An enterprise resource planning (ERP) system is the key to integrating different businessfunctions across an organization. Rather than data living in silos, it’s integratedinto a single digital space so business platforms such as supply chain, customerrelationship and financial management are all accessed from one portal, and the combineddata is a single source of truth enterprise wide. The extensive growth of ERP systemadoption illustrates its importance to successful businesses.
Why have ERP systems gained such popularity? Because a shared database of information foremployees and decision-makers is a direct path to peak levels of business performance.
60 Critical ERP Statistics to Know
The technology, market forces and implementation driving ERP software and its growth isshifting rapidly. Cloud-based tools are opening the platforms to more businesses. Here aresome statistics to help you glean insight into trends of ERP software.
ERP Market Statistics
A core system for businesses, ERP tools are driven by marketcharacteristics such as widespread digital adoption, thriving global trade and vast amountsof data that need to be tracked, maintained and analyzed. ERP market statistics show themove toward increased usage and global demand.
In 2019, the global ERP software market grew by 9%,resulting in a worldwide value of approximately $39 billion in total softwarerevenue.
The ERP market remains in a phase of rapid expansion, with total market size expectedto exceed $49.5 billion by 2025.
Revenue growth occurred for ERP in all areas in 2019, with strong growth foradministrative ERP with financial management software (FMS)growth at 7% and human capital management (HCM) growth at 10%.
Defense & aerospace, retail andgovernment utility sectors are driving a significant portion of ERP marketgrowth.
The ERP market size in North America is worth over $10 billion.
Asia-Pacific is an emerging ERP market expected to achieve a compound annual growth rate (CAGR) of9.8% through 2027.
Global market growth is expected to increase at a CAGR of over 8% in the next fiveyears.
In a survey of IT decision-makers, 53% said ERP was an investmentpriority, in addition to CRM.
50% of companies are soon acquiring,upgrading or planning to update ERP systems soon.
The global ERP software market is expected to reach $78.4 billion by 2026.
ERP Implementation Statistics
To execute a successful ERP implementation,companies must have a clear vision of new system requirements to create alignment throughoutthe organization. Choosing the right vendor and assigning an internal implementation teamincreases the chance of project success.
Although ERP implementations can be challenging, data and statistics show many companiesexceeding and even surpassing implementation efficiency expectations.
In a 2019 survey, 67% of distributors andmanufacturers described their implementations as successful or verysuccessful.
Companies that had very successful ERP implementations noted internal organizationalelements like support from management, good change management programs and duediligence as primary reasons for success.
When asked what went wrong during implementation, only 12% of respondents noted poor quality ofsoftware.
After ERP implementation, 49% of companies said they improved all business processes.Only 5% of business said they didn’t see any improvement.
A 2020 report found that 93% of organizations report their ERP projects as successful.
In a survey on ERP implementation, midsize companies with $100 million to $250million in revenue had the fastest implementations at 6.7 months. Companies with over $25 billion inrevenue took about 12.35 months.
Regarding implementation, minor customization was needed by 10% of respondents, somecustomization was needed by 33% and significant customization was needed by 37%.
For a group of companies that underwent ERP implementation, nearly half (49%), went live in the allottedtime, 13% went live sooner than expected, 27% were a little late and 11%failed to go live in the time allotted.
Expansion of the initial project scope was the primary reason companies went overbudget during implementation.
Nearly one-third of companies communicate about ERP implementationbefore selecting the product, 56% do it during the selection process and 13% shareinformation right before going live.
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ERP ROI Statistics
Organizations use ERP to become more efficient and cut costs. Statistics on ERP return on investment (ROI) highlight thebenefits of the technology.
ERP implementation led to business process improvement for 95% of businesses.
In a study of companies implementing ERP, 85% had a projected timeline for ROI. Ofthat group, 82% achieved ROI in their expectedtime.
The top three benefits businesses said theygained from an ERP system are reduced process time, increased collaborationand a centralized data system.
An average for ROI time in a groupof companies that implemented ERP was just over 2.5 years.
The top three business goals cited forimplementation are achieving cost savings (46%), better performance metrics (46%)and improved efficiencies in business transactions (40%).
