ERP software market in India expected to reach $14.31 billion by 2026

India’s ERP software market size was valued at $5.6 billion in 2018 and is expected to reach $14.31 billion by 2026, registering a CAGR of 12.5% during the forecast period of 2019 to 2026.

Definition / Scope
Market Overview
Key Metrics
Market Risks
Market Trends
Industry Challenges
Technology Trends
Other Key Market Trends
Market Size and Forecast
Market Outlook
Technology Roadmap
Competitive Landscape
Competitive Factors
Key Market Players
Strategic Conclusion
References

Definition / Scope

ERP (Enterprise Resource Planning) is business process management software that allows an organization to use a system of integrated applications to manage the business and automate many back-office functions related to technology, services, and human resources.

The term ERP used to refer to how large organizations of the industrial type planned to use organizational wide resources.

ERP provides an integrated and continuously updated view of core business processes using common databases maintained by a database management system. ERP systems track business resources: cash, raw materials, production capacity, and the status of business commitments: orders, purchase orders, and payroll.

The applications that make up the system share data across various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the data. ERP facilitates information flow between all business functions and manages connections to outside stakeholders.

Enterprise Resource Planning or ERP has changed the way businesses are conducted all over the world, and India is no exception. In India, more and more organizations are integrating ERP solutions into their business for optimizing their resource utilization, ergo improving profits.

ERPs help associations to decrease general cost, at the same time expanding efficiency, enhancing reaction time, bringing down stock levels and improving for client introduction. It likewise helps in enhancing their administration and operational control.

Table: India ERP Software Market Key Segments

By Component	Software Service
By Business Function	Finance Human Resource (HR) Supply Chain Customer Management Inventory Management Manufacturing Module

Market Overview

India’s ERP software market size was valued at $5.6 billion in 2018 and is expected to reach $14.31 billion by 2026, registering a CAGR of 12.5% during the forecast period of 2019 to 2026.

The market made up roughly 15.6% of the Global ERP software market in 2018 and is estimated to contribute to a whopping 18.25% of global market share by 2026 and it’s said to be growing.

An increase in the adoption of ERP software to boost transparency and operational efficiency of organizations, the surge in demand for data-driven decision-making, as well as rise in the adoption of cloud and mobile applications are some of the important positive impacting factors on the growth of the ERP software market.

However, the availability of open source applications and higher investment and maintenance costs are expected to impact negatively on the market. Furthermore, an increase in demand for ERP among small & medium enterprises and technological advancements in ERP are providing ample opportunities for the ERP software market size growth.

The India ERP Software Market is segmented by component and business function. Based on components, the India ERP Software Market is categorized into the software and service.

By business function, the India ERP Software Market is divided into the Finance, Human Resource (HR), Supply Chain, Customer Management, Inventory Management, and Manufacturing Module. Software accounted for a higher value share for India’s ERP software market.

Likewise, the finance business function segment dominates the India ERP Software Market and is expected to retain its dominance throughout the forecast period (2019-2026).

The software segment is anticipated to dominate the India ERP Software Market and is expected to grow with a CAGR of 9.8% during the forecast period, accounting for around 57% of the overall market share by 2026.

However, with the support, maintenance, and upgrade making inroads around the world, the ERP software market is in the midst of dramatic migration. The service segment is expected to grow by 20.0 percent from 2019 to 2026 in India’s EPR software market.

The Indian cloud ERP market is comparatively less mature than other markets in the world but expected to grow in the future due to increasing demand from SME’s. The increased competition and globalization have become the key drivers for SMEs to deploy ERP in the cloud to minimize infrastructure costs.

The factors such as low IT manpower, low operational cost, data backup, and recovery and ubiquitous access are encouraging SMEs to move ERP on the cloud.

The key market players operating in India’s ERP software industry include Microsoft Corporation, IBM Corporation, Epicor Software Corporation, SageSoftware Inc, Oracle Corporation, Ramco Systems, SAP SE, and Amazon, and others. The other prominent companies are IFS, MYOB, Foradian Technologies and Workday.

