Future Trends in ERP Systems: Growth of Global ERP Software Market
The business world has been changing very fast. Fundamentally, these changes are carried by new technologies and practices. The past 10 years have introduced many new technological shifts inside the organizations. ERP is one of the biggest innovations in this digital revolution. It has transformed the working structure from top to bottom. Modern ERP systems not only minimize production costs but also ensure on-time delivery. That is the reason most companies intend to implement an ERP system inside their businesses.
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.
Smart ERP Solutions unify and standardize the business processes of the company across different departments. As a result, it has changed the way businesses perform today. Starting the journey in late 1960, ERP gets its official name and today’s structure in 1990. There are many major changes come in these years that shape the modern business model.
Today we’ll look at the history and evaluation of ERP as well as where the technology is headed in the upcoming years. And get a clear vision of future trends in ERP systems.
Evolution of ERP System
The concept of the ERP system was first raised in 1960, with the invention of inventory management and control. Since then, it goes through many technological and strategic advances over the last 60 years.
At the beginning of 1970, manufacturers were searching for a customized system. They wanted to operate their inventory more authentically. To help them out an automated inventory system named MRP (material requirement planning) was introduced. MRP was a perfect solution to control the inventory system in a disciplined way. At that time, it was implemented in shops, workshops, and other places where inventory was used for production or sale.
In this consequence, MRP II was developed in late 1980. For the first time, it integrated core manufacturing components into a common system. Likewise, it combined different parts of a business area including purchase, marketing, finance, accounting, project management, etc.
At that time, MRP helped the organizations to boost their work efficiency and productivity as well. The idea of the present ERP was originated there. Gartner Group used the term ERP (Enterprise resource planning) for the first time in 1990. ERP started to deploy all the areas of a business through a centralized database. This time, it incorporates human resources, customer management, production, and other departments of a business systematically.
History of Dynamic Revolution
With the growing usage of the internet, an ERP system is upgraded dramatically. After 2000, it became easy to collaborate among different parts and branches of a business. Organizations of all types and sizes climbed up and increased the revenue with ERP drastically.
Gradually, cloud-based ERP systems and open source ERP solutions are introduced to minimize the implementation cost and effortless performance. In 2015, experts introduced AI in ERP. People started using artificial intelligence tools to simplify daily challenges and solve complex workflow inside enterprises. Different AI tools are implied in ERP software such as interactive chatbots, intelligent process automation, and AI-infused financial planning.
Now, you’ll get a wide range of flexibility to customize your ERP system to satisfy specific demands for your business.
Recent Growth of ERP Solution
In this modern age, everyone intends to manage their business functions through a centralized and integrated system. From wholesale distributors to eCommerce business owners use ERP solutions. It helps them to keep track of all the components within a business.
According to a recent study, the global ERP software market was valued at $35.81 billion in 2018 and is projected to reach $78.40 billion by 2026, growing at a CAGR of 10.2% from 2019 to 2026.
Moreover, it ensures proper resource distribution to improve business ROI. You can also enhance your business productivity and reduce redundancy by deploying an automated system. It will increase the visibility of the operational data through a centralized database. These facets make ERP essential for all types of organizations.
ERP Solution At a Glance
ERP is an acronym for Enterprise Resource Planning. This refers to software and solutions to streamline all the processes within an organization. Also, you can use ERP to improve employee collaboration and production.
In short, ERP system is an integrated computer-based application. It manages all the core business functions and resources of manufacturing, productions, services, supply chain, and other processes inside an organization.
With ERP now, you can easily have a birds’-eye view of your company’s progress from anywhere. Plus, your employees get quick access to accurate information instantly. This enables them to make quick decisions, most importantly, improves work efficiency by breaking down all the barriers among business units.
Types of ERP Solution
There are different types of ERP software available in the market. Such as SaaS, Cloud, Open source, and many more. We have discussed the basic ERP-types below:
It serves the common functionality for all businesses. That’s why people call it “One-size-fits-all-industries” software. However, it requires more customization to meet specific industry or business requirements.
Generic ERP is mainly popular for its affordability. So, this type of ERP is suitable for start-up business who has a limited investment for business automation.
This type of ERP solution is specially designed to meet the specific demand of a particular business or industry. Such as Manufacturing ERP provides more details and advanced functionality for manufacturing-specific needs. It allows you to integrate your core business seamlessly with the manufacturing process.
Also, you have the flexibility to modify all the parts according to your business type. Though it is a little pricy, it helps you to get more profit by eliminating all the unnecessary costs.
This means configuring an ERP system in the office place after buying from any third party. On-premise ERP gives you complete control over the ERP. To set up the entire system you need an in-house expert IT team. They will create and customize the system according to your needs. However, it has both merits and demerits. You get the flexibility to modify the system with multiple attributes but you have to pay a physical property charge.
