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What is the reason for ERP market growth in India?

ERP market in India steadily growing for the last few years and the main reason for this enormous growth can be attributed to the inability of order system to manage the conversion to year 2000. There are also other factors such as industry best practices, easy and faster implementation and good cost predictions.

Another factor behind the growth is that already existing clients acquire more licences and modules. The number of employees using the ERP system is increasing and the ERP clients who have started with the basic modules are going for subsequent applications. There is also a trend to replace customized system with standard application packages, like an ERP system.

India is expected to present ERP suppliers an important marketplace as manufacturing companies are significantly investing in technology solutions to improve their manufacturing operations.

According to observation made by some experts in the field, the ERP market started showing solid organic growth since 2004 as IT spending improved.

The Indian ERP market experienced CAGR (compounded annual growth rate) of 25.2 during the period of 2004-2009. The market was $83 million in 2004, and is projected to be over $250 million in 2009, according to a research report.

The report further clarifies that manufacturers in India are increasingly implementing ERP solutions to ensure that decision makers have the required information visibility across the value chain.

Majority of Indian manufacturers are small by global standards, requiring easy-to-use ERP solutions to meet their specific process requirements, including localisation needs to address the continually evolving tax and statutory requirements. Small and medium enterprises across industry verticals and micro verticals, such as automotive, pharmaceuticals, and textiles, are leveraging ERP solutions to gain sustainable competitive advantages.

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