Market Risks

Though the market for ERP seems to be growing, there are several issues and risks a market player has to contend with when implementing an ERP system. Some of these are:

Higher investment and maintenance costs:

The high initial investment and maintenance cost associated with buying an ERP software can be a major risk for potential players.
30% of ERP implementations take longer than originally estimated, and about 50% fail on the very first try.
ERP Implementation can cost up to 50% more of the budget because of the testing process and related activities such as support, maintenance, and upgrade expenses.

Additional Customization requirements:

ERP implementations take longer than expected, with the number of delays increasing from 59% to 79%. Customization can be problematic. Compared to the best-of-breed approach, ERP can be seen as meeting an organization’s lowest common denominator needs, forcing the organization to find workarounds to meet unique demands.
Re-engineering business processes to fit the ERP system may damage competitiveness or divert focus from other critical activities.

Extensive training requirements:

Extensive training requirements take resources from daily operations. 92% of ERP systems often require manual intervention for users to enable data sharing, making it difficult to achieve a unified data view for organizations.
51% of ERP system users reported that manual extraction is needed to reuse their data, while 33% reported that custom APIs are needed to extract their data. This makes it more complicated for users who have no technical expertise.

Top Market Opportunities

The most fundamental advantage of ERP is that the integration of a myriad of business processes saves time and expense. Management can make decisions faster and with fewer errors. Data becomes visible across the organization.

With the rise of SaaS, ERP programs have become more affordable, easier to implement, and simpler to maintain. This makes it faster for small businesses to get their share of the benefits that these tools have to offer.

Some of the top market opportunities are:

Increase in demand for ERP among small and medium enterprises:

ERP platforms are the most in-demand software for small and medium businesses, next to business management and marketing technology
With the introduction of low-cost ERP systems such as resource ERP, the smaller organizations also started benefiting from the advantages of this enormous business solution.
Owners of SMBs prefer using ERP systems instead of standalone solutions because it can reduce operation costs by 11%, standardize back-office processes by 77%, and give them real-time visibility into their data by 48%.

Cheaper hardware and software:

With the advances in technology, the costs of hardware in the form of servers, cables, switch, etc. and software like databases have come down.
Owners of SMBs prefer using ERP systems instead of standalone solutions because it can reduce operation costs by 11%, standardize back-office processes by 77%, and give them real-time visibility into their data by 48%.

E-commerce benefits:

This benefit will accrue from the close integration between large enterprises and SMEs.
96% of growing businesses who excel in their respective industries rely on an ERP system

Cheaper and faster Internet:

Easier access to the Internet reduces the operation costs further.
With the cheaper Internet access, ERP programs have become more affordable, easier to implement, and simpler to maintain.
This makes it faster for small businesses to get their share of the benefits that these tools have to offer.

Market Trends

The ERP market has grown significantly over the years, and it does not appear to be stopping any time soon. This can be attributed to the growing number of businesses that are discovering the versatility of this platform.

In recent years, ERP systems have expanded to cover a wide range of business processes that go beyond manufacturing. With this said, companies from various industries will be able to make use of these tools.

The market drivers behind it are:

Increase in need for operational efficiency & transparency in business processes:

An ERP system would allow enterprises to integrate their business functions. It would provide for a transactional system, which provides for legitimacy and transparency to each bit of statistical data.
Thus players would be able to increase their efficiency and productivity by implementing a suitable ERP system.
96% of growing businesses who excel in their respective industries rely on an ERP system
Owners of SMBs prefer using ERP systems instead of standalone solutions because it can reduce operation costs by 11%, standardize back-office processes by 77%, and give them real-time visibility into their data by 48%.