This type of ERP solution is hosted on a cloud computing platform within a company’s own data center. Unlike on-premises systems, Cloud ERP is a type of software as a service (SaaS). It increases accessibility via the internet. So you can share and transfer data across business departments, as well as externally, in real-time. Cloud-based ERP also reduces the hassle of physical storage. It provides backup and disaster recovery plans from providers to reduce interruptions to the system.
Open source ERP allows a high-end control and the right to select required add-ons. You will get the source code, so you do not have to wait for the vendor. It is free of cost. Licensing will charge you nothing. Open-source ERP allows small businesses to cope with tech advances. It involves a low price for ERP but needs an IT team.
ERP Connects All Departments Inside a Business
The optimized ERP integrates all the parts of a company on a common platform including HRM, finance, inventory, sales, client dealing, and others. Besides, a devoted database matches all the data and fosters them throughout the company.
An ERP software will automate your business process, increase production speed, minimize errors, reduce wastage, and so forth. In addition, individual ERP applications make your business profitable by eliminating redundant processes. Therefore it will lower your overall business cost dramatically.
An ERP gives a complete picture that answers all the what, when, who, why, and how in a business’s day-to-day activities. Also, by having an ERP system, you can keep all your organisation’s crucial data in one place. It ensures all the information is safe, organised, and accessible.
Furthermore, it allows all departments to use the same system and data. So transactions become easier between different departments. And your employees can share and use data in a synchronized way.
For instance, with a smart ERP solution, your sales orders will forward to the financial department without any manual re-keying. Now, the order management section will process the order more quickly and accurately. Hence, the finance department can close the deal faster.
What ERP Users Should Aware About Future Trends in ERP Systems
In recent times, all types of company big and small used ERP systems. As it can manage your day-to-day activities through a centralized database. So, it will minimize the use of too many different software packages and databases.
There is less risk about data security or redundancy. Because all the data is compiled, stored, shared and accessed through an integrated single system.
With ERP, you can operate your business functions from anywhere in the world. It encourages online entrepreneurs to apply an integrated system into their business besides physical business owners.
However, you have to invest a handsome amount, great effort, and dedicated team members to get an ERP system for your business. So the final decision should depend on your organization’s size, type, and other requirements.
Perhaps ERP software has many uses for businesses. Let see how it can boost your profit margin in an organized way.
Modern ERP Features:
- Smart monitoring from top to bottom
- Ensure transparency through the organization
- Simplified compliance and risk management
- Unify all the fragmented system of an organization
- Employees can utilize the time more efficiently
- A central database upgrades the analytics and reporting
- Information is easier to retrieve through the central database
- Improved team collaboration keeping all the data at one platform
- Optimized production planning and resource management
To keep up with the pace of your competitor, you need a smart ERP solution for your business. You can hire a renowned vendor or build an in-house team to build a specified system. But before integration you should consider the following aspects:
- Size of the company
- Company type and requirements
- Industry specifications
- Company budget and future goal
- ERP modules and features
- Vendor’s expertise and further support
You have to find out first what type of functions you require for your business. Then match it with your company goal. And according to your need, deploy an ERP system on-premises, cloud-based, or in a hybrid combination of both.
Let’s walk you through the future trends in ERP systems hence you can prepare your business blueprint considering those factors.
Future Trends of ERP Systems Will Facilitate Its Users More Efficiently
Technological advancements are riding at a breakneck speed. So, it is important to embrace new technologies and trends in your business strategy as well. In that sense, ERP systems have a lot to adapt that can meet your future manufacturing needs. Moreover, it should support more features and customization options with significant extensions.
The cloud ERP market is projected to grow from $18.5 billion in 2016 to $29.8 billion in 2021, as more companies look beyond on-premises solutions.
Reasons you should also consider Modern ERP for your next stop:
- People are more likely to shift from integrated software to cloud based ERP for its user-friendliness
- Take special care of inventory controls and cost calculations
- Having functions beyond Siri and Alexa
- Streamline production by identifying errors on the spot
- Mobile apps helps minimize line problems instantly and wastage of resources
- Enables managers regulate changes off-site and on the spot
- Provide flexibility to create new product categories and promote the growth of sales
- Leverage a new tier of interconnection between core business processes, external data, third party applications and IoT devices.
What’s Next in ERP: Possible Innovation in the ERP Industry
Like the other software branches, the ERP is also moving to the new limit. As a middle-aged software, ERP has a lot to achieve. With the tech growth, businesses are experiencing a high-level show that they have never before. Now the software runs alongside the corporates.
ERP makes your business free from the office limit and keeps you linked anytime and from anywhere. With the adaptation of new technology, ERP can reach the top of progress. There are so many progress options for ERP in the future. In my sense, I pick up the top three of them.
The Analytics of Big Data
The success of a company depends on fiscal and operative data. But many of them were unutilized in the past. So, the company may lose a few chances to improve and make a profit out of them. On this internet depend time, all the data from a machine, utility, and access system can easily capture in ERP. The use of these data with the business to make decisions can make a company gainful. Therefore, it might be a good scope for ERP.
