2019
ERP Software
Report
2019 ERP software project report 1
All information held within this report is provided under Creative
Commons BY-ND license allowing use of the work with attribution
and no derivatives. To use the data from this report you must attribute
to Software Path ([Link] directly.
2019 ERP software project report 2
01
Planning
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Timeframe for selecting ERP
The timeframe for selecting ERP increases as the company size
grows. A potential reason for this increase is that larger businesses
will have a larger number of stakeholders to consult during their
selection project.
On average, companies spend 22
weeks selecting ERP
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Percentage of employees using ERP
The data shows that smaller companies have a higher percentage of
employees actively using their ERP system than larger companies.
On average, 37% of employees use
a company's ERP system
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Percentage of employees using ERP by industry
Distribution and retail industries have the highest percentage
of employees using their ERP system, followed closely by the
manufacturing industry. Common requirements among all three
industries are the need for traceability of incoming and outgoing
goods, robust transaction reporting, and ability to manage a large
workforce to accommodate goods or services required.
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Percentage of companies using ERP
Companies with over 250 employees are most likely to be replacing
an existing ERP system, whereas small companies (with below 49
employees) are likely to be selecting an ERP system for the first time.
42% of companies purchasing ERP
are replacing an existing system
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02
Requirements
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Reason for implementing ERP
The leading reason for implementing ERP across businesses of all
sizes is to increase efficiency, similarly, many companies aim to gain
greater functionality by implementing a new system. Although the
second most popular reason is replacing outdated systems, less
than 4% of businesses are looking to implement a new ERP due to
poor support from their current vendor.
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Reasons for implementing ERP by company size
0-49 employees
• Increase efficiency 28.6%
• Greater functionality 25.5%
• Replace outdated legacy system 20.2%
50-249 employees
• Replace outdated legacy 34.9%
• Greater functionality 22.2%
• Consolidate disparate systems 18.8%
250+ employees
• Consolidate disparate systems 33.8%
• Replace outdated legacy 25.0%
• Integrate global operations 20.6%
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Hosting preferences by company size
6.5%
● Cloud ● No preference ● On-premise
Cloud ERP is the most popular deployment method across businesses
of all sizes, with on-premise ERP being the preferred hosting in less
than 10% of all businesses. The rise of mobility and BYOD could
account for the stronger preferences for a cloud ERP solution that is
accessible anytime, anywhere.
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Hosting preferences by industry
Companies in the manufacturing industry have the highest percentage
of on-premise hosting preference across all industries. The majority
of industries prefer a cloud-based system or have no preference as
to the hosting method provided.
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03
Budgets
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All budget data was gathered from projects as a projected total
cost of ownership for the new system over five years. Budget data
is presented as a budget per user to enable comparison between
companies of different sizes.
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Budget per user ($) by company size
Mid-sized companies, on average, have a higher budget per user.
Although mid and larger sized companies have similar reasons
for implementing ERP, such as consolidating disparate systems,
mid-sized companies have a greater spend per user whilst larger
companies benefit from economies of scale, in areas such as training
and implementation, causing their cost per user to be lower in
comparison.
The average budget per user for
ERP software is $7,200
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Budget per user ($) by hosting preference
Businesses looking to implement an on-premise ERP solution typically
have a larger budget per user than those looking at cloud-hosted
solutions. A possible reason for this is on-premise ERPs typically
follow a licensing pricing model, with one large upfront payment for
the system and the first year of support from the vendor, meaning
the initial outlay for the system is higher than cloud-hosted systems.
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Budget per user ($) by current ERP setup
The average spend per user is higher for companies already using
ERP. The earlier data showing that mid-sized and larger companies
are more likely to be replacing an existing system could explain this
difference as these companies will have increased costs for data
migration and change management. In contrast, companies who
have not previously used ERP may not be as acutely aware of the
hidden lifecycle costs involved in the implementation and may not
have factored these into their existing budget.
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04
Appendices
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Appendix A: Sample demographics
Sample geography
Territory Percentage
Africa 2.1%
Asia 0.2%
Europe 14.8%
Middle East 1.4%
North America 81.4%
South America 0.1%
Unknown 0.1%
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Appendix A: Sample demographics
Sample industry
Industry Percentage
Construction 4.0%
Distribution 14.1%
Manufacturing 51.6%
Other 5.2%
Retail 6.3%
Services 18.9%
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Appendix A: Sample demographics
Sample company sizes
Employees Percentage
0-49 33.6%
50-249 36.2%
250+ 29.8%
Unknown 0.4%
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Appendix B: Notes on methodology
Data gathering
Data was gathered directly from users of the Software Path website
or partner websites. All data was gathered from active software
selection projects between February 2018 - January 2019 unless
otherwise specified in the methodology. The total sample size used
for analysis was 1,646 although subsets of this may have been used
where data coverage was lower.
Budget data was gathered from active software selection projects
as a projected five-year spend on the software. This data was then
transformed to “budget per user” based on software user numbers
gathered in the same sample. Budget data was gathered between
February 2015 - January 2019.
Multivalued fields
Some projects used for analysis displayed multiple values in a single
field. Where appropriate these multivalued fields were included in
analysis for each value (i.e. one project may be recorded in analysis
of multiple values). This choice was made to best represent the
true demographics and characteristics of each project. These fields
include:
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• Reason for project
• Industry
• Platform preference (where “either” was given as a choice)
Analysis of multivalued fields in this way may give a percentage or
numeric total greater than the sample size or 100% respectively.
Averages
Averages have been used to present analysis on a number of samples,
including project timeframe and budget per user.
Analysis of project timeframe data uses the mean to present averages
due to the data being gathered in a structured range between 0-12
months.
Analysis of budget per user data uses the median to present averages
due to the data not being gathered in a structured range leaving the
mean susceptible to skew from extreme variables.
Contact us
For more information on this report including reuse of the data or
methodology queries, please contact info@[Link].
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