The surge in adoption of cloud & mobile applications:

The factors such as low IT manpower, low operational cost, data backup, and recovery and ubiquitous access are encouraging SMEs to move ERP on the cloud. Cloud-hosted ERP is cheaper than on-premise solutions by 30%.
73% of companies have at least one application already in the cloud. Another 17% plan to do the same in 2019.
As mobiles have become an integral part of working culture, the enterprises invest in cloud-connected mobile applications, as they allow access to information anytime and anywhere.
The cloud and mobile ERP adoption in the SME segment is expected to grow at a CAGR of 23% during the forecasted years.

The rise in demand for data-driven decision-making:

ERP provides a comprehensive enterprise view, making real-time information available to management anywhere, anytime to make proper decisions.
Small businesses experienced a 36% reduction in the time it takes to make decisions because of ERP software.
Management can make decisions faster and with fewer errors. It also enables sales forecasting, which allows inventory optimization.

Low level of Awareness:

There is a low level of awareness amongst players for ERP vendors, applications, etc. Most of the time they do not even know what ERP systems are and what they can do.
They consider ERP systems to be a magic wand, which will help solve all their business problems, be it in terms of quality, or process defects.
ERP brings in a more disciplined execution of business process giving more transparency and visibility to the working of the organization.

Perception:

SMEs have the perception that ERP is meant only for large firms mainly owing to the high costs of acquisition, implementation and maintenance as also the complexity.
Some of the SMEs even feel they do not need ERP.

Limited resources:

Harmonization of ERP systems can be a mammoth task (especially for big companies) and requires a lot of time, planning, and money.
Likewise, most SMEs do not have an in-house IT team. Due to this, they have to rely on external agencies to help them and this adds to the implementation costs.

Industry Challenges

The industry is being forced to evolve around the ever-changing needs of the consumer. Some of the challenges faced by South Africa’s fast-food market today are:

Change management:

One of the major reasons why ERP implementations nationwide have been known to fail is due to the implementation being considered as an automation project instead of one that involves change management.
This results in the system being put in place but not being used effectively due to people not ready to accept the change.

Availability of open-source applications:

ERP solutions presented by open-source vendors might not as sophisticated and rich in features as commercially available solutions. However, they are a major attraction for SMEs. These solutions are available for free or at very nominal prices, including documentation.
SMEs can transform their business with less effort and at a low cost which presents a challenge to commercially available ERP solutions. For example, OpenMFG ERP Suite by OpenMFG and the ERP suite by Compiere are open source ERP solutions.

Earlier Implementations:

SMEs have heard of the much-publicized failures in ERP: implementation, which has led firms to bankruptcy.
Some SMEs who have implemented ERP earlier have failed. This has led SMEs to believe that ERP implementations are a waste of time and effort and can even lead to the demise of the company.

Approach to implementation:

ERP vendors’ advice players to shape the business to ERP’s way of working, considering that ERP systems bring with its best business practices. As a result, players are having the entire ERP system customized to meet their requirements. This would increase the overall cost of implementation.
Critical challenges include disbanding the project team very quickly after implementation, interface issues, lack of proper testing, time zone limitations, stress, offshoring, people’s resistance to change, a short hyper-care period, and data cleansing.

Communication

Project communication is one of the topmost components for the success of any enterprise-wide application implementation.
Communication plan for the ERP Project should ideally be defined at a very initial stage, as to how the information will flow into and out of the project, clearly outlining the responsibilities and channels.

Technology Trends

The emerging technologies that are disrupting the ERP industry are artificial intelligence, machine learning, and the Internet of Things (IoT)
The ERP software industry is the number one target of artificial intelligence (AI) and machine learning (ML) developers.
Cloud computing is an emerging technology that allows enterprises to store and access data through the internet. Agility, scalability, reliability, and flexibility are some of the major characteristics of the cloud technology attributing to its popularity.
30% of all IT budgets are allocated to cloud computing this year, with the majority being SaaS (48%), IaaS (30%), and PaaS (21%).
Software as a service (SaaS) or on-demand is one of the service models of cloud computing based on the pay-per-use fee model.
An increase in technological innovations in other Asia-Pacific countries, such as China, Australia, and Singapore are expected to create several opportunities for the ERP software market. The integration of ERP with IoT-based devices allows organizations to identify and eliminate issues such as unnecessary assets.
Besides, automation of processes by IoT technology keeps the plant operations running on time without any human intervention.
Similarly, multiple benefits of integrating ERP software with wearable technology, such as real-time information transmission, minimized errors, real-time access to data, and faster decision-making create several opportunities for market growth.

