50 Critical ERP Statistics: 2020

Market Trends, Data and Analysis

July 16, 2020

An enterprise resource planning (ERP) system is the key to

integrating different business functions across an organization. The
widespread growth of ERP system adoption illustrates the
importance of ERP 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.

ERP Market Statistics

ERP is a core system for businesses, driven by market

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 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 towards
increased usage and global demand.

The ERP market remains in a phase of rapid expansion, with

total market size expected to exceed $49.5 billion by 2024.
In 2019, the global ERP software market grew by 9%, resulting
in a worldwide value of approximately $39 billion in total
software revenue.
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%.
The ERP market size in North America is worth over $10 billion.
Asia-Pacific is an emerging ERP market expected to achieve a
CAGR of 13.2% through 2026.
Global market growth is expected to increase at a CAGR of over
8.1% over 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

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 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 of distributors and manufacturers, 67%

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.
The top two problems noted during implementation were
inadequate testing and inadequate business process
reengineering.
After ERP implementation, 49% of companies said they
improved all business processes. Only 5% of business said they
did not improve business processes.
In a survey on ERP implementation, midsize companies with
$100 million to $250 million in revenue had the fastest
implementations at 6.6 months. Very large companies, over
$25 billion in revenue, took the longest at 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 allocated time – 13% went live
sooner than expected, 27% were a little late and 11% failed to

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 go live in the time allotted.
Expansion of the initial project scope was the primary reason
companies went over budget during implementation.

ERP ROI Statistics

Organizations use ERP to become more efficient and save 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%), improving 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

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 owning an ERP system is 2-3% of annual revenue.

ERP Usage Statistics

ERP adoption by industry varies, and organizations often 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.

In a survey of 255 companies looking to purchase ERP
software, 89% identified accounting as the most critical ERP
function. Other responses included inventory and distribution
(67%), CRM, sales (33%) and technology (21%).
Manufacturers represented the largest portion at 47% of
companies looking to purchase ERP software, followed by
distribution (18%) and services (12%).
Eighty-four percent of ERP users had an expected ERP spend
of less than 2% of annual income.
Forty percent of companies identified better functionality as
their primary reason for implementing an ERP system.
The biggest influencers in purchasing ERP software were
employees from finance and accounting (23%) and IT
department employees (23%).
In a survey of small businesses with 50–99 employees, 57.5%
strongly agreed on investing in cloud and hosted solutions.

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

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 network access. Statistics on the increase of cloud technology show
the dramatic growth of cloud applications as they relate to the ERP
market.

Forrester estimates that 2020 cloud subscriptions for business

applications will account for $170 billion in revenue.
Cloud-based ERP systems had a 20.7% 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 using SaaS, 21% using cloud ERP and only 15%
using on-premises.
Cloud deployments account for 44% of all implementation for
survey respondents in manufacturing and distribution.

ERP Trends
As business needs become more complex, ERP software is
advancing to meet the demand for more customizable features and
broader social integrations. Current ERP trends illustrate a shift
towards greater cloud adoption and intelligent systems that
streamline and automate processes.

By 2022, Gartner predicts that artificial intelligence (AI) will be

integrated into ERP systems by 65% of CIOs.
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.

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 Fifteen 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.

ERP Challenges
Common ERP challenges include poor project management, inability
to manage implementation costs and duration, internal resistance to
new systems, software integration issues and poor data quality.
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 states

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.
Fifty-one percent of companies experience operational
disruption when they go live.
System modifications needed to improve usability can cause
overspending 65% of the time.
The top three places ERP systems fall short for users is data
accuracy, user experience and analytics.

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 How to Succeed with ERP/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 CRM (customer relationship
management), 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 who 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.

NetSuite ERP
NetSuite is the #1 cloud ERP software solution serving small to
midsize businesses across all industries. NetSuite is the choice of
over 21,000 customers worldwide, offering a cloud-native ERP
system with built-in flexibility, commerce-ready applications and
data analytics.

Click here to learn how NetSuite ERP can take your organization to
the next level.

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