60 Must-Know ERP Statistics Before Making a Buying Decision

Enterprise resource planning (ERP) solution is a key requirement for every business process. These solutions are widely used in organizations to plan and manage various manufacturing, financial, supply chain, and other core processes.

Starting back in 1992, the ERP system was developed by IBM Engineers, and now with time, it has been a part of the intensely competitive market. Its integration with cloud computation has made a remarkable change to business function making it easy to use.

60 must-know ERP statistics 

It's quite confusing for any organization to decide the best ERP that can fulfill its purpose. As there are varieties of ERP solutions available in the marketplace, one should know how to choose the perfect one and use it correctly.

This article will guide you with the essential ERP statistics that will help you make your organization's best decision.

General ERP statistics

Earlier ERP systems were intended only for large scale manufacturing companies for maintaining their processes at ease. But now, ERP systems are essential for all types of organizations. Along with large scale organizations, small and mid scaled firms are also looking for ERP solutions to manage their operations. The ERP general statistics show the global demand for ERP systems in the current market scenario.

• The worldwide ERP software market per year is more than $25Billion, which grows 10-20% every year.
• 53% of businesses believe ERP is one of the priority sectors for investments.
• The global ERP software market is projected to reach $78.40 billion by 2026, growing at a CAGR of 10.2% from 2019 to 2026.
• The average budget per user for ERP software is $9000.
• By 2021, the aerospace and defense industries will have experienced the highest ERP software adoption growth rate.

• 62.7% of organizations go with cloud-based ERP systems over on-premise software.
• Only 5% of organizations use their ERP effectively to create and augment high-quality data, which is key to effective analytics and insights.
• Around 27% of business respondents are worried about a security breach when adopting an ERP solution.
• 50% of companies are soon acquiring, upgrading, or planning to update ERP systems soon.

ERP implementation statistics

Successful ERP implementation requires proper alignment of system requirements, user training, cost, and change management within the organization. It is obvious to face challenges in the early stage due to the change in the process. But working with it will simplify your process and make you feel easier. The ERP implementation statistics will help you learn the market trends for adapting it quickly and effectively.

• The top reasons to implement an ERP are increasing efficiency (35%) followed by cost advantage (29%).
• Two third of manufacturers and distributors say their implementations as successful or very successful.
• Homegrown systems are still prevalent, with 35% of organizations moving away from legacy systems.
  
  

  14%

  of organizations moved out of their legacy system to advanced ERP in 2019-2020..

  Source: Hubspot

• On average, 13% of organizations are upgrading their ERP systems in 2019-2020.
• 87% of companies seek guidance for ERP implementation on the whole. 67% seek guidance only for ERP planning.
• Regardless of the deployment method, most implementations cost 3-4 times than budgeted.
• On average, companies spend 17 weeks selecting ERPs.
• 29% of companies believe they face budget overrun with ERPs due to organizational issues.
• The biggest influencers in purchasing ERP software were employees from finance and accounting (23%) and IT department employees (23%).

ERP usage statistics

ERP usage varies with different organizations. This is due to the differences in practices and processes followed in various organizations. However, everyone needs a base idea about its performance and if it is worth using. The ERP usage statistics will help you know the trends much required to use your ERP effectively and check if you are not falling behind.

• 89% of companies identified accounting as the most critical ERP function. Other difficulties included inventory and distribution (67%), Customer relationship management (CRM), sales (33%), and technology (21%).
• 47% of ERP users are a part of the manufacturing sector.
  
  

  27%

  of of employees in an organization use the company's ERP system.

  Source: Softwarepath

• ERP reduces operational costs by 23% and administrative costs by 22%.
• 95% of businesses achieve major improvements after using ERP through reducing process times, increasing collaboration, and centralizing enterprise data.
• Modern ERP systems increase on-time deliveries by 24%.
• About 28% of organizations achieved ROI within a year, and over half (58%) did so in less than two years, but 15% took longer than three years.
• 57.5% of small businesses strongly agreed on investing in cloud and hosted solutions.
• 53% of organizations face problems with functional change with ERP, whereas only 44% face technical difficulties.
• 60% of people asked for ERP systems to generate reports directly, and nearly half (49%) use spreadsheets with data pulled from the record system.