Pricing Trends

ERP vendors’ offer different pricing plans for ERP implementation to attract SMEs, and the pricing is determined based on module specifications, the number of licenses, subscriptions, and annual support and upgrades. Recent ERP offerings in the cloud environment are attractive for SMEs, delivering a competitive advantage in a dynamically-expanding business environment.

Flexible Pricing Plans

The ERP system was considered to be very expensive earlier, but now low costing products are available as times have passed ERP vendors follow flexibility in pricing for their ERP products that are targeted towards the SME market. SMEs can buy the core solution as their immediate requirement and then buy add-on modules/components later on.
The ERP pricing options are even more attractive when hosted on the cloud. This flexibility allows SMEs to invest an affordable amount for selected components as and when required.
ERP vendors also offer prices of ERP solutions based on the number of client licenses, facilitating SMEs to invest in ERP according to their budget by buying the minimum number of licenses required.

ERP Financing for SMEs

Another pricing policy offered by some vendors is ERP financing for SMEs. Financing services make ERP an affordable solution, and SMEs can buy an ERP solution by financing it for a few years using well-defined monthly payments.
For example, SAP offers SMEs a financing scheme to cover major costs related to SAP implementation for up to seven years. These payments include the cost of SAP software, hardware, third-party software, customization, installation, and training.

Regulatory Trends

Government and large enterprises are investing a lot in cloud technology that will give a lot of opportunities to the vendors trying to enter the market. For instance, the Indian government has initiated a “Make in India” project to protect and help companies to start and improve in the latest technologies.
The government continues to support the ERP system’s development. Since 2001, the policy of using IT technologies to speed up industrialization has been widely implemented in India. At the same time, several large scale national projects on IT applications in industrial enterprises also have been launched. Moreover, SME as emerging market entities rise quickly and request new ERP solutions to meet their demands.
Furthermore, the government’s commitment to the development of technology infrastructure can also be seen from the Indian Industrial Master Plan from 2006-2020, coinciding with the country’s vision for 2020. For example, the government has implemented numerous policies and strategies under this plan which was formulated to enhance the growth of the industries through the entire value chain and to encourage cluster based industrial development.

Other Key Market Trends

Employee expectations around UX have changed drastically, driven by the infusion of consumer web designs in enterprise software. Enterprises have also woken up to the intangible costs of ignoring UX such as disenfranchising employees, adding to the workload, creating process fatigue and encouraging ungoverned ‘shadow IT’.

Mid-size businesses’ adoption of ERP software will grow at a CAGR of 7.9% from 2014 to 2020.

While on-premise ERP is still anticipated to gain a 57% grip on the industry by 2020, according to Allied Market research, cloud-based ERP is beginning to see greater investments.

ERP and CRM remain as the strongest types of business applications, with 53% of businesses naming these as priority investments.

Market Size and Forecast

India’s ERP software market size was valued at $5.6 billion in 2018 and is expected to reach $14.31 billion by 2026, registering a CAGR of 12.5% during the forecast period of 2019 to 2026.

The market made up roughly 15.6% of the Global ERP software market in 2018 and is estimated to contribute to a whopping 18.25% of global market share by 2026- and it’s said to be growing.

Market Size by Key Segments

The India ERP Software Market is segmented by component and business function. Based on components, the India ERP Software Market is categorized into the software and service.

By business function, the India ERP Software Market is divided into the Finance, Human Resource (HR), Supply Chain, Customer Management, Inventory Management, and Manufacturing Module.

