(In the digital age, companies need to make sure that all the different parts of their business can share information and create strategic plans from their data. This is where enterprise resource planning software(ERP) comes into play.
Whether in a small firm that is looking to grow or a huge corporation that needs to take control of its resources, ERP is a way of making sure that people at every level have the access they need to the same information. The right ERP solution can transform every area of a business, from inventory management and human resources right through to sales.
For some time the big names in this market have been SAP, Oracle and Microsoft, but the landscape is changing as cloud ERP offerings become more prominent. Adoption is high, and the signs point towards ERP being a central factor in most enterprise IT environments and IT strategies from now on.
Here are five important facts about ERP, how its adoption is growing and how new technologies are making it easier than ever to migrate to a new ERP solution.
ERP is a huge area of growth
The worldwide market for ERP is now worth over $25.4B (1), and is increasing year on year. New innovations in business IT are resulting in an increasing demand for software that meets the needs of the companies using it.
This growth is a part of the wider expansion of the global enterprise software market which is predicted to exceed $500B by 2022 (2). Within the enterprise software market, there are two segments which are outperforming all others when it comes to expansion; customer relationship management and ERP.
Everyone’s using it
ERP is hugely popular, with a majority of firms making use of it. In research conducted throughout 2016, Panorama Consulting found that 81% of organisations have implemented ERP software or are in the process of doing so (3). A further 14% are looking at which ERP software will suit their needs. The sector has moved beyond being a niche for large organisations with complex needs and has become the mainstream and accepted way of meeting the challenges a company faces.
It’s all in the cloud
The cloud is the future when it comes to ERP, as it is with many other areas of IT. The agility of cloud-based systems allows companies to move with the needs of their customers, and this versatility is driving growth in the sector and making it much more attractive. Eric Kimberling, of Panorama Consulting, points out that between 2015 and 2016 cloud ERP rose from an 11% market share to 27% (3). This rise is set to continue throughout 2017 as companies invest more in the development of cloud-based ERP software.
With the increase in agility that comes with the adoption of cloud-based ERP comes a reduction in costs. Research published by market analyst firm IDC asked a variety of companies for their top five reasons for moving to cloud ERP, and 40% of them said that reducing the total size of their IT budget was the major factor (4). Another 40% said that an improvement in the way in which their resources are utilised was the prime motivator for them.
Safety is still key
When companies in IDC’s recent CloudTrack Survey (4) were asked about the use of specific applications in the public cloud, they reported increased use across several application types, including ERP.
But when these firms were asked if they have any issues with using such software, security still came up as a major concern, something which points towards this being a problem that could affect the growth of cloud-based ERP. IDC’s research found that almost half (49%) of the businesses it spoke to cited security as their biggest concern when considering a move to a cloud-based system. Other worries included the way in which such a move will fit in with regulatory and compliance issues and whether or not cloud-based systems can deliver the kind of performance that each company needs.
In terms of the growth of ERP, the facts speak for themselves. A large majority of companies already have ERP deployments in place and nearly all others are looking at their options. The future is now not a decision about whether or not to make use of ERP, but simply how to go about it.
There are understandable concerns amongst some adopters, but these seem to be based more on the wider use of cloud technology and general security issues that are applicable across many areas of IT. ERP has firmly staked its claim as the central software stack in the business world and has become integral to any company that wants to take control of its resources and improve operations.