HEALTHCARE ERP MARKET ANALYSIS

The global healthcare ERP market was valued at US$ 6.99 Bn in 2022 and is forecast to reach a value of US$ 11.79 Bn by 2030 at a CAGR of 6.8% between 2023 and 2030. The global healthcare ERP market is experiencing strong growth due to the rise in adoption of ERP solutions and rise in patient pool across the globe. Moreover, growing adoption of technologically advanced solutions and need for efficient supply chain management is expected to boost the growth of the market. However, factors such as high cost of the system and implementation and stringent rules and regulations are expected to hamper the market growth.

Global Healthcare ERP Market: Regional Insights

Based on geography, the global healthcare ERP market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Among regions, North America is expected to gain highest share in the market over the forecast period owing to the healthcare digitalization, increasing adoption of ERP solutions, rise in demand for paper-less technology, and government funding on healthcare services and infrastructure in the region. For instance, in March 2019, Oracle Corporation added new capabilities to Oracle EPM (Enterprise Performance Management) and Oracle ERP (Enterprise Resource Planning) Cloud. The new additions include intelligent assistants and AI capabilities for financial controls, improved accuracy, reduction in manual processes, and compliance.

Europe and Asia Pacific are also expected to witness robust growth in the global healthcare ERP market due to the increasing adoption of healthcare IT solutions, growing healthcare digitalization, favorable government initiatives, and well-established healthcare infrastructure in these regions. Central European healthcare association optimizing services with SAP S/4HANA. For instance, Vienna Healthcare Association has implemented 2 SAP ERP systems. Moreover, in March 2023, SAP launched Grow with SAP, a new initiative aimed at enticing midmarket organizations to adopt the SAP S/4HANA Cloud ERP system.

Figure 1. Global Healthcare ERP Market Share (%), by Region, 2023

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Global Healthcare ERP Market Drivers:

Rise in adoption of ERP solutions to drive market growth

One of the key factors expected to augment the growth of the global healthcare ERP market during the forecast period is the adoption of ERP solutions in the global healthcare industry. For instance, the adoption of ERP (enterprise resource planning) in the global healthcare sector can be attributed to various advantages, such as increase in caregiving efficiency and better utilization of resources, offered by ERP software. In November 2022, Google Cloud announced the launch of three new Healthcare Data Engine (HDE) accelerators to help healthcare organizations address common use cases around health equity, patient flow, and value-based care.

Rise in patient pool to underpin market growth

Another factor which is driving growth of the global healthcare ERP market is the rise in patient pool and growing geriatric population around the world. For instance, with the rise in patient pool and growing geriatric population (more susceptible to chronic disease which in turn lead to long-term hospitalization), the burden of healthcare organizations is also increasing. The healthcare ERP system helps healthcare providers offer quality patient care while keeping the operating costs low. Moreover, the ERP system can help a hospital enhance efficiency and drive automation to save on costs. This in turn is driving the growth of the market.

Global Healthcare ERP Market Opportunities:

Rising adoption of novel technologically advanced solutions is expected to offer significant growth opportunities for players in the healthcare ERP market. For instance, rise in usage of ERP systems among healthcare organizations is triggering the demand for these systems to the lower operational cost and improve patient outcomes. In October 2022, Deloitte launched its Oracle MyCloud ERP that can help fast growth and private clients accelerate business transformation. The offering helps organizations to get up and running quickly on the platform while eliminating the barriers of talent constraints and high upfront costs, which are often associated with ERP implementations.

Need for efficient supply chain management is expected to offer significant growth opportunities for players in the global healthcare ERP market. Enterprise resource planning (ERP) systems have helped healthcare organizations monitor and control costs, productivity, supplies, and inventory. The way to overcome supply chain challenges lies in the ERP implementation. For instance, the outbreak of COVID-19 disrupted supply chain and demand cycles, But the ERP implementation at Bayhealth (Bayhealth Medical Center, US) has led to the supply chain management efficiencies even in the face of global supply chain disruptions.