Market Size by Key Components

Based on the distribution channel, the India ERP Software Market is segmented into software and service. Software accounted for a higher value share for India’s ERP software market. At first, the most popular ERP modules that were being implemented included Finance, Accounting then Supply Chain and finally Inventory Management and Manufacturing.

Furthermore, the majority of the ERP systems had been focused on larger establishments. But now, the ERP scenario in India has gone through an upsurge.

Automobile, Steel, Oil, Textile, Pharmaceutical and other Manufacturing firms are some of the many companies and organizations which faithfully rely on the support given by ERPs. Cement sectors, power sectors and also food sectors are also headed the ERP way.

Software:

The software segment dominates the India ERP Software Market and is expected to grow with a CAGR of 9.8% over the next seven years. ERPs software includes features that can ease up the workload for many companies ultimately resulting in easier work and thus indirectly increase productivity.
The software ERP market is expected to grow from over $4.25 billion in 2018 to almost US$ 8.2 billion by the end of the forecast period.

Service:

The service segment is presumed to witness the highest growth following an estimated CAGR of 14.8% from 2019 to 2026. The market is expected to reach US$ 6.1 billion by 2026.
They provide services (such as support, maintenance, and upgrade) and offer more customized ERP solutions to SMEs a company more flexible and less rigidly structured so organization components operate more cohesively, enhancing the business, internally and externally.

Market Size by Key Business Functions

Based on component, the India ERP Software Market size is segmented into the Finance, Human Resource (HR), Supply Chain, Customer Management, Inventory Management, and Manufacturing Module. The finance business function segment dominates the India ERP Software Market and is expected to retain its dominance throughout the forecast period (2019-2026).

Finance:

The finance business function was the highest contributor to the ERP software market in 2018 with the market share close to 25% of India’s total ERP software market and is anticipated to account for the market share of about 18% by 2026.
In 2018, the finance business function was the leading segment in the market due to an increase in adoption of finance module in most of the organizations to reduce complexity in financial functions and to achieve overall competency in business. The market is estimated to grow from over $1.4 billion in 2018 to over US$ 2.61 billion in 2026 at CAGR of 9.6%.

Human Resource (HR):

The market was worth US$ 2 billion in 2018 and will reach $ 3 billion in 2026, growing at a pace of 8%.
India is currently transforming into the world IT hub. HR segment is expected to witness high growth, owing to the increase in adoption of HR module in IT industries, and BPOs to perform HR activities smoothly and easily.

Supply Chain:

The supply chain module is one of the rapidly growing categories among all the business functions. The supply chain market was valued at US $490 million in 2018 and will reach $2,010 million in 2026, growing at a CAGR of 14.8%.
The wide presence of small and medium scale enterprises which are turning toward the hosted ERP solutions to efficiently manage their business processes is strongly driving the growth of the ERP market.

Manufacturing Module:

This segment is expected to grow at a CAGR of 13.9% in the forecast period due to the rise in the number of entrants in the pharmaceutical, automotive, garment, and consumer electronics manufacturing markets.
In India, the manufacturing module is one of the fastest-growing sectors, with the surge in adoption of cloud solutions, which is estimated to grow from over $630 million in 2018 to over US$ 1,940 million in 2026.

Customer Management:

The customer management module is the fastest-growing category among all the business functions due to a rise in focus on the accumulation of customer data to aid in the decision-making process.
This segment is expected to grow at a CAGR of 15.6%. The segment was valued at US$ 700 million in 2018 and will reach close to $3,000 billion by 2026.

Inventory Management:

The market was worth about US$ 1 billion in 2018 and will reach $ 2.53 billion in 2026, growing at a pace of 12.5%.

An ERP solution helps enterprises to tackle the issues of manual processes and human intervention to ensure the smooth production of products and goods. This segment is expected to witness high growth to tackle these issues and to improve the efficiency of the entire process.

