The enterprise resource planning (ERP) software market


Businesses today must use several different software products to stay competitive. They help companies manage supply chain logistics, human resources, and customer relations. This can be done with a disjoint system made up of separate components, but that just complicates things. Enterprise Resource Planning (ERP) Software combines the functionality of several different software products, such as those used for HR, sales, manufacturing, and marketing, into a cohesive software system that is accessible to all relevant parts of an organization. These components also share a common database which ensures that all departments are on the same page.

enterprise resource planning software

ERP software brings together different software modules that are essential for business activities, such as operations and finance, using a universal interface. Typical modules included in ERP software are supply chain management, customer relationship management (CRM), accounting tools, and HR tools. ERP software brings together all the software tools needed to run a business in a single package. Additionally, ERP systems store business-related data in a central database, allowing it to be shared within an organization.

In the past, ERPs were generally only used by large companies. However, nowadays, ERPs can even be useful for small and medium-sized enterprises (SMEs). Before ERP software was created, another solution was created known as Material Requirements Planning (MRP) software. This software was used in manufacturing to plan the amount of material needed to maintain production levels and schedule deliveries. ERP systems evolved from this, but expanded to include business aspects outside of manufacturing.

ERP features

A good ERP system should be automated to reduce errors. It should enable customizations, so businesses can add changes as their business grows or changes, and it should provide analytics for organizations to learn how they are performing. Here are some of the basic features you will find in most ERP software:

Abstract image of enterprise resource planning (ERP) software with HR and CRM modules on a tablet. Courtesy of Adobe.

Financial direction

ERP financial management modules store financial information from all relevant modules in one place to give companies a complete picture of their financial situation. This makes it easy to generate reports, such as profit and loss reports, and to create accurate forecasts.

Customer relationship management

CRM tools allow salespeople to respond effectively to customer needs. The CRM module that comes with an ERP system allows users to track all customer and sales data recorded by a business. This data helps sales and marketing strategically plan their engagement with customers.

Sales and Marketing

Sales and marketing helps businesses organize activities such as sales enquiries, quotes, and invoicing. These modules also include tools for calculating taxes and shipping costs. Metrics derived from this sales and marketing data can also be used by businesses to make critical changes if needed.

Human ressources

Human resources components can help streamline processes such as onboarding and time tracking. They can also play a role in payroll and sync with the finance module to show how HR practices affect the overall health of a business.

Supply chain management

Supply chain management tools allow companies to manage logistics, manufacturing statuses, supply and demand data, and distribution information in real time. This ensures that adjustments to issues with any of the supply chain links can be made quickly.


ERP software evolved from material requirements planning software and it shows. Many ERP systems come with manufacturing modules that help companies track product forecasts, material sourcing, and production. This module is usually tightly integrated with the Supply Chain Management module. It can also help businesses track inventory.

business intelligence

BI tools allow companies to monitor important metrics that help them see how well they are doing in critical areas, such as revenue. These tools generate reports and graphs that display information to help a business make changes to its processes if necessary.

ERP advantages

Let’s look at some specific benefits of using ERP software.

To augment

Managing all relevant business activities can be difficult for any business, and the problem only gets worse as the business grows. However, ERP systems automate processes to improve productivity. Departments also all have access to the same information, ensuring everyone is on the same page and redundancies are kept to a minimum.

Advanced reports

ERP systems help companies master their key indicators by giving them access to real-time data. This allows them to react quickly to changes in their business environment and market.

Easy access to information

Because the information is stored in a central database, departments can easily access the information they need. For example, members of the finance team should have access to all the financial information that will help them chart the course of a business. They have that with an ERP system.


Collaboration across departments is key, especially when working on large projects and with the rise of remote working. Since an ERP provides a central database, permission can be granted to all necessary members to view the data they need to work on projects together.


ERPs are composed of several applications or modules from which a company can choose according to its needs. This allows them to focus only on what they need, avoiding being distracted by unnecessary components. Even though the ERP system is made up of separate modules, each module is connected to a central database accessible to all relevant departments.

Data Security

ERP solutions allow strict control over who has access to the data. Additionally, due to the central nature of ERP systems, the likelihood of breaches due to multiple independent systems running is reduced.

ERP systems can be cloud-based or on-premises. Both options protect your data and ensure that it is backed up. With cloud-based options, your data is monitored by an extra pair of eyes as well as the company running the cloud server.

Process standardization

ERPs easily facilitate industry best practices. This lends itself to standardizing processes and reducing errors.

Easier to manage regulatory compliance

Depending on the sector in which your business operates, different regulations must be followed, and these are regularly updated. This can be difficult to track manually. ERP systems can take into account the regulations applicable to your industry, ensuring that your system is configured to comply with them.

ERP use cases

When deciding whether or not an ERP system is right for you, it’s worth considering a few ERP use cases:


Retailer Walmart achieves sales of approximately 500 billion dollars per year. It is a company that operates globally and has also focused on e-commerce.

To take full advantage of the digital age, Walmart has started a project with Microsoft Azure, which is Microsoft’s cloud platform. Two major objectives of this collaboration are:

western digital

Western Digital offers data storage solutions such as hard drives and flash memory. After merging with SanDisk and HGST in 2019, the company decided to go with Oracle ERP cloud at all levels. It was the best choice for Western Digitalas it is able to integrate the following into all three activities:

ERP market

The ERP market had a valuation of $35.81 billion in 2018, and it is expected to grow further. It is expected to reach $78.40 billion by 2026.

Companies are increasingly adopting ERPs to increase their operational efficiency. They recognize the need for data-driven decision making, which is easily facilitated by ERP software. These factors are helping to drive the growth of the market. However, mitigating factors include maintenance costs, which can be a detractor for some companies, and access to open source applications.

While North America dominates the overall market share, the Asia-Pacific market is expected to continue growing. In particular, SMEs in this region are turning to ERPs to effectively manage their businesses.

When it comes to industries, finance dominates the market share, but HR is growing rapidly and comes second. Other prevalent segments include supply chain management, customer management, inventory management, and manufacturing.

Additionally, the market is seeing a shift towards cloud implementations and the use of mobile applications. Cloud technology facilitates rapid scaling and reliability, while mobile apps allow businesses to operate more flexibly, including field workers.

Look forward

ERPs help companies link all of their important business processes. A single system manages important activities such as accounting, human resources, inventory management and customer relations.

The market is growing as businesses benefit from increased cross-departmental communication and efficiency as well as overall organizational productivity.

A point worth noting is the growth of the market due to increased use by SMEs. However, the cost of setting up an ERP can be a deterrent for many SMEs. ERP manufacturers are realizing this and are increasingly making their systems and pricing plans more modular. This makes it easy for companies to choose the modules they need.

If software vendors spend time understanding how SMBs can fully benefit from ERPs, the market might even exceed market projections.

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