Business management software relates to applications used to manage and streamline day-to-day administrative functions of businesses. Such functions include accounting, tax reporting, payroll and human resource (HR) management. This research focuses on European businesses that develop proprietary software systems for the aforementioned functions.

The competitive landscape of business management software developers remains fragmented across segments. Regulatory and language barriers across regions inhibit the organic expansion of global ERP giants, thereby providing protection to local incumbents and players offering proprietary technological features. The European market is set for further consolidation as leaders aim to build end-to-end finance and HR management platforms via continuous acquisitions, both domestically and abroad.

The sector attracts significant interest from financial buyers, with ~70% of identified assets being sponsor-backed (August 2022). We believe this is mainly attributable to the lucrative bottom-lines of identified software developers and the high stickiness of customers. Furthermore, some businesses have the potential to serve as strong platforms and to capitalise on significant buy-and-build opportunities available in the market.

While business management software developers have a limited ecological footprint, they can empower small- and medium-sized business customers by making sustainability reporting more accurate and less time-consuming. At the same time, the structural shortage of talent across the broader software industry paired with high employee turnover rates remain key issues, with industry leaders aiming to boost tenure by participating in the STEM education of prospective employees from early on.