Fig: India ERP Software Market Trend by Business Function (in US$ Billion)

Fig: India ERP Software Market Trend by Component (in US$ Billion)

Market Outlook

India’s overall ERP software spending is projected to reach US$ 14.31 billion by 2026 from US$ 5.6 billion in 2018. The market is anticipated to expand with a CAGR of 12.5% over the forecast period from 2019 and 2026.

Enterprise applications written for customer relationship management, human resources, and vertical-industry business processes are expected to fare better as replacements of legacy systems will pick up speed to take advantage of cloud computing, mobile content delivery, and real-time reporting.

In almost every single market segment, conventional on-premise enterprise software implementations will be replaced by a growing array of cloud services

By business function type, the Customer Management and Manufacturing Modules to gain the fastest growth during the forecast period

The Customer Management segment is anticipated to dominate the India ERP Software Market by the end of the forecast period (2019-2026). In the upcoming years, the number of businesses is anticipated to implement the customer management module to improve their business efficiency and productivity, thus providing ample growth opportunities to the ERP software market.
This segment is anticipated to account for market share close to 21% of the ERP software market primarily due to the on-going business expansion in developing economies compels businesses to adopt ERP Customer Management modules for easy integration and management of all the required information of the present and additional customers. This market segment is estimated to grow from over $700 million in 2018 to about US$ 3 billion in 2026 at CAGR of 15.6%.
Likewise, with the CAGR of 13.9% in the forecast period the manufacturing module is also expected to dominate the ERP Software Market by 2026. This is attributed to rising in the number of entrants in the pharmaceutical, automotive, garment, and consumer electronics manufacturing markets.

SMEs segment to grow at a higher CAGR during the forecast period

SMEs have limited budget and manpower which will make them vulnerable in the market. To stay competitive in the market enterprises are adopting cloud ERP which will help them to streamline business processes along with the cost advantages.
Cost-effectiveness is one of the major factors for SMEs as they are price sensitive in terms of adopting new solutions. Such advantages by cloud ERP solutions encourage SMEs to aggressively adopt cloud ERP solutions.

EPR Component migration

The software segment is anticipated to dominate the India ERP Software Market and is expected to grow with a CAGR of 9.8% during the forecast period, accounting for around 57% of the overall market share by 2026.
However, with the support, maintenance, and upgrade making inroads around the world, the ERP software market is in the midst of dramatic migration. The service segment is expected to grow by 20.0 percent from 2019 to 2026 in India’s EPR software market.

Fig: India ERP Software Market Future Outlook (in US$ Billion)

Technology Roadmap

ERP software solutions have reached a level of maturity that made developers more hard-pressed to find room for further improvement. So much so, that in the past few years, the only significant change to ERP systems is the increase in cloud adoption and the integration of early-stage technologies like AI.

Here are some trends that can shape the future of ERP, if it is implemented correctly:

Big Data:

Organizations have turned out to be more subjective to IT and, therefore, they have aggregated lots of information that has been normally underutilized.
By using analytical devices, the organization can start to utilize this information to make accurate forecasts that will help in proposing a business strategy.

Cloud ERP:

Cloud ERP will proceed to rise and will be largely acknowledged with most ERP systems.
76% of businesses either plan on transferring or have already moved to the cloud.
Decreased expenses in capital uses and IT resources, enhanced flexibility and maintenance, and also improved security and failure improvement will make the cloud attractable to all organizations.

Social Media Trend:

Number of ERP merchants have seen the value of web-based social networking and have integrated it into their systems.
They even have made their user interface like the well-known social media channels where the client and the vendor can have live interaction about ERP.
Sales, Customer Service, and Marketing can interface with clients and customers allowing for purposeful marketing activities and increased brand loyalty.

Distribution Chain Analysis

The ERP software supply chain management involves supply chain planning, supplier scheduling, product configurator, order to cash, purchasing, inventory, claim processing, warehousing (receiving, put away, picking and packing).

