Modern enterprise information systems are as crucial for business development as machines were essential for industrial revolutions at one time. Today, they provide a basis for the development of the world economy. Enterprise information systems, in turn, are based on ERPs.
Global practice shows that an ERP system can help significantly improve enterprise processes’ management and efficiency.
ERP systems are used to manage all the financial and economical company activities. They can provide the management with the information required for making decisions, as well as help build an infrastructure for data exchange between the enterprise, suppliers, and consumers.
ERP Market Share and Segment Forecasts
In 2022, the global ERP software market was valued at $54.76 billion. The compound annual growth rate is expected to amount to 11% from 2023 to 2030. The key reasons for such growth are the increasing demand for operational efficiency and business process transparency, the need to work with large amounts of data, the rising number of SMEs in developing economies, etc.
According to the deployment option, the on-premise segment held over 70% of the market share in 2022. But the cloud deployment segment is expected to dominate the market by 2030 due to its growing adoption.
In 2022, enterprises accounted for the largest share of over 39%; the largest 20% occurred in the manufacturing & services segment. As for regions, North America dominated the ERP software market with a share of over 35.0% in 2022. It is associated with the rising adoption of ERP systems by SMEs, increasing investments by ERP vendors in software development, and the presence of numerous market players. The Asia-pacific market is expected to grow due to the booming manufacturing sector and growing small and medium enterprises.
ERP Trends to Consider in 2023
Let’s glance into the future and see what’s on the horizon for ERP software and enterprise technology in 2023.
Shift to cloud-based ERP solutions
For a long time, companies did not recognize cloud solutions as secure due to storing all data on providers’ servers. This attitude contributed to low demand for cloud ERPs; organizations tried to use out-of-the-box software deployed in their own capacities.
Nowadays, the situation has changed, and cloud ERP systems have become much more popular due to the Covid-19 pandemic and moving to remote work. In addition, the increased demand for cloud ERPs is due to global market development. Cloud software is cheaper, its capabilities cover all company’s needs, and implementation projects don’t take much time. Moreover, you don’t need to keep your IT department.
IoT and massive data traffic boost ERP market development, providing new opportunities for automating workflow and improving operational efficiency. For example, retailers use warehouse management systems that collect data from mobile scanners and smart conveyors to track the movement of goods in the warehouse.
Sensors installed on production equipment can provide real-time data on the machine’s performance. Managers can review and interpret this information and schedule necessary maintenance activities conveniently without disrupting the work process. The integration of ERP and IoT allows organizations to use sensors to collect, evaluate, and analyze large amounts of data, automate operations, and reduce human error.
Personalization instead of standardization
The time when ERP solutions were challenging to adapt to the specific business needs of each is gradually becoming a thing of the past. Nowadays, organizations can benefit from cloud-based ERP platforms with simple customization and low-code solutions. There is also a growing range of ERPs tailored to the needs of specific business sectors.
Moreover, personalization also prepares ERP systems for the explosive demand for integration between a system and IoT, AI, and other technologies. This is because customization is the way in which ERP components can be seamlessly integrated with these innovations.
In addition to quick access to data, mobile ERPs can perform business transactions in real time. The impact of ERP mobilization on overall productivity is significant. For example, employees can perform work tasks from home due to access to all the necessary information and tools via their mobile devices.
ERP mobility also means a more accurate and convenient data collection process. Employees can receive and enter information into the system anytime and anywhere.
Integration with third-party software
Companies traditionally choose a single ERP system for the entire organization regardless of the number of branches, regional offices, subsidiaries, and their needs. But using a single ERP is often redundant in small divisions or units. Moreover, it can be accompanied by the following challenges:
- Different tasks and business processes
- Slow deployment
- Additional deployment and maintenance costs, etc.
Customizable ERP solutions can integrate third-party solutions that allow companies to add or remove features to their ERP system easily.
In a Nutshell
Nowadays, companies try to automate their business processes and provide customers with maximum convenience. That’s why ERP systems are becoming commonplace — even small companies are trying to benefit from them.
Further ERP development revolutionizes the way businesses manage their operations and continues to increase their efficiency. In 2023, a significant change is expected in the ERP solution key features and deployment methods. ERP will continue to evolve and create new technologies and operational workflows to stay ahead.