9 ERP trends for 2025 and beyond
Multi-tenant SaaS, AI and automation are reshaping an ERP market that continues its long march to the cloud, as buyers seek modernization, efficiency and faster implementation.
While ERP is still mostly viewed as a stalwart, relatively unchanging part of doing business, it is no longer mostly for back-office functions, like accounting and procurement. ERP increasingly drives strategic initiatives in process automation, customer experience and e-commerce and serves as the indispensable hub of digital transformation.
It comes as no surprise, then, that demand for ERP continues to grow. According to research from HG Insights, the global ERP market has grown by 8% since 2022, and companies are expected to spend $147.7 billion on ERP software in 2025. Amid this growth, ERP trends have been strongly influenced by new technology, especially generative AI, and fast-changing business requirements, including the push for environmental sustainability and more stringent government reporting.
"It's a fun time in the ERP world," said Chris Perry, ERP lead in the M&A practice at the consulting firm West Monroe, noting the trend of large ERP vendors snapping up companies with complementary technologies, such as AI, Industry 4.0, SaaS and industry-specific ERP.
Here's a look at the top ERP trends for 2025 and beyond that characterize the state of the art in ERP.
1. Clean core continues to lay groundwork for SaaS ERP
In the past few years, vendors have adopted clean core deployment and are developing artifacts and accelerators to get behind it, according to Perry. A clean core strategy involves standardizing ERP business processes and data and ensuring that any extensions and integrations follow cloud standards and are geared to running in the cloud, especially multi-tenant SaaS.
SaaS ERP will also continue to grow because, as vendors develop new capabilities, they'll want to push them out to users quickly, Perry said. In the old, on-premises world, users might have to wait two years to upgrade the system. But, with SaaS, they can begin working with new features as soon as the vendor makes them available.
"We're seeing an ongoing investment from [organizations] to move toward a SaaS model," Perry said. "Part of that is because of its inherent merit, and part of that is driven by software vendors … only offering that particular deployment model."
As part of the trend, third-party vendors will continue to develop tools to remediate and sometimes even completely redesign the code in on-premises ERP systems in preparation for the migration to SaaS, Perry said.
2. AI becomes more embedded in software
As AI continues to gain adoption, companies can expect to see more AI features in the ERP products they're considering buying. For example, SAP released AI apps that handle more than 200 business processes, embedding them directly into its ERP software, according to Perry.
"SAP is really trying to embrace AI as part of ERP," he said, noting that SAP integrated its software with Microsoft Copilot and is creating AI copilot-type UIs that will cover 70% of its software by the end of the year.
3. AI facilitates code development
If SAP's approach is any indication, another big ERP trend will be using AI to assist with code development. "We're in the early days of using AI to write code," Perry said, adding that AI is nevertheless helping to power some parts of the development process.
He noted that SAP rolled out AI for software development to SAP consultants, which resulted in a 20% productivity improvement.
4. Vendors embrace tools to speed implementation
Expect to see ERP vendors offering tools that can close the gap between the technical and business sides, Perry said, citing as an example SAP's purchases of vendors that help to align business processes and enterprise architecture, which, in turn, facilitates implementation.
"They're making it easier to have the business discussion and translate it into the software, training and testing," he said.
5. AI powers homemade add-ons
With AI providing a viable option for quickly writing code, this could be the year companies return to writing custom code to address specific business needs in their ERP systems, Perry asserted. While no one will likely code their own ERP systems, organizations will use AI to connect to ERP systems through APIs and run tasks like extracting information from the ERP platform to optimize their supply chains during a shortage, he said.
The trend is facilitated by the ease of writing such "point solutions," using AI to do so efficiently, and the fact that modern ERP systems are rich with APIs, according to Perry.
6. Automation and analytics become requirements in RFPs
Automation, especially through robotic process automation and similar tools, used to be accomplished with specific products or ERP projects. But, now, the requests for proposal (RFPs) for ERP systems ask for enterprise performance management, analytics and automation to be built in, according to industry experts. What used to just be primarily for core ERP finance functions or HCM has ballooned into other applications, including automation.
Similarly, experts noted that analytics have become another must-have in ERP systems, so most RFPs now include analytics when companies are looking to modernize their systems.
7. Demand rises for industry-specific cloud
The demand continues to build for more industry-specific cloud products, according to experts, but it comes with tradeoffs. Industry-specific ERP tends to be more expensive than generic ERP offerings that can be customized. Buyers also need to be aware of a shortage of industry-specific skill sets if they go this route.
Nevertheless, organizations are expected to adopt industry-specific cloud offerings at a rapid pace in the coming years. IT service firms provide accelerators to meet the demand, and ERP vendors continue to introduce products tailored to certain industries.
8. Regulations determine how data is stored
Organizations that operate in multiple countries, especially in the EU, will need to be cognizant of who accesses their data and how it's hosted, as sovereignty regulations are becoming stricter, according to industry experts. They'll need to stay on top of new regulations and consider them in the early design and planning stages of their IT architecture.
Currently, EU data sovereignty regulations require European data to be stored on servers located in the EU, with some exceptions. The Data Act, along with the Data Governance Act and GDPR, tightened privacy controls and extended protections to IoT devices, which have become more prevalent in manufacturing and industrial applications, many of which are integrated with ERP.
9. Midmarket continues to adopt alternative ERP products
While SAP, Oracle and other large vendors of traditional ERP offer solid products, they're not for everyone. In 2025, more buyers in the midmarket and below will be looking to alternative, cloud-first or open source ERP products, according to experts. SMBs typically lack the time and resources to spend 18 to 24 months implementing an ERP system. They look for quick wins from cloud-first ERP systems, which tend to be less complex than the most popular offerings from larger ERP vendors and come with preconfigured templates.
Christine Campbell is a freelance writer specializing in business and B2B technology.