Fig: Supply chain of India’s ERP Software Market

Competitive Landscape

India’s ERP software market is highly competitive. ERP market players vary by economic stature, industry and operating strategy. The industry has seen many mergers and acquisitions of small start-ups over recent years.

The market is fragmented in nature and is headed towards consolidation. The global players have an upper hand, years of experience and are efficient operators. Companies that used to be spending tens of millions of dollars on ERP projects are shifting their investment plans to more tactical solutions, mostly via the Cloud to eliminate upfront license costs.

Others that are stuck with multiple ERP systems and the associated maintenance agreements have begun to rationalize their IT environment in favor of simplifying their technology stack or in some cases taking on a shared service approach

SAP maintains a dominant position in the ERP market:

In 2018, SAP maintains a dominant position in the ERP market with nearly 7% market share riding on a 6.4% jump in ERP license, maintenance and subscription revenues.
SAP offers customers a choice of deployment options including cloud, on-premise, and hybrid so they can choose any scenario or combination that is right for them.
Built to take advantage of SAP’s industry-leading in-memory computing platform, SAP HANA, SAP S/4HANA is the market-leading intelligent ERP that leverages advanced in-memory SAP technology to provide unparalleled business agility, enabling companies to exceed customer expectations and navigate dynamic marketplaces.

Oracle invests in the cloud ERP market:

Oracle was one of the first providers of cloud ERP solution where the company first launched its cloud ERP solution in June 2012. Since then, the company has launched many updates with the latest release was on March 2019, when the company added AI to its cloud ERP portfolio.
Oracle Cloud ERP has seen wide-scale cloud deployments were in the year 2018 alone; there were more than 100 deployments. The deployments were mainly focused on increasing business agility, decreasing cost, digital transformation initiatives, and others.
Oracle is also focusing on growing economies such as India and China to expand its customer base. For instance, in May 2017 Oracle launched a GST compliant ERP cloud for India, this will help the oracle to expand its customer base in India.

Competitive Factors

India’s ERP software market is highly fragmented and fairly competitive. There are currently a large number of players in the market making it a competitive industry. The ERP market plays a key role not only incorporate decision-making processes but in global transactions.

The Indian cloud ERP market is comparatively less mature than other markets in the world but expected to grow in the future due to increasing demand from SME’s.

The increased competition and globalization have become the key drivers for SMEs to deploy ERP in the cloud to minimize infrastructure costs. The factors such as low IT manpower, low operational cost, data backup, and recovery and ubiquitous access are encouraging SMEs to move ERP on the cloud.

The lucrative prospects within this market are also attracting a large number of new industry players. This competition is resulting in heavy investment by the top players into research and development to differentiate them from the rest.

In recent years, leading Cloud Service vendors are looking at offering highly customized and converged solutions to cloud payers and providers across the globe.

Large organizations typically purchase ERP software with broad applicability, including corporate fields such as accounting, finance, and human resources management, sales and purchasing management.

Smaller clients, however, buy limited-scope resource planning software for operating needs. With the introduction of low-cost ERP systems such as e-resource ERP, the smaller organizations also started benefiting from the advantages of this enormous business solution.

Key Market Players

SAP:

SAP America, Inc. develops enterprise software.
The Company offers SAP application software for business enterprises such as supplier relationships, production, warehouse management, sales, customer relationships, and administrative functions.
SAP was on track to sign more than 10,000 customers for its next-generation ERP S/4HANA by end of 2018 with 40% of the latest additions being considered net new wins for the vendor.

Microsoft Corporation:

Microsoft Corporation (India) Pvt. Ltd. provides computer related services and consulting.
The Company offers support and solutions including antivirus software, malware removal tool, computer security, phone apps and games, internet, office suites, server, home finance, business, health, and other media applications. Microsoft Corporation serves customers worldwide.
Migrating legacy AX, C5, GP, NAV, and SL to Dynamics 365 for the Cloud remains the top priority for Microsoft’s evolving enterprise apps strategy.

