2024 ERP Statistics You Need to Know

Enterprise resource planning (ERP) software promises huge benefits, including better insights into inventory levels, business process improvements, and a sizable return on investment (ROI). But do supply chain management technologies like ERP software really live up to the hype? In most cases, the answer is a resounding yes. 

However, there are some challenges associated with implementing an on-premise or cloud-based ERP system. To determine whether an ERP solution is right for your business, you have to cut through the noise and look at the cold, hard facts. With that in mind, we’ve compiled five compelling ERP statistics to help you make an informed decision.

5 Key ERP Statistics

No matter what sector you operate in—whether it’s retail or the manufacturing industry—your ERP statistics will help you decide whether enterprise resource planning technology is a wise investment for your business. In addition to providing relevant statistics, we also outline why they matter and what these insights mean for your business.

70% of Large Businesses Use ERPs

One of the most interesting ERP statistics you should know is that more than two-thirds (70%) of large businesses use ERP technology. This statistic demonstrates that using enterprise resource planning software is no longer optional for large organizations. If your organization is growing fast, you need an ERP to keep pace with the competition and accelerate your business processes. 

However, the ERP software market isn’t just for big companies. Even small businesses can slash process times with ERP tech at their fingerprints. For instance, one study found that small businesses with ERP technology made decisions 36% faster than they did before adopting an enterprise resource planning solution. 

There are, then, significant ERP benefits, regardless of the size of your organization. However, it’s important to consider key variables such as your budget per user, cost of ownership, and the initial project scope before making ERP technology an investment priority. 

86% of Employees Want Better Tools

Factors like your average budget and the projected initial and long-term costs of ERP technology are important considerations. However, they are only part of the equation. 

You also need to think about whether your employees want and need an ERP. According to the Harvard Business Review, most employees want more resources to fulfill their work responsibilities.

HBR researchers found that 86% of workers believe they would benefit most from solutions that make information more accessible. An enterprise resource planning solution does just that. Leading ERPs replace multiple disparate applications, thereby unifying your business information and tearing down data silos.

Once you’ve implemented and configured your ERP, all the data your team needs will be at their fingertips. More importantly, employees from different departments can collaborate on documents and projects with ease, cutting down on resource waste and enabling them to meet tight deadlines. 

The Public Cloud ERP Market Is Growing at 15% Annually

The public cloud ERP industry is experiencing rapid market growth. According to Bloomberg, the market’s compound annual growth rate (CAGR) is 15%. If it continues growing at this pace, it will be valued at $73 billion in 2024.

What does this mean for you? It means there will be more options available in terms of ERP solutions and third-party add-on products. Third-party solutions are a critical part of the ERP ecosystem, allowing you to build on the capabilities of your platform and extend its service life. 

Through strategic investments in complementary software, you can condense your time to value and improve your ROI immensely. For instance, Cavallo offers a suite of solutions designed for Microsoft ERPs, specifically Dynamics GP and Dynamics 365 Business Central. Our products expand the functionality of these ERPs and give you more control over core processes. 

ERP Projects Take 3-9 Months to Complete 

On average, it takes small-to-mid-sized businesses 3–9 months to complete an ERP project. Large organizations may take 6-18 months to roll out their enterprise resource planning technology. Numerous factors influence total project time frames, including which ERP you implement, the skill of your IT team, and whether you bring in outside support.

Due to the variability involved, it is critical that you count the costs and clearly define your project scope before starting an implementation process. Put contingencies in place so you can overcome any delays or surprises that may arise along the way.

Even if you are confident in the abilities of your internal IT team, you should strongly consider working with an implementation partner. An ERP implementation specialist can provide valuable insights into the process and help you proactively mitigate the risks of a delay. 

