An enterprise resource planning (ERP) system is the key to integrating different business functions across an organization. Rather than data living in silos, it’s integrated into a single digital space so business platforms such as supply chain, customer relationship and financial management are all accessed from one portal, and the combined data is a single source of truth enterprise wide. The extensive growth of ERP system adoption illustrates its importance to successful businesses.
Why have ERP systems gained such popularity? Because a shared database of information for employees 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 is shifting rapidly. Cloud-based tools are opening the platforms to more businesses. Here are some statistics to help you glean insight into trends of ERP software.
ERP Market Statistics
A core system for businesses, ERP tools are driven by market characteristics such as widespread digital adoption, thriving global trade and vast amounts of data that need to be tracked, maintained and analyzed. ERP market statistics show the move 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 software revenue.
The ERP market remains in a phase of rapid expansion, with total market size expected to exceed $49.5 billion by 2025.
Revenue growth occurred for ERP in all areas in 2019, with strong growth for administrative ERP with financial management software (FMS) growth at 7% and human capital management (HCM) growth at 10%.
Defense & aerospace, retail and government utility sectors are driving a significant portion of ERP market growth.
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) of 9.8% through 2027.
Global market growth is expected to increase at a CAGR of over 8% in the next five years.
In a survey of IT decision-makers, 53% said ERP was an investment priority, 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 throughout the organization. Choosing the right vendor and assigning an internal implementation team increases the chance of project success.
Although ERP implementations can be challenging, data and statistics show many companies exceeding and even surpassing implementation efficiency expectations.
In a 2019 survey, 67% of distributors and manufacturers described their implementations as successful or very successful.
Companies that had very successful ERP implementations noted internal organizational elements like support from management, good change management programs and due diligence as primary reasons for success.
When asked what went wrong during implementation, only 12% of respondents noted poor quality of software.
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 $250 million in revenue had the fastest implementations at 6.7 months. Companies with over $25 billion in revenue took about 12.35 months.
Regarding implementation, minor customization was needed by 10% of respondents, some customization 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 allotted time, 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 over budget during implementation.
Nearly one-third of companies communicate about ERP implementation before selecting the product, 56% do it during the selection process and 13% share information right before going live.
ERP ROI Statistics
Organizations use ERP to become more efficient and cut costs. Statistics on ERP return on investment (ROI) highlight the benefits 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. Of that group, 82% achieved ROI in their expected time.
The top three benefits businesses said they gained from an ERP system are reduced process time, increased collaboration and a centralized data system.
An average for ROI time in a group of companies that implemented ERP was just over 2.5 years.
The top three business goals cited for implementation 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, the top three answers were reduced IT costs (40%), reduced inventory levels (38%) and reduced cycle time (35%).
For midsize companies — revenue under $1 billion — the cost of owning an ERP system is approximately 3-5% of annual revenue.
For large companies — revenue over $1 billion — the cost of owning an ERP system 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 ERP software.
Following manufacturers, distributors (18%), services (12%) and construction (4%) are the other industries most likely to use ERP software.
In a survey of companies looking to purchase ERP software, 89% identified accounting as the most critical ERP function. Other responses included inventory and distribution (67%), CRM and sales (33%) and technology (21%).
84% of ERP users had an expected ERP spend of less than 2% of annual income.
40% of companies identified better functionality as their primary reason for implementing an ERP system.
The biggest influencers in purchasing ERP software were finance and accounting (23%) and IT department employees (23%).
In an IDC survey of small businesses with 50–99 employees, 58% supported investing in cloud and hosted solutions.
ERP systems are an important investment and should be a top priority, according to 53% of IT decision makers in a recent 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 from on-premises technology to achieve business efficiencies, on-demand service, network elasticity and expanded network access. Statistics on the increase of cloud technology show the dramatic growth of cloud applications as they relate to the ERP market.
Forrester Research estimates that 2020 cloud subscriptions for business applications accounted for $170 billion in revenue.
The same study found that cloud-based ERP systems had a 21% enterprise application growth 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% use cloud ERP and only 15% using on-premises.
Cloud deployments account for 44% of all implementations for survey respondents in manufacturing and distribution.
More than half (53%) of organizations with ERP software use cloud-based solutions rather than on-premise enterprise platforms.
As business needs become more complex, ERP software is advancing to meet the demand for more customizable features and broader integrations. Current ERP trends illustrate a shift towards greater cloud adoption and intelligent systems that streamline and automate processes.
