According to the Worldwide Semiannual Software Tracker published by International Data Corporation (IDC), enterprise resource management (ERM) applications, will record a compound annual growth rate (CAGR) of 10% in Europe between 2023 and 2027.
ERM refers to applications designed to automate and optimise business processes related to resources required to meet business or organisational objectives.
The fastest-growing segment of this market will be human capital management (HCM) applications, with an expected CAGR of 13,5% for the same forecast period.
The European HCM market grew 17,6% year on year in 2022, and this momentum continued well into 2023, with growth for the first six months of the year reaching 17%.
European organisations are struggling with ongoing talent shortages and are increasingly seeking tech solutions to streamline their talent acquisition, nurture employee experience, and influence management processes.
While other areas of internal business processes, such as finances, contracts, and facilities have been digitalised over the past years, people management has hidden potential for future growth.
Human resources (HR) departments currently possess or will soon acquire a valuable reservoir of data as a result of the digitisation of HR processes. However, the full potential of this data remains largely unrealised due to insufficient analytics capabilities and the use of outdated systems.
“To successfully evolve into data-driven entities, HR units need to adopt technology that facilitates the strategic utilisation of data. Embracing a data-centric approach will enhance the role of HR and transition it from being a support function to becoming a strategic partner within businesses,” says Tomas Doktor, research manager with IDC European Software Data & Analytics.