Five Trends Shaping the ERP Market and Systems Selection

The ERP market is experiencing rapid growth. Valued at $53.77 billion in 2022, the global market size is expected to increase at a CAGR of 11.1% over the next six years, reaching an estimated $123 billion by 2030. This surge in interest is fueled by the masses of data entering the business landscape, and companies are struggling to harness the influx effectively to streamline operations and gain a competitive edge.

According to a recent survey of IT decision-makers, 50% of companies plan to purchase or update their ERP systems soon to help them optimise core business processes and drive better decision-making.

In response, both traditional and cloud-based ERP vendors are ramping up functionalities like never before. From Oracle integrating blockchain for supply chain management to Acumatica and Microsoft Dynamics 365 introducing AI-powered forecasting, ERP providers are speeding up innovation cycles to address increasingly complex business needs.

However, navigating the shifting landscape presents challenges to ERP partners and Independent Software Vendors (ISVs), such as striking the right balance between technical innovation and human expertise.

In this article, we'll explore key trends shaping the ERP industry in 2024 and explain how our emphasis on collaboration makes Formpipe your ideal partner for ERP implementation success.

1. Businesses are under pressure to lower total cost of ownership

In today's uncertain economic climate, businesses are increasingly pressured to do more with less. Within the ERP space specifically, solutions must deliver measurable results and help companies lower the total cost of ownership (TCO).

Recent studies show that an initial ERP system licence represents an average of just 15% of TCO, whereas ongoing expenses like maintenance, training and ERP upgrades account for 85%. Moreover, 38% of ERP projects go over budget, in many cases due to technical issues and customisation requirements.

Therefore, companies must be reassured that their ERP solution is future-proof and designed to reduce the burden on internal IT resources.

Opting for an ERP solution that focuses on a core area of expertise rather than trying to do everything all at once gives organisations more control over TCO. For instance, deployment is more straightforward, and support is also obtained from a single source, instead of chasing multiple troubleshooting forums.

Additionally, specialised providers optimise customisation features and upgrades to ensure uninterrupted functionality, freeing up IT resources to focus on core business activities.

2. Increased collaboration between ERP vendor and Independent Software Vendors delivers seamless solutions to customers

The worldwide market for Independent Software Vendors (ISVs) is projected to reach $162.45 million by 2027 (up from $93.29 million in 2021), as demand is rising for increasingly more complex solutions to solve business challenges without the need for expensive and time-consuming coding projects.

This trend is leading to more ERP vendors partnering with specialised ISVs in specific areas. For example, an ERP may partner with several ISVs in the e-commerce space to create a pre-packaged suite of procurement solutions. This collaborative approach enables ISVs to build more effective solutions within their niche while ERP partners focus on optimising integrations. Customers benefit from easy deployment and maintenance, ERP vendors get to focus on market differentiation, and ISVs are empowered to expand their market reach.

3. Automated ERP systems should be simple and intuitive to use

Despite the rise of advanced ERP functionalities, simplicity remains a crucial selling point. Customers want to learn how to automate tasks, minimise errors, and streamline processes, but they want to pick up the skills to do this as quickly and intuitively as possible.

Prioritising user-friendliness with every connector update minimises setup complexity for IT teams and improves ERP system usage for end users. For example, offering features like one-click buttons for pre-configured automation and logic-based rules for more complex scenarios allows users to focus on their tasks without needing to be experts in the underlying processes.

Furthermore, 91% of software customers would use a software provider's e-learning platform or video tutorials to improve their knowledge of an ERP system. This underscores the importance of providing user-friendly resources to help customers become more proactive in their automation journeys.

4. Human interaction in ERP system support is vital 

In addition to lowering the total cost of ownership, businesses want to ensure that their ERP providers are successfully adapting to new technologies and market trends. ERP solutions are a significant investment and can take 18 to 24 months to deploy across large multinational organisations. So, customers need to be assured that their vendor is with them for the long haul.

This includes ERPs and ISVs engaging with users regularly, not just ensuring their applications don't become obsolete after a few years. Customers want to feel like they're being listened to and that ERP solutions are continually updated to address their needs.

What's more, customers favour easy-to-use systems, including self-service tools. However, only 34% of consumers find customer service chatbots useful when something goes wrong, with 43% stating that the technology needs to be substantially improved before it can replace human agents. Many are unsatisfied with chatbot responses and endless support emails that seemingly go nowhere; they want to speak to a human to resolve technical issues quickly.

As a result of this shift towards good old-fashioned customer service, ISVs and ERPs are increasingly reintroducing humans into their support processes. Trained support teams can advise on queries that are far too complex for chatbots to handle, and their personalised input can help boost customer satisfaction ratings.

5. Demand for AI in ERP systems is increasing

Businesses across all industries have seen artificial intelligence and machine learning's remarkable capabilities for streamlining operations and improving decision-making. They want to leverage this new, fantastic tech to get ahead of the competition.

However, the key to harnessing new technology effectively is to tune out the marketing buzz and be very clear about the business challenge you're trying to solve with tech. New solutions must add value to your business, so quantifying its potential impact and optimising its usage over time is paramount.

How These Trends Shape Formpipe’s Lasernet Platform

At Formpipe, we identified data extraction as a critical challenge for our ERP customers, so we pioneered a two-pronged approach using Optical Character Recognition (OCR) long before the recent AI craze took off.

Our solution uses established OCR technologies like Tesseract to extract data from digitised documents and ABBYY to convert scanned documents into machine-readable formats. Both tools add value to ERP systems by enabling easy data integration and management with databases and other applications.

Now, with the introduction of Azure AI, we're piloting a solution that trains machine learning algorithms to recognise data patterns even if the design or layout of documents changes frequently. This AI-powered update eliminates the need for Formpipe users to remap data fields once information has been extracted via OCR, improving efficiency and data quality. These advancements showcase our commitment to staying ahead of the tech curve while prioritising tangible results for your business.

What comes next?

In conclusion, the ERP landscape is rapidly evolving to meet increasing business demand for automated and AI-powered solutions. However, while features and functionalities are hugely important, successful ERP deployment surpasses easy access to cutting-edge tech. ERP investment must be directed to solutions that seamlessly integrate into workflows. Moreover, providers should prioritise human support as a crucial safety net.

In response to these changing customer needs, more and more ERP vendors and ISVs are forming strategic partnerships, creating user-friendly pre-configured solution packages that streamline ERP implementation and boost operational efficiency. Formpipe is a prime example of an ISV prioritising this collaborative, human-centred approach.

We've taken our decades of hands-on experience in the ERP industry to deliver powerful automation tools that empower companies to streamline their existing and future workflows.

To discover how our innovative output and document management solution can streamline your ERP system get in touch today or book a demo below.