The ERP Advisor kicks off 2025 with an insightful analysis of the hottest ERP trends from 2024. ERP Industry Expert, Shawn Windle, and ERP News Analyst, Rebekah McCabe, discuss how last year’s ERP vendor innovations bolstered business efficiency, aided digital transformation, and evolved with AI functionality. ERP Advisors Group advises dozens of clients each year, attends vendor conferences, and analyzes weekly ERP news developments. This rich information provides one of the most independent and unbiased reviews of the ERP market.
2024 was a transformative year for the software industry. From the continued expansion of AI to platform advancements and deeper industry specialization, businesses came to expect more from their technology. In this installment of The ERP Advisor, we examine the software trends of 2024 which will pave the way for the innovation coming in 2025.
The ERP market saw growth in 2024, but not at the pace which ERP software vendors have enjoyed in the previous years. Some vendors faced revenue pressure to increase rate and subscription fees, contributing to less new customers across the board. Implementing or switching ERPs is an expensive project, and increased rates can dissuade prospective customers from making the jump. Additionally, high interest rates in 2024 lowered the tolerance for investing in non-essential initiatives. Our observations from this past year revealed that customers across industries were hesitating to purchase software. Therefore, we believe there is pent up demand heading into 2025.
Additionally, 2024 was also an election year, which impacted business decisions heavily. Not knowing which candidate would win and the variance between the candidates’ vastly different policy stances may have caused hesitation to make significant investments in the short term. Businesses were forced to navigate the risk of taking on an ERP project while also managing their revenue projections and accounting for the economic shifts that could occur during an election year.
As we predicted in January 2024, there was an explosion of AI activity from software vendors across the market. From strategic partnerships and acquisitions to extensive research and development being poured into native functionality, AI was the focus of 2024. The mainstream delivery of generative AI gave way to process automation like businesses had never seen before, allowing more and more companies to become comfortable with the idea of allowing AI to enter their day-to-day operations.
The world was introduced to major market players, like NVIDIA, that promised to help expand the scope of and access to AI. Through partnerships with Microsoft, Oracle, Salesforce, and Infor, customers realized the true potential of AI and were quickly introduced to AI agents, the latest product innovations to come in ERP.
Despite the constant releases and advancements, 2024 was the year of setting realistic expectations. Previously, inflated perceptions of AI led many to either fear its introduction into their businesses or exaggerate the real impact it would have on operations. The hype settled in 2024, allowing businesses to glimpse the realistic potential of AI. As a result, we saw more companies demanding new ERPs so they can lay the groundwork for incorporating AI strategies. While companies were aware of AI in 2023, few were making AI a requirement in their ERP software selections. It is clear AI is becoming less of a competitive advantage and more of a necessity.
AI has opened the door for businesses to harness the power of their data. Solutions are becoming more and more intuitive. Part of this shift has been through continued development of Large Language Models (LLMs). LLMs enable AI to deliver data analysis in plain English, taking the guess work out of data interpretation. These enhancements equate to even greater accessibility to cutting edge tools, especially in the SMB space.
Additionally, the market’s ERP juggernauts, including Oracle, Microsoft, and SAP, invested heavily in data centers, databases, and the partnerships needed to reshape AI tools for the future. Through these partnerships, vendors connected their data sources and solutions to enrich the market and cut down on boundaries to data access. For example, by connecting Azure and Oracle’s OCI through Oracle Database@Azure, customers can, “employ Oracle database services running on OCI hardware deployed in Azure datacenters for the first time” (https://news.microsoft.com). Groundbreaking partnerships like this will streamline the movement of businesses to the cloud and mitigate migration risks associated with historical data. This is only one (major) example of how data access is changing for the better.
Software vendors across the market found ways to deliver specialized industry solutions, whether through acquisitions, partnerships, or internal development. From retailers to life science organizations, businesses were finding ways to do more on their existing platforms.
Vendors focused on enhancing their offerings. Innovation played a major role in industry specialization as AI, LLMs, and other advancements made it easier to develop unique or specialized capabilities. This included tools to better predict buyer intent for inventory control, supply chain solutions for greater lot traceability, and intelligent AI assistants embedded directly into solutions to deliver real-time actionable insights. Vendors have baked these groundbreaking technologies into pre-existing solutions for real, transformative growth. Ultimately, businesses were about to realize value at even deeper, micro vertical levels.
Beyond the advancement of technology, 2024 was truly a transitional year. Important pieces were put into place for the explosive market growth expected in 2025. Hype cycles began to settle and made way for business plans that centered around the competitive advantages of AI. Vendors also invested in important infrastructure projects that will pave the way for massive amounts of computing power. These investments occurred on a global scale and will be foundational to the future of technology.
Business began to see the value in emerging solutions and no longer felt overwhelmed by the utopian, sci-fi picture of the future being painted in media. The business applications of AI became more mainstream, allowing organizations to take advantage of tools today, instead of waiting on promises of tomorrow. As we transition into 2025, businesses will need to prepare for what’s to come but can feel confident in the progress that was made in 2024.