When asked to select areas where ERP produced ROI, thetop three answers were reduced IT costs (40%), reduced inventory levels (38%) andreduced cycle time (35%).
For midsize companies — revenue under $1 billion — the cost of owning anERP system is approximately 3-5% of annual revenue.
For large companies — revenue over $1 billion — the cost of owning an ERPsystem is 2-3% of annual revenue.
ERP Usage Statistics
ERP adoption by industry varies, and organizations use ERP systems for different reasons.Recent ERP usage statistics provide some insight into current usage trends.
Manufacturing companies are the No. 1 user of ERP software.
Manufacturers represented the largest portion at 47% of companies looking to purchase ERPsoftware.
Following manufacturers, distributors (18%), services (12%) and construction (4%) arethe other industries most likely to use ERP software.
In a survey of companies looking to purchase ERPsoftware, 89% identified accounting as the most critical ERP function. Otherresponses included inventory and distribution (67%), CRM and sales (33%) andtechnology (21%).
84% of ERP users had an expected ERP spend of less than 2% of annual income.
40% of companies identified betterfunctionality as their primary reason for implementing an ERP system.
The biggest influencers in purchasing ERP software werefinance and accounting (23%) and IT department employees (23%).
In an IDC survey of small businesses with 50–99 employees, 58% supportedinvesting incloud and hosted solutions.
ERP systems are an important investment and should be a top priority, according to 53% of IT decision makers in arecent survey.
On average, 26% of workers use their company’s ERP software.
Cloud Technology Statistics
Adoption of cloud technology continues to increase worldwide as businesses move fromon-premises technology to achieve business efficiencies, on-demand service, networkelasticity and expanded network access. Statistics on the increase of cloud technology showthe dramatic growth of cloud applications as they relate to the ERP market.
Forrester Research estimates that 2020 cloud subscriptions for business applicationsaccounted for $170 billion in revenue.
The same study found that cloud-based ERP systems had a 21% enterprise applicationgrowth rate in the public cloud in 2018.
By 2022, global cloud app spending will reach$226.9 billion and cloud platform services will reach $70 billion.
An international survey of ERP users indicated 64% of companies use SaaS, 21% usecloud ERP and only 15% using on-premises.
Cloud deployments account for 44% of all implementations forsurvey respondents in manufacturing and distribution.
More than half (53%) of organizations with ERPsoftware use cloud-based solutions rather than on-premise enterpriseplatforms.
ERP Trends
As business needs become more complex, ERP software is advancing to meet the demand for morecustomizable features and broader integrations. Current ERP trends illustrate a shifttowards greater cloud adoption and intelligent systems that streamline and automateprocesses.
According to a Gartner report, by 2022, 65%of CIOs predict that artificial intelligence (AI) will be integrated intoERP systems.
53% of UK CIO's are looking for moreintelligent ERP systems that include technology like machine learning, AI andautomation.
CIO's listed predictive analytics and deep learning as the most criticalERP technologies to gain a competitive advantage.
15% percent of organizations plan to increase their Internetof Things (IoT) budget.
A broader move to more personalization across ERP systems leads 82% of UK CIO's to choose ERPsystems with some customization or use UI overlays.
About 80% of IT developers say AI and machine learning will replacea considerable amount of ERP processes soon.
Yet only 10 percent of CIOs reported that AIand machine learning are a core part of their ERP.
A 2018 survey in the UK found that 53% of IT developers believe CRM andERP systems should be a priority.
75% of CIOs say they are leveragingtheir ERP to engage customers in real time.
ERP Challenges
Poor project management, inability to manage implementation costs and duration, internalresistance to new systems, software integration issues and poor data quality are all common ERPchallenges. These problems stem from unclear ERP implementation goals, choosing thewrong ERP vendor and purchasing software that's not right for your company.
An ERP system can supercharge your business, but you must choose the right platform andimplementation team to avoid becoming another unfortunate ERP statistic.
Data collected over the years on ERP implementations found that 50% fail the first time around.
Most implementations cost three to four times what wasinitially budgeted.
