SaaS ERP to grow at a CAGR of 28% in India and 37% in China over the next five years – Gartner

Gratner-ERPSmall and medium businesses(SMB’s) are looking forward to adopt ERP solutions on the software as a services (SaaS) model for enhanced implementation and cost effectiveness, said Gartner, as reported by Business Standard. According to the research Firm, the ERP market with SaaS based model is expected to reach USD 538 million by 2017 from present USD 178 million in India.

As most of the SMB’s are quite small when compared to global standards, they require an easy to use and a really cost effective ERP solution to meet their process requirements and gain sustainable competitive advantage. Also, as per Gartner India Research Director Sunil Padmanabh, SaaS seems like a good option for organisations looking for solutions that can scale up as their businesses grow.

The recent report by Gartner also discloses some major facts about the ERP market in India and China.  Wherein, over 1,000 user organizations have adopted SaaS-based ERP including both India and China, the SaaS ERP applications constitute less than 5% of the overall ERP market in both the countries. Also, Over the next five years SaaS ERP is expected to grow by 28% CAGR in India and 37% in China.

This gap is mainly due to lack of adoption for the ERP services across verticals like banking, telecom, etc owing to the sensitive and critical information involved in the processes. “Today, SaaS ERP adoption is clearly in the SMB segment, but large enterprises, including multinationals, have been gradually considering SaaS for their dealer/distributor networks,” said  Padmanabh.

The other challenges posed during ERP adoption includes limited flexibility of customisation, issues with data security and network.

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At present, the key ERP software vendors  for SME segment in Indian Market includes SAP, Microsoft Dynamics, eresource ERP, Ramco, 3i Infotech, Sage ERP, Godrej and many other.