A recent study by Gartner, an information technology research and advisory company, says the global enterprise resource planning (ERP) market is expected to reach over $41 billion in sales by 2020, with an annual growth rate of 7.2 percent from 2014 to 2020.

“From a data perspective, your ERP system is your command and control center,” says Rhianna S. Collier, Vice President and Managing Director of the Software & Services Division for The Software & Information Industry Association (SIIA), the principal trade association for the software and digital content industry. “The ability to better collect and report the data is an opportunity for the ERP platform to provide more insights into the business.”

Streamlining

The growth of the ERP industry comes as more businesses and industries including manufacturing, health care, telecom and retail, want to streamline their internal activities. “Resources are tight in any business today,” says Collier. “The ability to streamline business processes is key. By streamlining, you increase profits, better communication and efficiency across the company.”

“'ERP software has the most direct impact on reducing costs by improving efficiencies.'”

Since ERP can work across different departments in an organization, such as human resources, accounting and customer service, the software can unify business approaches for maximum productivity.

“ERP software has the most direct impact on reducing costs by improving efficiencies,” says Collier, explaining it can help executive teams make better business decisions. The software eliminates instances of double data entry, greatly improving efficiency. “Time is money, so the more time employees spend repeating tasks, the less revenue you’re generating,” adds Collier.

Still, the streamlining software can take about three months to implement—plus, it’s pricey. “ERP systems can be expensive but the ROI can be tremendous,” says Collier, explaining options including building your own system, buying one or using a cloud based ERP to store data remotely.

Best practices

Businesses looking for ERP software need to find a provider that matches their needs. “I think the number one reason a company will walk away from an ERP is implementation,” says Collier, urging businesses to consider whether or not the software provider will be a good partner. “Will they be committed to your success?” she asks. “Are they as committed to your success as you are?”

ERP’s future is in the cloud, continues Collier, explaining cloud computing provides strategic growth through analytics and better reporting. It’s also cheaper and more flexible than traditional ERP software.