Market Overview

The questionnaire was conducted among private domestic companies during June and October 2024 regarding the deployment of enterprise software i.e. ERP (finance and accounting, HR and payroll, sales administration, and production management/SCM), CRM and SFA, and was responded back by 509 enterprises. This press release discloses SaaS usage rates over time and the analytical results of future SaaS implementation plans.

Compared to the 2016 survey, more companies opted for Software as a Service (SaaS) for the deployment of ERP, CRM, and SFA, despite some user differences. Specifically, SaaS deployment increased by 5.7 points in finance and accounting, 8.3 points in HR and payroll, 3.9 points in sales administration, 5.5 points in production management and supply chain management (SCM) for process manufacturing, 0.3 points in production management and SCM for discrete manufacturing, and 39.6 points in CRM and SFA. The increase in SaaS users owe to the ability to access new features soon after the deployment.

Noteworthy Topics

SaaS Increased in Next Plans for Enterprise Solutions

The number of companies selecting SaaS is likely to grow even more. This is evident from the percentage of companies that plan to deploy or update SaaS at their next opportunity. More than 20% of respondents in each area planned to do so, except in production management and SCM (process manufacturing), where there were too few respondents to count.

For instance, 25.6% of respondents in finance and accounting, 32.4% in HR and payroll, 21.2% in sales management, and 35.3% in CRM and SFA plan to implement SaaS. Previously, many companies developed in-house systems for sales management, production management, and SCM. However, the shift is expected to occur from in-house systems to SaaS, due to SaaS's lower operational and maintenance burdens. This makes SaaS an attractive option for companies experiencing labor shortages. 

Future Outlook

Companies often use add-on features in addition to standard features to supplement what is needed when deploying ERP. In recent years, however, more companies use Fit to Standard, which is to make the work processes to cater to the system and service features, rather than making the systems to fit to work processes. This has made the environment mature for SaaS deployment. Nevertheless, user companies that use 100% standard and do not customize the product are few. Therefore, many vendors respond to each company’s requirements.

Many vendors focus on the alignment with application programing interface (API). It is based on the idea that API disclosure facilitates mutual alignment with different systems, allowing to compensate what lacks from external systems rather than developing a new system. Since SaaS has lower hurdles to enter, vendors, mostly start-ups, provide various services by leveraging unique technologies. Vendors consider that aligning and employing existing systems, if any from outside, are more convenient and take less labor than developing a new system from scratch. This is advantageous for user companies, as they can use many features.

This flexibility and diversity are likely to boost the usage of SaaS furthermore.

Research Outline