The ERP market can be a confusing place.
There are so many variables when selecting a system, it can be hard to find answers to the important questions you have about ERP cost, deployment methods, or even the time it takes to choose a system.
We’ve gathered and analyzed data from over a thousand projects that were active in the past year in our 2021 ERP project report to answer all your questions. Specifically, we’ve looked at cost per user, project timeframes, budgets, previous systems, and hosting preferences.
Our ERP research provides a comprehensive overview of what selecting enterprise software looks like in 2021.
Quick jump to:
- How much does ERP cost?
- Which system were most companies replacing?
- How many people in a company use an ERP?
- How long does it take to select ERP?
- Do companies want an on-premise or cloud-based ERP?
- Why do companies implement ERP?
Here is a summary of some of our key findings:
1. The average budget per user for an ERP project is $8,265.
The most common question asked about ERP has to be: how much does ERP cost?
Well, according to our research from the past five years, you can expect to spend about $8,265 on each user of your system. This is the average budget per user across businesses of all sizes over a five year period, but you’ll find this number varies depending on business size and the number of users.
This is a decrease from our 2020 ERP project report data where the budget was $9,000 per user.
2. The most common software companies were replacing was Quickbooks
We found that most companies were migrating from Quickbooks to their first ERP system.
Additionally, 40% of companies were moving from smaller solutions that were either homegrown or unsuitable for their needs as their company has grown.
3. On average, 26% of employees use a company’s ERP system.
If you’re implementing a system, you need to know who is going to need to use it.
Our ERP report data found that 26% of employees are users of their system, again this varies due to business size, but combined with the above cost information, this can help you create some accurate budget estimations relative to your organization size.
As companies grow in size, our ERP research shows that the percentage of employees actively using their system decreases.
4. On average, companies spend 17 weeks selecting ERP.
The process of selecting an ERP may seem long, but most companies spent only 17 weeks choosing their system.
Typically, larger companies spend longer selecting their ERP, likely due to a larger number of stakeholders in the business that must be consulted during the selection process.
5. Over 97% of companies were considering a cloud-based solution.
The rise of cloud-based software has been the subject of much debate, and our data supports that it has begun to dominate the ERP market.
The preference for cloud-based systems vs on-premise ERP has shifted with less than 3% of businesses specifically searching for an on-premise solution. Whereas, over 60% of businesses were looking exclusively at cloud-based solutions.
Interestingly, a significant portion of companies don’t list a preference for a cloud or on-premise solution which could indicate the hosting method of the system has less significance to a large number of businesses now.
6. The top reason for implementing an ERP is to increase efficiency.
Almost a quarter of businesses were implementing an ERP to increase their efficiency.
A significant number of businesses are aiming to improve their processes and productivity by implementing an ERP. Gaining functionality, the third leading reason, accounted for almost 20% of businesses main reason, whilst it lead as the top reason for businesses with over 250 employees.
Supporting growth is still a top priority for implementing an ERP system, with 20% of businesses saying this was an important part of their selection project.