A survey report released by Gartner earlier this year noted that the ERP market had a sluggish growth last year clocking a rate of just 2.2%. Despite this, the growth of SaaS based ERP solutions are expected to grow at a healthy pace to reach 17% of the market by 2017 (12% in 2012). These projections are further strengthened by a report released by Panaroma Consulting. In their annual ERP report for 2013, the firm has come up with some pretty interesting statistics and projections. Here is a rundown of the various results from the survey.
Type Of ERP Solution Used
A whopping 61% of the firms still use on-premise ERP systems. While this could be disheartening to the proponents of cloud based enterprise systems, what this also reflects is the tremendous potential that cloud ERP solutions have for the future. Here is the market share of the various ERP systems as noted by Panaroma in their report.
| ERP System | Market Share |
|---|---|
| On-premise | 61% |
| SaaS | 14% |
| Cloud ERP (hosted and managed off-site) | 12% |
| Others | 13% |
Reasons Why Companies Are Still Skeptical About Cloud ERP
Most discussions on why cloud ERP are still not dominant veer towards risks like data loss. However, the research reports points out that one of the biggest reasons is lack of knowledge about service offerings. This is a very interesting tidbit since cloud ERP providers only need to enhance their marketing efforts to start seeing much improved adoption rates from businesses.
| Reason | Percentage of respondents |
|---|---|
| Risk of security breach | 32% |
| Low awareness | 32% |
| Risk of data loss | 17% |
Cost Savings From Cloud ERP Migration
One of the biggest advantages to migrating to cloud ERP systems is definitely the cost factor. A survey of various businesses who have made this migration show that the cost savings are pretty decent.
| Cost savings in % | Percentage respondents | |
|---|---|---|
| 0-20% | 60% | |
| 21-40% | 24% | |
| 41-60% | 8% | |
| 61-80% | 0% | |
| >80% | 8% |
Use Of ERP Consultants
A lot of businesses make use of third party ERP consultants to help them with implementing the system. For example, ERPGuru is a NetSuite partner in Canada that helps in implementing and supporting the NetSuite cloud based business management software. The Panaroma Consulting report notes the use of consultants during the various phases of the project:
| Project Phase | Consultants employed |
|---|---|
| Planning | 35% |
| Selection & Purchasing | 35% |
| Implementation | 28% |
| Post Implementation | 2% |
ERP Implementation Budgeting
One of the concern areas for businesses during implementation of such projects is the overall cost and how it impacts the budgeting. According to the Panaroma report, the implementation of ERP was on budget only around 35% of the time.
| Budgeting | Occurrence |
|---|---|
| On budget | 35% |
| 25% over budget | 31% |
| 26-50% over budget | 16% |
| 51-75% over budget | 4% |
| >76% over budget | 2% |
| Under budget | 12% |
Project Schedule
After budgeting, the next big concern for businesses is whether or not the implementation happens on time. The report reveals the following data.
| Duration | Occurrence |
|---|---|
| On Schedule | 34% |
| <25% over schedule | 27% |
| 26-50% over schedule | 10% |
| 51-75% over schedule | 12% |
| >76% over schedule | 12% |
| Earlier than scheduled | 5% |