Implementation can take 30% longer than anticipated.
51% of companies experience operationaldisruption when they go live.
System modifications needed to improve usability cause overspending 65% of the time.
The top three places ERP systems fallshort for users is data accuracy, user experience and analytics.
The two most commonly cited challenges during implementation areinsufficient testing and not enough process reengineering.
Choosing the Right ERP Partner
The best ERP partners will offer a suite of services that cover enterprise basics likeaccounting and human resources — but they also offer applications spanning customerrelationship management (CRM), human capital management (HCM), product lifecycle management(PLM), supply chain management (SCM), warehouse management systems (WMS) and more.
Cloud-native ERP systems with advanced technologies suit forward-thinking organizations thatwant access to ERP benefits such as increased efficiencies, costsavings and quick deployment times. Cloud deployment has opened the door for fast-growingorganizations of all sizes, making ERP software available for big and small companies.
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Conclusion
Maturing organizations will need more than spreadsheets to track and organize importantbusiness information. ERP systems integrate business software from across the company— including CRM, HCM, SCM and more — into one digital ecosystem. The market forERP continues to grow at a remarkable pace thanks, in part, to the potential ROI, as well ascloud application and integrated machine learning and automation features. Whileimplementation of a new ERP system can be a daunting task, selecting the right ERP partnercan cut down on deployment time and eventually return dividends. NetSuite is the topcloud-based ERP platform for small and midsize businesses across all industries.
FAQ
What is ERP in statistics?
ERP platforms are key for businesses to organize and integrate data from different areas ofthe company. Rather than existing in silos, data from sales, accounting, customerrelationship, supply chain and more all reside in a single digital ecosystem. This enablesgreater statistical analysis than if you could only perform data dives on single topics. Forexample, you can explore how disruptions in supply chain impact revenue or examine how newhires affect the bottom line. There are many metrics you can track to monitor businessperformance using ERP platforms.
What percentage of companies use an ERP?
With the growth of cloud-based ERP platforms, more and more companies are implementing ERPsolutions. However, the rate of adoption varies by industry. Manufacturers are the mostlikely to utilize ERP software. Generally, mid-size businesses that outgrow the limits ofbasic spreadsheets and entry-level accounting software are more likely to adopt ERPsoftware.
What is ERP in data analytics?
ERP systems blend accounting and operational information beautifully. This opens analysisdoors that otherwise would be closed. By combining this data into a single source,you’re able to examine past and present information to help predict future states.Simple-to-read dashboards can serve up visuals to improve understanding on performance andshare that insight with executives. ERP platforms can help you clean, structure and mineyour data for impactful insights.
What does ERP system mean?
Enterprise resource planning (ERP) systems are a suite of software platforms for yourbusiness. ERP platforms provide tools for things like accounting, human resources, supplychain, warehouse management and more. But rather than data from these disparate areasstaying separate, it’s all integrated into one digital ecosystem. This allows you andyour team to access all this information from a single sign on. It also allows you to seeacross departments and perform more robust data analysis. You can analyze how processimprovements and other efficiency, sales or human resources efforts affect revenue andgrowth. Many of the largest and best-run businesses in the world use ERP tools. Thanks tocloud-based software and scale-as-you-grow accessibility, more small and mid-size businessesare taking advantage of ERP, as well.
The State of ERP
More and more companies are taking advantage of enterprise resource planning (ERP) software.And more companies are leveraging its capabilities to find greater business success, improveprocesses and interact with customers. Its market size is expected to near $50 billionannually by 2025. Dive deeper to learn more about trends, market growth, implementation andchallenges.
ERP Market
9%
annual growth in 2019
ERP Implementation
93%
of organizations report their ERP projects as successful
Return on Investment
95%
of companies saw process improvement from ERPs
Usage
No. 1
Manufacturing companies are the most likely adopters of ERP
Cloud Technology
53%
of enterprises with ERP use cloud-based solutions
ERP Trends
85%
of IT developers say AI and machine learning will replace business processes
Challenges
Top 2
challenges of implementation are insufficient testing and not enough processreengineering