Global Healthcare ERP Market Trends:

Increasing awareness is a recent trend

Healthcare organizations across the world are growing aware of the benefits associated with these advanced technological solutions (healthcare ERP), such as reducing operational costs, delivering high-quality patient care, improve patient outcomes, rise in caregiving efficiency, better utilization of resources, and eliminating data siloes in back-end operations, which is turn contribute to the increasing demand for novel or technologically advanced ERP solutions. This trend is expected to continue over the forecast period, driving the market growth.

Growing adoption of ERP is another trend

Increasing adoption of ERP systems amongst small and medium organizations is contributing to the growing demand for ERP solutions to reduce operational costs and improve patient outcomes. The system allows healthcare organizations to amalgamate data generated from human resources, manufacturing and inventories, supply chain cycles, and finances & accounting, and help optimize back-end processes. Thus, they have begun adopting ERP systems. This trend is also expected to continue during the forecast period, driving the market growth.

Global Healthcare ERP Market Restraints:

High cost of the system and implementation to hinder market growth

One of the key factors expected to hamper the growth of the global healthcare ERP market is the high cost of the system and implementation. For instance, ERP is an expensive technology, and its expense depends on the scope of implementation, department complexity, and ERP vendors. ERP software, security software, computer hardware, and network equipment, among other are essential for the implementation of ERP systems, which in turn increase the cost of implementation. Add-ons and customization are also expensive. Moreover, the cost of change for already installed ERP is also very high. This in turn is restraining the market growth.

Stringent rules and regulations to hamper market growth

Another factor which is hampering the growth of the global healthcare ERP market is the stringent rules and regulations. For instance, European Union (EU) has several regulations that companies must comply with when using ERP systems. The General Data Protection Regulation (GDPR) sets strict rules for the handling and processing of personal data. Furthermore, companies must comply with national regulations when implementing the ERP system. These rules may differ from country to country. Thus, it's important to understand the rules and regulations.

Figure 2. Global Healthcare ERP Market Share (%), by Function, 2023

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Global Healthcare ERP Market Segmentation:

The global healthcare ERP market report is segmented into Function, Deployment, and Region.

Based on Function, the market is segmented into Inventory and Material Management, Supply Chain and Logistics, Patient Relationship Management, Finance and Billing, and Others. Out of which, Inventory and Material Management Segment is expected to dominate the healthcare ERP market during the forecast period and this is attributed to the need for inventory and material management in the healthcare industry.

Supply Chain and Logistics Segment is also expected to witness significant growth in the near future and this is owing to the rise in patient pool across the globe.

Based on Application, the market is segmented into On-Premises and Cloud. Out of which, Cloud Segment is expected to dominate the market over the forecast period and this is attributed to the rise in adoption of cloud-based ERP systems/solutions.

Global Healthcare ERP Market: Key Developments

In February 2023, AWS Launch Wizard which allows to automate deployment of SAP S/4HANA Foundation applications, and SAP S/4HANA 2022.

In September 2022, Exact acquired Weclapp, a provider of cloud ERP software, from 3U Holding, a German holding company.

In July 2022, Infor announced a new partnership with Syntellis Performance Solutions to provide Infor’s both existing and new healthcare customer’s access to Syntellis’ Axiom Healthcare Suite of intelligent planning and performance solutions, giving users robust EPM tools to improve cost of care and operational outcomes for their organizations.

Global Healthcare ERP Market: Key Companies Insights

The global healthcare ERP market is highly competitive. This is attributed to the growing adoption of ERP systems or solutions around the world, as a result, players in the market are focusing on launching novel products in the market.

Some of the key players in the global healthcare ERP market are SAP, Sage Group PLC, QAD Inc., Odoo, Infor, Aptean, Microsoft, Oracle Corporation, McKesson Corporation, and Epicor Software Corporation, among others.

*Definition; Healthcare ERP is a system that can help healthcare organizations like hospitals to overcome the hurdles they have been dealing with for so long. Healthcare ERP solutions promote efficiency by providing large-scale oversight into all of the administrative and clinical functions of a healthcare system.