ERP represents enterprise resource planning. Within the construction industry, it is a reflection of a growing trend where software as a service is become an essential component of each business.
In 2018, the software as a service (SaaS) market was valued at $73.6 billion. Revenues from the public cloud market in 2017 totaled $138.4 billion. Construction and real estate software applications are responsible for about 10% of the overall SaaS revenues generated each year.
The modern ERP resource is designed for businesses that fit into the SMB or SME category. Designed in ways to help these small- to medium-sized businesses or enterprises find new methods of upward scalability, many of them are so advanced that they can take care of almost all processes within the organization.
There are many cloud-based solutions within the industry to provide flexibility. Being in the cloud makes ERP construction industry solutions very affordable. This combination makes it possible for a firm of almost any size to become immediately competitive.
Important ERP Construction Industry Statistics
#1. The ERP construction industry generated about $7.7 billion in revenues in 2015. (Statista)
#2. 94% of businesses which operate within the ERP construction industry say that their security is better because of the availability of cloud-based resources. (Panorama)
#3. 22% of companies that are looking for competitive solutions within the ERP industry look at SaaS as a viable option. Almost every company which chooses ERP experiences cost-savings on some level. (Panorama)
#4. 81% of organizations in the United States have either implemented ERP software or are in the process of implementing it. Another 14% are in the process of selecting their SaaS, while another 5% are working on an upgrade. (Panorama)
#5. The most common reason, cited by 16% of firms to implement a new ERP was to replace an older version or upgrade a legacy system. (Panorama)
#6. 35% of organizations who implemented their ERP successfully reported that the total cost represented 3% or less of their organization’s total revenue. On average, an organization spends 6.5% of their annual revenue on an ERP project. (Panorama)
#7. The global ERP software market is valued at $82.3 billion. (Statista)
#8. The average length of time for an ERP project within the industry was 16.9 months in 2016. 59% of organizations implementing this type of solution experienced a duration overrun. (Panorama)
#9. Just 3% of the firms who are looking at an ERP solution to meet their organizational needs are classified as being within the construction industry. 35% of these SaaS requests are in distribution industries, with 29% coming from the manufacturing sector. (Panorama)
#10. 32% of the firms which implement an ERP system earn annual revenues between $50-$300 million. Another 25% of firms report annual revenues of $300-$500 million. (Panorama)
#11. 17% of companies who are looking at an ERP solution say they are doing so to improve the performance of their business. 14% say that they want to make sure they are in compliance with regulations. That’s followed by another 14% which want to make the jobs of their employees easier. (Panorama)
#12. Although cloud-based and SaaS tend to be the most affordable options within the ERP construction industry, two-thirds of installations are with on-premise software. (Panorama)
#13. 72% of firms say that they choose an on-premise installation because it reduces a perceived risk of data loss. Another 12% say that it reduces the perceived risk of a security breach. (Panorama)
#14. 70% of firms that work to implement an ERP solution say that they will modify up to 25% of the code of the solution they choose. Just 12% say that no customization of their installation is required. (Panorama)
#15. 27% of firms implementing an ERP solution bring on a consultant to help them manage the implementation. Another 22% add a consultant to provide change management support within the company. (Panorama)
#16. 93% of businesses who have successfully implemented an ERP solution say that they’ve improved some, if not all, of their business processes in 2016. (Panorama)
#17. 46% of firms working with an ERP vendor say that they were dissatisfied with their experienced. Another 4% report feeling very dissatisfied. Only 26% of companies report having a satisfied or “very satisfied” experience with their vendor. (Panorama)
#18. Firms which have implemented a modern ERP system are able to increase their on-time deliveries by up to 24%. (Aberdeen Group)
#19. Because ERPs offer incentives like lower operating costs, reduction of inventory, and better improvisation within scheduled compliance, the CAGR of the industry is expected to reach 7.9% through 2020. (Purch)
#20. The share of packaged software spending from the global ERP market is 54%. (Statista)
#21. Global spending on cloud-based infrastructures is more than $50 billion per year. (Statista)
#22. 1 in every 3 ERP buyers does not view a demonstration of their preferred product before they make the decision to purchase it. (Capterra)
#23. About 1 in 5 companies that pursue an ERP solution say that they decided to purchase the first system they looked at. (Capterra)
#24. 21% of ERP solutions fail to deliver significant business benefits, which is almost the exact same number of businesses which do not perform their due diligence when pursuing this type of opportunity. (Panorama)
#25. Almost 30% of ERP consumers say that they are unable to adequately serve their customers because there is a lack of functionality within their system.
ERP Construction Industry Trends and Analysis
For many SMBs and SMEs, being active in the cloud with an ERP construction software solution is the only way to remain in regulatory compliance. Without this SaaS solution, the manpower requirements to maintain compliance would be too costly for small business to stay competitive.
There are many reasons why an organization may wish to implement an ERP, especially within the construction field. As many industries begin to explore the benefits of automation and artificial intelligence, firms focused on construction will continue to look for ways to automate deliveries, reduce administrative costs, and look for additional ways to reduce labor costs.
The ERP construction industry will continue to see strong growth that parallels the same levels experienced by the overall SaaS industry. As more firms experience the benefits from this SaaS option, watch for more small firms to look at cloud-based solutions to save time and money, allowing them to remain competitive.