe to gain better knowledge of the market. Furthermore, it provides insights into the most recent industry trends and analyzes technologies that are being adopted quickly on a global scale. It also emphasizes some of the driving factors and restrictions, allowing the reader to obtain a thorough understanding of the market.

REPORT SCOPE & SEGMENTATION

ATTRIBUTE	DETAILS
Study Period	2019-2032
Base Year	2023
Estimated Year	2024
Forecast Period	2024-2032
Historical Period	2019-2022
Growth Rate	CAGR of 14.4% from 2024 to 2032
Unit	Value (USD Billion)
Segmentation	By Enterprise Type Small & Medium Enterprises (SMEs) Large Enterprises By Deployment Cloud & Hybrid On-premise By Business Function Financial Management Human Capital Management Supply Chain Management Customer Management Inventory & Work Order Management Others (Sourcing & Procurement) By End-user Manufacturing BFSI IT & Telecom Retail & Consumer Goods Healthcare & Life Sciences Transportation & Logistics Government Others (Aerospace & Defense) By Region North America (By Enterprise Type, Deployment, Business Function, End-user, and Country) U.S. (By Business Function) Canada (By Business Function) Mexico (By Business Function) Europe (By Enterprise Type, Deployment, Business Function, End-user, and Country) Germany (By Business Function) U.K. (By Business Function) Russia (By Business Function) France (By Business Function) Italy (By Business Function) Spain (By Business Function) Benelux (By Business Function) Nordics (By Business Function) Rest of Europe Asia Pacific (By Enterprise Type, Deployment, Business Function, End-user, and Country) China (By Business Function) India (By Business Function) Japan (By Business Function) South Korea (By Business Function) ASEAN (By Business Function) Oceania (By Business Function) Rest of Asia Pacific Middle East & Africa (By Enterprise Type, Deployment, Business Function, End-user, and Country) Turkey (By Business Function) Israel (By Business Function) GCC (By Business Function) North Africa (By Business Function) South Africa (By Business Function) Rest of the Middle East & Africa South America (By Enterprise Type, Deployment, Business Function, End-user, and Country) Brazil (By Business Function) Argentina (By Business Function) Rest of South America