Cloud technology statistics

Cloud technology is disrupting traditional software systems. The ERP system is also getting affected equally. The cloud-based software is transforming rapidly and helping organizations in boosting efficiency and providing on-demand service. It is more affordable, easy to install, and doesn't require a complex IT infrastructure. With this quick up-gradation in the software market, the cloud technology trends have affected the ERP market in making the software handier and effective.

• Forrester estimates that 2020 cloud subscriptions for business applications will account for $170 billion in revenue.
• The United States will be the largest geographic public cloud market with spending of $124.6 billion in 2019.
• Global cloud app spending will reach $226.9 billion, and cloud platform services will reach $70 billion by 2022.
• Panorama found nearly 90% of companies select a cloud-based ERP and opt for a SaaS model.

• The average business runs 38% of workloads in public and 41% in a private cloud.
• Almost 77% of organizations select on-premise softwares due to a lack of knowledge about cloud offerings.
• 42% of companies use multi-cloud. This helps them in faster data recovery and getting more cloud space.
• 32% of the total IT budget will be allocated to cloud computing by 2021.

ERP challenges statistics

There are various challenges seen with ERP systems that might force the organizations towards switching it. The general problem with ERP happens when you do not choose the right software for your organization. This ultimately leads you towards improper planning, high costs, and difficulties in functionality. Make sure you check the below statistics and choose your ERP system wisely.

• 50% of ERP implementations fail the first time around.
• On average, ERP implementations take 30% more time than estimated.
•  51-54% of companies experience operational disruption when they go live.
• The top 3 problems faced by users with current ERP systems are UX, data accuracy, and analytics.
• According to an Accenture CIO survey, 40% of UK CIOs surveyed do not find it easy to access, analyze, or even use enterprise and customer data for better decision making.
• 92% of current ERP systems represent a bottleneck for CIOs, often requiring manual/programmatic intervention to enable data sharing.
• Just 4% of ERPs support omnichannel and modern UI natively.
• Only 4% of ERPs are aligned with the cloud and provide modernization initiatives.

• Testing and other related processes can shoot up ERP projects' budget to 50% more than what was allotted.
• 44% of organizations say their ERP is inflexible and exploring options for extending it with a new system.

New trends with ERP

Advanced ERP systems are making themselves simpler for users. At the same time, they are upgrading their technologies to provide more accurate data and customizable features for different sectors. Check this section to know the latest technologies implanted with ERP systems and how is it working for other organizations.

• 40% of market leaders are looking for new technologies in an ERP system.
• The top-rated technologies that have been looked up are: AI (43%), IOT (40%), and Machine Learning (40%)
• 70% of back-office executives are looking for advanced automation in an ERP.
• 58% of developers have already integrated or are planning to integrate AI into their ERP software.

• 33% of businesses believe custom APIs are necessary to transform and extract ERP data.
• Adopting AI and Machine learning is the biggest challenge for businesses having transitioned from legacy systems.
• 44% of AI developers have already implemented AI to their workflows in ERP systems
• Intelligent technology was only a part of 4% of ERP solutions.
• In the UK, 53% of CIOs intend to extend their ERP applications with innovative, intelligent technologies

A good ERP is not just another software

ERP software solutions are the key to handle all your business processes and help your team members land on the same page. Its transformation from old legacy systems to cloud-based applications are making the business process simpler and super productive. Now, with these statistics, you know the benefits and drawbacks of an ERP system and make the right decision accordingly.

Worried about your ERP implementation being a disaster? Check out are article on how to avoid an ERP implementation disaster.