Market Note: Enterprise Resource Planning
An enterprise resource planning (ERP) system is an integrated software suite that helps organizations manage and automate their core business processes. ERP systems provide a centralized platform for managing various functions, such as financial management, human capital management, supply chain management, manufacturing, customer relationship management, project management, and analytics and reporting. By integrating these disparate functions into a single system, ERP software enables organizations to streamline their operations, improve data visibility, and make more informed business decisions.
The components of an ERP system typically include modules for financial management, which handles general ledger, accounts payable and receivable, budgeting, and cash management; human capital management, which covers core HR functions, payroll, talent acquisition and management, and workforce management; supply chain management, which deals with procurement, inventory, logistics, and demand planning; manufacturing, which manages production planning, quality control, and product lifecycle management; customer relationship management, which handles sales, marketing, and customer service; project management, which covers project planning, resource allocation, and billing; and analytics and reporting, which provides tools for data visualization, business intelligence, and performance monitoring.
The global ERP software market is substantial and growing. According to recent market research, the global ERP software market size was valued at $46.84 billion in 2021 and is projected to reach $78.40 billion by 2028, growing at a Compound Annual Growth Rate (CAGR) of 6.7% during the forecast period. This growth is driven by factors such as the increasing adoption of cloud-based ERP solutions, the growing need for operational efficiency and transparency, the rising demand for data-driven decision making, and the rapid technological advancements in areas such as artificial intelligence, machine learning, and the Internet of Things.
The strategic planning assumptions (SPAs) provided in the previous report offer valuable insights into the future of the ERP industry, particularly in relation to the integration of artificial intelligence (AI) and related technologies. The SPAs suggest that AI will have a significant impact on various aspects of ERP systems, driving improvements in operational efficiency, automation, cybersecurity, customer experience, and industry-specific applications.
In terms of operational efficiency and automation, the SPAs indicate that a majority of organizations will have integrated AI-powered automation into their core business processes by 2026, resulting in increased operational efficiency and reduced costs. The hardware and infrastructure supporting ERP systems will also evolve, with the market for AI-optimized hardware expected to grow rapidly, and the adoption of advanced technologies like quantum computing and neuromorphic computing architectures enabling more powerful and efficient ERP systems.
Cybersecurity and risk management will be critical focus areas for ERP systems in the future, with AI-driven solutions helping organizations better detect and respond to security threats and manage regulatory compliance. The SPAs also suggest that AI will play a significant role in enhancing customer experience and engagement, with AI-powered chatbots, virtual assistants, and personalization engines becoming increasingly common.
Industry-specific applications of AI within ERP systems are expected to drive significant growth and innovation, with sectors such as healthcare, manufacturing, finance, and education poised to benefit from AI-driven tools and optimizations. Finally, the SPAs point to robust market growth and adoption, with the global market for AI-enabled enterprise software expected to surpass $100 billion by 2025.
Overall, the strategic planning assumptions paint a picture of an ERP industry that is rapidly evolving and embracing AI and related technologies to drive efficiency, innovation, and growth. As organizations look to upgrade their legacy systems and stay competitive in an increasingly digital landscape, the integration of AI capabilities into ERP systems will become a critical factor for success.
Appendix
Key Offerings:
SAP
SAP S/4HANA: Flagship ERP suite
SAP SuccessFactors: Human capital management
SAP Ariba: Procurement and supply chain management
SAP Customer Experience: Customer relationship management
Oracle
Oracle Cloud ERP: Cloud-based ERP suite
Oracle HCM Cloud: Human capital management
Oracle SCM Cloud: Supply chain management
Oracle CX Cloud: Customer experience management
Microsoft
Microsoft Dynamics 365: Cloud-based ERP and CRM suite
Microsoft Dynamics 365 Finance: Financial management
Microsoft Dynamics 365 Supply Chain Management: Supply chain management
Microsoft Dynamics 365 Human Resources: Human capital management
Infor
Infor CloudSuite: Industry-specific ERP solutions
Infor Human Capital Management: Human resource management
Infor Supply Chain Management: Supply chain optimization
Infor Customer Experience Suite: Customer relationship management
Sage
Sage X3: ERP solution for medium to large businesses
Sage Intacct: Cloud-based financial management
Sage People: Human resource management
Sage CRM: Customer relationship management
Workday
Workday Financial Management: Cloud-based financial management
Workday Human Capital Management: Human resource management
Workday Adaptive Planning: Financial planning and analysis
Workday Prism Analytics: Data insights and analytics
Epicor
Epicor ERP: Industry-specific ERP solutions
Epicor Human Capital Management: Human resource management
Epicor Supply Chain Management: Supply chain optimization
Epicor Customer Relationship Management: Customer engagement and analytics
IFS
IFS Applications: ERP suite for various industries
IFS Field Service Management: Service management and execution
IFS Customer Engagement: Customer relationship management
IFS Enterprise Operational Intelligence: Performance management and analytics
QAD
QAD Adaptive ERP: Cloud-based ERP for manufacturing
QAD Dynasys: Supply chain planning and optimization
QAD CEBOS: Quality management and compliance
QAD Precision: Global trade and transportation management
SYSPRO
SYSPRO ERP: ERP solution for manufacturing and distribution
SYSPRO Harmony: Social ERP platform for collaboration
SYSPRO Espresso: Mobile ERP solution
SYSPRO Analytics: Business intelligence and analytics