The ERP software market is one of the most niche sectors of the tech industry, and this has been the case over the last decade. However, despite this, it grew by 11% annually and is set to top $123B by 2030.
The shift to cloud computing, accelerated by the COVID-19 global pandemic, is evident with 68% of ERP customers accelerating their move to cloud-based systems. The global cloud ERP industry is growing at 13.3% annually, surpassing the 5% overall IT growth spend, with most ERP spending projected for cloud deployments by 2025.
The current ERP landscape and how it impacts on enterprise quality engineering
Despite benefits like real-time data access and enhanced security, cloud-based ERPs require more quality engineering due to frequent updates compared to on-premises solutions. Cloud-based ERPs undergo around four quarterly updates, while on-premises systems require major upgrades every one or two years. Moreover, cloud ERP users often lack the flexibility to delay updates, necessitating certification and implementation within a short window. This highlights the need for rigorous testing and agile deployment strategies.
Enterprises are grappling with the increased need for testing due to more frequent updates in Cloud ERPs. This dilemma forces them to balance between testing too little which risks application downtime, or testing too much, which slows down feature adoption and wasting resources. The strain on testing teams is further compounded by declining quality assurance and testing budgets, dropping from 35% of IT budgets in 2023 to just 23% so far this year. Consequently, the benefits of Cloud ERPs can be negated by the substantial time, money, and effort that is required for testing.
Despite the rapid growth of Cloud-based ERP adoption, approximately 50% of ERP customers still operate fully on-premises systems, with many planning to remain on-premises for the next 2-3 years. Consequently, organizations are increasingly integrating both cloud and on-premises systems from various ERP vendors. This trend, known as the “composable ERP” strategy, is gaining traction, allowing companies to use ERPs in a more modular fashion. Gartner reports that organizations now utilize an average of 75 technologies and business applications, a number that rises exponentially with employee growth. Larger companies often employ over 200 distinct technologies and applications.
How does the increase in composable ERPs impact quality engineering?
From a testing and quality assurance standpoint, ensuring seamless integration and data transfer among applications is crucial. Even a minor change in one application can trigger a cascade effect on others. For example, an update in SAP necessitates testing not only its functionality but also its connectivity with other applications. Failure to transfer data accurately between ERP modules can result in widespread issues, adding to the workload of already stretched testing and QA teams. Consequently, the adoption of end-to-end testing platforms is rapidly increasing, enabling organizations to assess changes across their entire tech stack. To cope with expanding tech stacks and composable ERPs, organizations must either utilize multiple testing solutions, requiring additional tools and expertise, or opt for an end-to-end testing platform that spans all applications and technologies.
What are the current ERP trends when it comes to quality engineering?
Modern enterprises prioritize swift and reliable ERP technology to ensure consistent performance for end-users. There are significant financial implications of application failures, and as a result a growing acknowledgment that effective software testing demands specialized knowledge and professional expertise rather than being an afterthought. Currently, ERP testing is predominantly manual, with over a quarter of customers automating less than 25% of their testing. However, there is a shift towards automation, with 73% of organizations aiming for a 50:50 or 75:25 balance between automated and manual testing. This trend is supported by the rapid growth of the test automation market, projected to reach $40B by 2027, outpacing the broader testing market.
Solving the challenges around ERP quality engineering with a solutions-based approach
There are several ways to solve some of the challenges around EPR testing. These include:
Scalable automation solutions in ERP testing offer a suite of powerful functionalities that can transform the efficiency and effectiveness of business operations. With features such as fast onboarding, no-code/low-code platforms, resilience to frequent changes, and multi-packaged application support, these solutions empower organizations to streamline their processes and adapt swiftly to evolving needs.
If organizations implement these innovative tools, it will not only enhance their EPR systems from a quality engineering perspective, but it will also help to position them in order to stay competitive. Scalable automation can help organizations achieve greater productivity, agility and accuracy in ERP testing.
As a Senior Automation Manager of the Enterprise practice in India, Bal Mukund Agrawal’s passion and determination lies in maximizing user experience within complex test automation programs. He has a proven track record of leading the overall automation program for the Enterprise team in India, successfully delivering over 20 projects for various clients over the past 3.5 years.
Connect with him on LinkedIn here.
