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ERP Software Spending Set to Top $41 Billion by 2020

Cloud and mobile technology expected to drive growth, report finds.

By University Alliance on June 12, 2015
ERP Software Market Projected to Exceed $41 Billion

The demand for enterprise resource planning (ERP) software is expected to increase in the coming years, with worldwide spending projected to hit almost $41.7 billion by 2020, according to a new report.

Industries related to aerospace and defense are likely to see accelerated growth rates in the adoption of ERP software, Allied Market Research noted in its March 2015 report, Global ERP Software Market – Size, Industry Analysis, Trends, Opportunities, Growth and Forecast, 2013-2020.

Enterprise resource planning software is designed to assist organizations in managing resources and integrating functions in order to improve efficiency. The input of data from all aspects of an operation – including research and development, sales, marketing, product planning, manufacturing and pricing – can facilitate communication and enable different departments to stay updated on business processes.

ERP software typically includes functions related to human resources, sales, finance and marketing. The finance function is predicted to significantly drive the global ERP software market by 2020, when it will represent almost one-third of overall revenue, Allied Market Research reported.

The shift from on-premise to cloud-based ERP software and the emergence of mobile ERP are also expected to push market growth.

Although on-premise ERP solutions will continue to account for the biggest portion of the market – an estimated 57% by 2020 – cloud-based software will experience a higher growth rate, the report found. Cloud ERP has a number of potential benefits, including increased flexibility, lower IT costs, easier deployment and increased scalability.

Cloud ERP software enables employees “to access information for critical business decisions anytime and anywhere,” Allied Market Research noted.

Mobile is also expected to be a popular addition in ERP software solutions given the prevalence of tablet computers and smartphones. The multinational IT firm Cisco has projected that mobile data traffic will increase 11-fold from 2013 to 2018, and the Allied Market Research report noted that leading vendors such as Microsoft and Oracle are introducing mobile-accessible ERP products.

Other key finding from the report include:

  • Accelerated growth rates in ERP adoption in the aerospace and defense sectors will be driven by the need for real-time data monitoring.
  • ERP adoption will increase among mid-sized organizations as they seek to lower operating costs and track information in real time.

The Asia-Pacific region will be among the most profitable markets through the end of the decade, with ERP software spending forecast to surpass $9.7 billion by 2020.

Category: 2015 Headlines