During Part 2 of our Trends and Predictions, we forecast what is in store for ERP in 2025. Our vendor predictions are replete with buzzwords like “AI agents” and “autonomous decision-making” which are no longer just futuristic, sci-fi novel storylines. ERP Industry Expert, Shawn Windle, and ERP News Analyst, Rebekah McCabe, provide a rundown of our predictions for ERP in the coming year.
2025 will eclipse 2024 in terms of market growth, with massive innovations on the horizon. While the ERP industry grew last year, it came at a much slower pace than previous years with fewer new customers across all major industries. As a result, the demand for ERP in 2025 will be monstrous. Expect a significant rebound this year, with market growth across most sectors. Beyond general market growth, areas such as the steel industry and private equity industry should see exponential growth due to the economic policy expectations that come with the new administration who just took office in January.
The investment into data center and software infrastructure in 2024 will also open the door to a whole new level of innovation for ERP. AI investment was the theme for ERP software vendors in 2024. Vendors will unveil new tools to change their industry and what to expect for business application functionality. Businesses will demand AI tools and automation from vendors, and vendors will be forced to maximize their capabilities to stay ahead of competitors.
AI was a buzzword that got amplified in just about every conversation on software in 2024. Agentic and other AI tools were in discussion and slowly being developed in the technology sector but had not yet come to fruition. In 2025, we expect AI to become not only realistic, but applicable. We foresee the general availability of AI agents and other AI solutions available out-of-the-box, going beyond current, mainstream AI solutions such as ChatGPT or Grok.
We also anticipate AI becoming even more “human.” Large Language Models (LLMs) enable AI tools to provide answers in real, comprehendible terms. Actionable insights will become more intuitive, unlike anything we have seen before, though there will still need to be some human oversight (for now).
Because of the investments in data and infrastructure in 2024, ERP vendors now have the capacity to create applications that used to be mere ideas. Now is the time to demand real results from AI. Users can expect to see more cutting-edge solutions embedded within their ERPs and, at the very least, know their vendor has a plan for the future. From human resources to finances, the applications of the technology we now hold in our grasps is almost infinite.
2025 will also see an influx of merger and acquisition activities. There is a category of vendor solutions on the market right now expected to plateau in adoption: legacy ERP software. More businesses who are still on legacy software will undergo major ERP migrations. Vendors who understand this shift are partnering with various solution providers and implementation partners to accumulate large legacy bases. Then, they are strategically acquiring industry-specific solutions to develop an upgrade path for those legacy audiences. We may not see the titans of the industry such as Oracle or SAP invest heavily in acquisitions, but expect vendors in the Tier 2 space to use acquisitions as a way of bolstering business.
By acquiring smaller, more industry-focused solutions, vendors can fill gaps in their industry reach while also breaking into a whole new customer-base in need of options for future growth and expansion. Customers on acquired platforms should keep an eye on product and support announcements in order to make important decisions regarding potential migrations or upgrades.
Implementation partners will also be heavily involved in 2025 M&A trends. A natural consolidation of the market will lead implementation partners to be acquired by vendors looking to shore up their sales channels. Other partners will reach agreements with current competitors to become market giants through strategic mergers. Partner activities will stimulate growth in 2025.
The most drastic evolution of 2025 will come through software implementations. As more AI tools are implemented, business process management automation will be at the forefront of desired innovation. Customizations will be easier to develop and with far less risk, making software far more adaptable to an individual company’s needs. Since AI will make coding more accessible and executable, regardless of experience level, businesses will be able to build solutions and integrations efficiently and effectively. Customizations have always been attainable, especially to larger enterprises with the resources to fund it; however, AI is making them available to the masses.
When these developments come into fruition, implementation costs will start to decrease. Implementations require heavy resource investments, personnel-wise and financially. Through AI-tool driven methodologies, SUCCESSFUL implementations will become more cost-effective and achievable. However, streamlined implementations often equate to “cookie cutter.” When a ‘cookie cutter” strategy is applied, customers may feel their needs are neglected, especially in phase 1. New technology will hopefully negate these concerns and make the “cookie cutter implementations” more viable.
In 2025, the message is simple: be prepared for growth. For businesses on legacy or on-premises solutions, the time to adopt new technology is now. The market is only going to keep moving forward, and the advancements currently becoming more widely available will be vital to future success. Having a cloud-based platform with access to advanced data centers is going to be key to keeping up with 2025’s technological boom.
If you are already on a cloud-based platform, stay diligent in evaluating your current vendor. It is important to understand their plan for the future and how AI tools will integrate into their offerings. If not, it will be easy for your business to fall behind the competition. If you are looking to evaluate your ERP and need support, we are here to help. Schedule a free consultation today to hear from our expert advisors.