South African companies are transforming their operations with enterprise resource planning (ERP) systems that streamline processes, boost productivity and unlock real-time insights across the organisation.
By Anthony Poltera, value prototyping lead at SAP Africa
As companies accelerate their digital transformation plans to take advantage of powerful AI-enabled technologies, ERP systems have emerged as essential strategic enablers of innovation and efficiency.
Modern ERP systems enable companies to remain agile and adaptable while maintaining the highest levels of regulatory compliance and industry best practices.
South Africa’s ERP market is among the most mature on the continent, and is set to expand at an annual compound growth rate of 14,9% between 2024 and 2030.
As change accelerates in the wake of ongoing technological disruption, decisions over ERP decisions are rapidly evolving. Understanding the forces shaping ERP success in modern South African enterprises is essential to unlocking the growth and resilience benefits presented by these systems. And as more companies rush to unleash the power of business AI in their operations, the value of trusted, accurate business data in ERP systems is more valuable than ever.
Shifting ERP priorities
Historically, ERP selection was driven by cost, functionality, and the need to standardise operations. Today, the conversation has shifted: business leaders are no longer just looking to automate, they’re looking to transform.
Modern ERP decisions are increasingly centred on strategic alignment with long-term business goals, cloud-readiness to enable agility and scale, and the need for real-time insights through embedded business AI and analytics. Overall, companies are making decisions over their ERP systems based on how well these systems will support innovation across the enterprise.
The shift from on-premise to cloud has picked up pace, especially in South Africa’s competitive mid-market.
Hybrid models remain relevant, particularly in regions with infrastructure constraints, but the long-term trend is clear: businesses want platforms that evolve with them.
And, with the ongoing support of programs such as RISE with SAP, which helps on-premises SAP ERP customers with tailored cloud migration and modernisation efforts, more companies than ever are adopting clean core principals built on the power and scalability of cloud.
Understanding the right ERP fit
However, ERP is not a one-size-fits-all solution. The right system must reflect the specific needs of each company’s industry, operations, and local environment.
For example, manufacturers need deep supply chain, production and asset management functionality, while retailers rely on omnichannel integration and real-time inventory data. Service-based firms prioritise project visibility and resource optimisation. And companies in the mining, utilities and public sector industries require robust compliance, safety and sustainability tracking capabilities.
Essential to this is an ERP clean core strategy, which is a set of guiding principles that reduce complexity, boost agility, increase the pace of innovation and leverage business value through reliable data and AI. Data by SAP estimates that a clean core can deliver 80% less software customisation, halve database size, and automate 70% of core business processes.
However, even when the core ERP platform remains consistent, it’s often the industry-specific features, local extensions, and partner-led innovation that determine success. The more niche your requirements, the more essential it becomes to work with a provider and ecosystem that understands your business from the inside out.
Localisation, co-innovation key
One of the most significant changes in how companies select their ERP system is the rise of what some call the “glocal” mindset. In other words: globally capable, but deeply localised.
In South Africa, this means ERP platforms must offer out-of-the-box support for B-BBEE reporting, SARS compliance, POPIA requirements, ESG regulations, and localised payroll and tax logic.
Today’s buyers are less willing to accept localisation as a post-go-live add-on. Instead, they’re demanding systems that deliver preconfigured, regulation-ready functionality from day one.
Here, powerful new business AI applications are revolutionising decision-making and compliance. By embedding AI across finance processes, organisations can make decisions based on real-time data and predictive analytics powered by generative AI while also protecting business value through streamlined regulatory and sustainability standards. SAP Business AI for example helps identify new revenue opportunities to power growth, boost financial resilience and improve operating cash flow.
There’s also a move towards collaborative prototyping and pilot programs. More South African companies are working with ERP vendors and implementation partners to test use cases using real operational data before a full rollout begins. These companies leverage a rich partner ecosystem that brings deep domain knowledge, local best practices, and the ability to translate business needs into workable ERP configurations.
This co-innovation approach allows companies to conduct early validation of complex requirements, accelerate time to value, reduce implementation risk, and achieve greater stakeholder alignment. In a market as diverse and regulated as South Africa, this approach helps businesses tailor ERP to real-world scenarios and build executive confidence along the way.
Perhaps the most telling change is who’s making decisions over which ERP system to deploy. What was once a purely IT-driven conversation has moved firmly into the boardroom. Today’s ERP platforms must serve not just as operational tools but as strategic enablers. Modern ERP systems are expected to simplify complexity, accelerate transformation, and support bold business moves.
It’s no longer enough to manage the day-to-day. ERP is foundational to the ability of businesses to lead the way forward.