Age of Context
We live in a world that surrounds by tech-savvy products. In this way, the ERP may integrate more with PCs and Mobiles to serve our needs. We can also take benefits by using the prospect of these high-tech items. A quick example can be like when selecting a plumber to send a client site, he will receive a message that contains the available inventory for the task.
Internet of Things (IoT)
In the past, most of the production machine’s data were unused to decide the commercial growth. But it consists a major part of business cost saving which help in progress. Internet of Things captures data of all industrial machines and vehicles without human contact. If IoT adds with ERP, the decision-making is simple. So you can easily detect the routes to cut the unused cost and improve the use.
Opening Business to Innovation
Business growth is partial till you are not open to the invention. The newer concept like IoT and big data analytics opens the limit. With them, the business can grow to a higher mark. Now a company must update itself and its staff with new tech trends. The companies can save their asset and time by adopting the new concepts.
What Can You Expect from the Future Trends of ERP Systems
From history, we see that the company cannot last long without adapting to the trend. When it comes to ERP, it is even appropriate. Soon you adopt a new thing, you are a step ahead of the others. As tech-savvy, the experts might guess some changes in ERP industries in the upcoming days. Here are a few of them:
All in the Cloud
In the last few decades, ERP is focused on an onsite server. It costs a lot for the expensive setup, maintenance, and upgrade. In recent times, cloud-based services get a huge attraction among users as all the charges go to the vendor side. And the vendor changes a small amount for high-end service. The good thing about cloud-based ERP is people have to pay only for the module they want.
The Popularity of AI in ERP
People like tech products that understand their needs. At this point, the future ERP will be a mix of intelligence.
The ERP will help companies to evaluate the large and complex data they need. So the staff can engage them in the advancement of the company.
Advanced analytical Ability
It starts already and soon, ERP will help the companies to make data-driven decisions. The business can take vital fiscal and working decisions using the new form. The predictions will have less chance to get wrong.
Accurate and Precise Real-time Data
Smart business decisions are based on real-time data. ERP with IoT gives accurate and precise information that helps in decision-making. It will create a smooth link in the staff and management to advance the business.
Valuable Money Model
Finance is a vital part of a business. You can integrate the ERP Financial Module with any other operation of the business to get an overview. Then you can decide to cost cut or find a new investment scope.
User Friendly & Customization Options
The ERP should not be only the one-size-fits-all but also be friendly to its users. So you do not need extra investment in training your staff. Again, you do not need a specialist to run it. The customization is a suitable choice that helps you to make the ERP fit your need. It is adaptive and allows you to integrate the ERP with some advanced options from other vendors.
High-level ERP Security
Data safety in ERP is a prime event for the business. In earlier times, people have to bring patches in the flash drive to update security features. With a cloud system, it is now up to date routinely. So the data become safe than before.
Post COVID Effect on the ERP System
The business world is evolving so fast. Even before the COVID-19 pandemic, businesses got challenges to solve complex day-to-day challenges. However, this pandemic threw more significant challenges to businesses in terms of survival. To overcome the obstacles posed by the pandemic, you should plan for new practices emerging in the recovery.
This new situation makes another concept popular- “Work From Home”. By considering this fact your ERP system must have the capability to manage a remote team effectively.
WP ERP: Keeping up with the Future Trends of ERP Systems
For the fastest growth of your business, integrate a complete solution like WP ERP into your company. WP ERP is a complete package for making your office workflow smoother. This WordPress solution consists of HR Manager, CRM & Accounting tools to manage every part of your business. You have the flexibility to activate the modules based on your needs.
Key features of WP ERP:
- Open-source solution
- Three core modules: HR, CRM and Accounting
- Fully customizable
- 44+ currency support
- Full control over operations
Considering future trends in ERP systems, WP ERP brings some exciting features this year. Have a quick look at them:
- Advanced attendence system
- Multi-layer leave approval
- Quickbook integration
- Performance Management
- Appointment Management system
Also Read: How WP ERP is Planning to Make Your Work Better in 2023
Instead of having different solutions for your business, WP ERP brings everything under a digital roof. You can get the core WP ERP solution completely free. Besides, it has 20+ premium extensions to support your growing business seamlessly.
Re-shape the Business Trends Choosing the Right ERP Solution
Modern Enterprise Resource Planning (ERP) integrates all the business functions into a unified platform. It enables you to observe what’s happening inside your business from one platform. So, you get the chance to identify the gaps and fix them before any significant adverse.
However, it’s essential to focus on functionalities when selecting ERP software. These functionalities should be able to meet your current business processes. And the scope for extension is also crucial for your future business growth.
Do you want to add something that we may miss here? Then, do let us know your views in the comment section below.
Amazing blog on different types of ERP in detail. The content is so informative and helpful to learn more on evolution of ERP systems.
This blog has a list of all the major Future Trends in ERP Systems. The Growth of Global ERP Software Market is very well explained here.