40% of Businesses Achieve Reduced IT Costs

Investing in ERP technology is no small decision. To justify the endeavor, you need clear goals, a defined project scope, and a general idea of what sort of ROI you can expect. While each implementation process is unique, one of the most commonly reported ROIs is reduced IT costs. In fact, one of the ERP statistics that will make every budget-conscious decision-maker happy is that 40% of businesses achieve IT savings after an ERP deployment.

However, that’s not the only benefit you may reap. Roughly 38% of businesses also report reduced inventory levels, and 35% enjoy reduced cycle time. Decreasing inventory levels can improve business liquidity and agility, both of which are good for your long-term growth. 

Benefits of ERP Technology

As you can see from these ERP statistics, there is no question that there are both pros and cons to ERP technology. However, you can mitigate many of the negatives, such as hidden costs and long deployment timelines, by creating a sound implementation strategy. 

By proactively addressing the potential pitfalls of ERP technology, you can maximize your ROI. You can also unlock some powerful benefits, such as those outlined below. 

Enhanced Efficiency and Productivity

ERP systems automate daily tasks and business processes, reducing the need for manual intervention and minimizing the chances that one of your team members will make an error. By integrating different functions from across your organization into a single, unified system, you’ll gain much-needed visibility and nimbleness

From the perspective of individual team members, what were once tedious tasks will become less taxing and easier to complete. In turn, your staff will have more time to focus on dynamic functions that deliver meaningful value for your business. 

Improved Decision Making

ERP technology can rapidly improve decision-making processes. In turn, you will no longer have to resort to guesswork and can instead support your choices using quantifiable data and real-time insights.

The best ERP solutions provide powerful analytics tools, too. Use these to guide your choices and then track the impacts of those decisions over time. If you make a misstep, you’ll be able to pivot and get your organization back on track. 

Cost Reduction

ERP systems help in reducing operational and administrative costs. By automating core business processes, your company can reduce the labor required for manual tasks, lowering overall operational expenses.

Many businesses also enjoy IT cost savings through consolidation and simplification. If you are currently juggling a dozen or more software licenses, switching to an ERP offers you the chance to unlock major savings and make life a whole lot simpler for your IT team. 

Streamlined Collaboration 

Do all your teams currently work from different applications? If so, they will be less prone to communicate and collaborate, as exchanging data is likely very tedious. 

With an ERP solution, you can remove data silos between departments by providing them with a single source of truth. Centralizing data ensures all of your departments work with the same information and can easily communicate to complete important projects. 

Scalability and Flexibility

Cloud-based ERP systems provide unprecedented scalability and flexibility. By moving from on-premise applications to a cloud-based ERP, you’ll achieve the adaptability necessary to grow your business. 

As your needs evolve, your ERP can change with you. For instance, many ERP providers are continuously revamping existing modules and exploring new add-on offerings meant to expand the capabilities of their platforms. 

Improved Compliance and Risk Management 

If you operate in a tightly regulated industry like healthcare, food and beverage products, or finance, it is vital that you have adequate visibility over your processes. ERP solutions provide just that. The right ERP can simplify compliance and support your risk management strategy, helping you minimize the likelihood of fines and other penalties.

The importance of proactive compliance and risk management cannot be overstated. Don’t wait until you are facing an audit to revamp your technology suite. Embrace an ERP and achieve the transparency necessary to create a compliant culture. 

Get More out of Your ERP with Strategic Partnerships

After familiarizing yourself with relevant ERP statistics, there is no denying the clear benefits that this technology provides. However, it is critical that you align yourself with industry partners who can support your short- and long-term business goals through the strategic use of technology. 

Distributors who want to make their ERP not just a single source of truth but a time-saving, data-rich, automated solution, need Cavallo. Our solutions put users in complete command of their operational processes from customer to cash, all designed with ease of use and efficiency in mind.

To learn more about the value you can expect from Cavallo’s products for Microsoft Dynamics 365 Business Central and Dynamics GP, download our free customer-to-cash guide to best practices to learn what your operation will look like at full efficiency and unlock your profit potential.