IBM Corporation:

International Business Machines Corporation (IBM) provides computer solutions.
The Company offers application, technology consulting and support, process design and operations, cloud, digital workplace, and network services, as well as business resiliency, strategy, and design solutions. IBM serves clients worldwide.

Oracle Corporation:

The company sells database software and technology, cloud engineered systems, and enterprise software products, particularly its own brands of database management systems. In 2018, Oracle was the third-largest software company by revenue.
Oracle has signed more than 22,000 Cloud ERP customers including nearly 6,000 for Oracle ERP Cloud and 16,000 for NetSuite. Each quarter Oracle is migrating at least 200 customers of its on-premise ERP systems like E-Business Suite to the Cloud.

Amazon:

Amazon Web Services, Inc. provides information technology services. The Company offers website hosting, backup, digital marketing, analytics, application integration, blockchain, networking, and other related services. Amazon Web Services serves clients worldwide.
Amazon Web Services, the cloud-computing division of Amazon.com , signed new deals with SAP SE and Symantec worth a combined $1 billion, according to an internal memo, underscoring the company’s growing momentum in the market for internet-based computing power and storage.

Ramco Systems:

Ramco Systems Limited is a provider of enterprise solutions and services in key areas such as manufacturing, aviation, asset management and trading & logistics.
The Company provides converged networking solutions, information security services and total contact centre solutions. It also provides engineering process optimization solutions to the cement and power sectors.

Infor:

Infor focuses on business applications for organizations delivered via cloud computing as a service. It was originally focused on software ranging from financial systems and ERP to supply chain and customer relationship management.
In 2010, Infor began to focus on software for industry niches, as well as user-friendly software design. It deploys its cloud applications through Amazon Web Services and various open source software platforms.
Infor acquired Vivonet for ERP apps for hospitality industry with point-of-sale and inventory and procurement functionality.

Workday:

Workday, Inc. provides enterprise cloud-based applications.
The Company offers human capital, spend, and financial management, as well as payroll, initiatives and higher education solutions.
Workday serves the finance, healthcare, manufacturing, education, and technology industries worldwide.

IFS:

IFS Applications designs and develops enterprise software.
The Company offers enterprise resource planning, asset management, mobile maintenance, and risk management solutions.
IFS Applications conducts its business worldwide.

Foradian Technologies:

Foradian Technologies is a privately held software provider of ERP Solutions based in Bangalore, Karnataka, India
It’s involved in design and development of enterprise software solutions for education institutions. The Company offers multipurpose school management software that administers and manages schools and colleges.

Strategic Conclusion

India’s economic growth, in terms with the country’s exposure to intense global competition, has demanded the necessity for the implementation of ERP; with operational, financial, and psychological resources required to satisfy these needs.

Rapid growth in Cloud and SaaS-based solutions are contributing to the popularity of ERP products in India. The future market is driven by cloud ERP adoption among enterprises of all sizes. Also, cost advantages and flexibility that it brings to the organization fosters the market.

In recent years, ERP platforms have gradually expanded to accommodate not only large enterprises but also small businesses. The SME segment is expected to drive the cloud ERP market more than that of large enterprises. This paves the way for more scalable and easy-to-implement solutions that don’t require technical expertise.

However, with the fourth industrial revolution in full throttle, ERP platforms have increasingly incorporated new technologies as part of their system. After all, cloud computing, artificial intelligence, and the Internet of Things can open up new opportunities not just for the users but for software providers as well.

Though there are many big companies yet to implement an ERP system, it can be assumed that they will go for it soon. That will surely lift the Indian ERP market growth rate somewhere near the industrial growth rate.

References

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Appendix

List of abbreviations

AI: Artificial intelligence
CAGR: Compound Annual Growth Rate
IoT: Internet of Things
ERP: Enterprise Resource Planning
ML: Machine Learning
SMEs: Small and Medium Enterprises
US$: United States Dollar