According to a Gartner report, by 2022, 65% of CIOs predict that artificial intelligence (AI) will be integrated into ERP systems.
53% of UK CIO's are looking for more intelligent ERP systems that include technology like machine learning, AI and automation.
CIO's listed predictive analytics and deep learning as the most critical ERP technologies to gain a competitive advantage.
15% percent of organizations plan to increase their Internet of Things (IoT) budget.
A broader move to more personalization across ERP systems leads 82% of UK CIO's to choose ERP systems with some customization or use UI overlays.
About 80% of IT developers say AI and machine learning will replace a considerable amount of ERP processes soon.
Yet only 10 percent of CIOs reported that AI and machine learning are a core part of their ERP.
A 2018 survey in the UK found that 53% of IT developers believe CRM and ERP systems should be a priority.
75% of CIOs say they are leveraging their ERP to engage customers in real time.
Poor project management, inability to manage implementation costs and duration, internal resistance to new systems, software integration issues and poor data quality are all common ERP challenges. These problems stem from unclear ERP implementation goals, choosing the wrong 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 and implementation 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 was initially budgeted.
Implementation can take 30% longer than anticipated.
51% of companies experience operational disruption when they go live.
System modifications needed to improve usability cause overspending 65% of the time.
The top three places ERP systems fall short for users is data accuracy, user experience and analytics.
The two most commonly cited challenges during implementation are insufficient 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 like accounting and human resources — but they also offer applications spanning customer relationship 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 that want access to ERP benefits such as increased efficiencies, cost savings and quick deployment times. Cloud deployment has opened the door for fast-growing organizations of all sizes, making ERP software available for big and small companies.
Grow Your Business With NetSuite ERP
NetSuite is the No. 1 cloud ERP software solution serving small to midsize businesses across all industries. NetSuite is the choice of over 28,000 customers worldwide, offering a cloud-native ERP system with built-in flexibility, commerce-ready applications and data analytics.
Maturing organizations will need more than spreadsheets to track and organize important business information. ERP systems integrate business software from across the company — including CRM, HCM, SCM and more — into one digital ecosystem. The market for ERP continues to grow at a remarkable pace thanks, in part, to the potential ROI, as well as cloud application and integrated machine learning and automation features. While implementation of a new ERP system can be a daunting task, selecting the right ERP partner can cut down on deployment time and eventually return dividends. NetSuite is the top cloud-based ERP platform for small and midsize businesses across all industries.
What is ERP in statistics?
ERP platforms are key for businesses to organize and integrate data from different areas of the company. Rather than existing in silos, data from sales, accounting, customer relationship, supply chain and more all reside in a single digital ecosystem. This enables greater statistical analysis than if you could only perform data dives on single topics. For example, you can explore how disruptions in supply chain impact revenue or examine how new hires affect the bottom line. There are many metrics you can track to monitor business performance using ERP platforms.
What percentage of companies use an ERP?
With the growth of cloud-based ERP platforms, more and more companies are implementing ERP solutions. However, the rate of adoption varies by industry. Manufacturers are the most likely to utilize ERP software. Generally, mid-size businesses that outgrow the limits of basic spreadsheets and entry-level accounting software are more likely to adopt ERP software.
What is ERP in data analytics?
ERP systems blend accounting and operational information beautifully. This opens analysis doors 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 and share that insight with executives. ERP platforms can help you clean, structure and mine your data for impactful insights.
What does ERP system mean?
Enterprise resource planning (ERP) systems are a suite of software platforms for your business. ERP platforms provide tools for things like accounting, human resources, supply chain, warehouse management and more. But rather than data from these disparate areas staying separate, it’s all integrated into one digital ecosystem. This allows you and your team to access all this information from a single sign on. It also allows you to see across departments and perform more robust data analysis. You can analyze how process improvements and other efficiency, sales or human resources efforts affect revenue and growth. Many of the largest and best-run businesses in the world use ERP tools. Thanks to cloud-based software and scale-as-you-grow accessibility, more small and mid-size businesses are 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, improve processes and interact with customers. Its market size is expected to near $50 billion annually by 2025. Dive deeper to learn more about trends, market growth, implementation and challenges.
annual growth in 2019
of organizations report their ERP projects as successful
Return on Investment
of companies saw process improvement from ERPs
Manufacturing companies are the most likely adopters of ERP
of enterprises with ERP use cloud-based solutions
of IT developers say AI and machine learning will replace business processes
challenges of implementation are insufficient testing and not enough process reengineering