Investing in the right enterprise resource planning (ERP) software is key to driving future growth and transforming the way you do business. By integrating core functions ― from supply (manufacturing, operations, and personnel) to demand (sales, service and fulfillment) ― modern ERP software provide a single source of truth. Equipped with AI and automation, they streamline workflows, reduce manual tasks and boost efficiency across finance, HR and supply chain processes, all while supporting scalability.
However, not all ERPs are created equal. Choosing the right one can feel overwhelming, with many factors to weigh for the best fit and ROI. This guide simplifies the process with a 10-step ERP framework to help you evaluate and select the ideal ERP. Here’s what to expect:
Before diving into enterprise applications like Sage Intacct, NetSuite, Microsoft or Workday, take the time to clarify your specific needs. Don’t overlook this phase! Addressing these early steps will ensure a more effective, efficient selection process. Work through these core areas:
Now that you’ve defined what you need from your ERP system, consider who should be involved in selecting an ERP and implementation decision-making. This list includes executive stakeholders, business process owners, functional decision-makers as well as IT. Remember, your ERP impacts more than accounting, so include every stakeholder who could be affected by the new system.
Before you journey further, understand where you are right now. An honest self-assessment of your collective current project planning readiness and risk tolerance will help you determine the best place to start your ERP project.
Ask questions like: How well-defined is our ERP vision already? How mature is our thinking around each of the key project elements listed below? What do we have covered already? Where do we think we want/need help?
With an idea of how ready you are, move on to your risk assessment.
All ERP projects face risks, so it’s important to anticipate potential obstacles. While focusing on best-case scenarios is natural, it’s prudent to prepare for setbacks. Your ERP team should openly discuss your organization’s risk tolerance and potential impacts of each risk area listed below. Also, include risk areas important to your company’s success (e.g., rapid IPO readiness or FDA requirements).
Business Risk
Pricing/Contract Structure
Change Management
Compliance
Product Risk
Project Delivery Risk
Operations Risk
Data Risk
In this step, you and your ERP team will assess your current state, define business goals and establish success metrics for the ERP selection process. Collaborate closely with IT to develop an ERP strategy, as selecting an ERP is essentially choosing a core IT platform for your organization.
The ERP is critical because it:
As AI becomes a driving force for business transformation, your ERP strategy should also prioritize AI-driven capabilities such as:
Additionally, ensure the ERP can centralize and structure data to support future growth and advanced analytics needs.
IT will help you determine your ERP deployment model ― on-premises, cloud, hybrid or SaaS ― explaining the pros and cons of each. Have IT provide a list of technical requirements for the ERP, including AI-readiness and data infrastructure needs, to guide your conversations with vendors.
With your business vision and IT input, you’re ready to start building your list of requirements and selection criteria. Work with your ERP team to outline the desired fit, functionality and features. Prioritize your list into “must-haves,” “nice-to-haves” and “not relevant.” Ensure team buy-in so that you are working from an agreed-upon list of priorities.
If you’re unsure what the ERP should do, start by discussing:
Don’t hold back — dream big and imagine what’s possible!
Now is the perfect time to reassess your current technology customizations before including them in your new ERP scope. Ask:
A new ERP may already include features that replace your customizations. Focus on transformation and adopting more automated, efficient business practices.
Once your ERP requirements are set, use a scorecard to evaluate vendors.
Our ERP Selection Criteria Scorecard uses a four-cornerstone framework to help you score vendors, organize data and easily compare options. This framework includes:
When assessing ERP options, start with evaluating how the solution aligns with your business needs and IT strategy. Focus on:
The second cornerstone is to evaluate each solution vendor’s implementation and support approach. Key questions:
The third cornerstone focuses on addressing predictable risks tied to each solution. Simply hoping for the best isn’t a strategy. Be intentional and proactive in identifying and mitigating risks, such as:
When ERP solutions seem similar in other areas, risk mitigation often highlights the real differences between vendors.
The fourth cornerstone is conducting a thorough cost/benefit analysis to ensure a true apples-to-apples comparison. Consider:
While sunk costs (e.g., investments in current systems) can’t be recovered, they shouldn’t overshadow the focus on future value.
Finally, decide whether to take a top-down or bottom-up approach for your evaluation process. Each approach has its strengths and trade-offs, so align your decision style with your business goals, leadership preferences and timeline.
This approach prioritizes speed and focuses on high-level business challenges. It’s ideal for organizations with strong executive leadership that values quick decision-making.
Steps:
This approach is more detailed and thorough, making it ideal for analytical stakeholders who want to minimize risk and address all requirements.
Steps:
Which decision approach is right for you?
Congratulations! You are now ready to start researching and contacting ERP vendors.
With your ERP requirements in hand, start researching ERP solution vendors by gathering preliminary information, eliminating poor fits and qualifying those worth pursuing further. Use a variety of resources:
Understand each vendor’s origin story — why it was built (which will speak to fit) and how they operate today — to assess alignment with your needs. Focus on evaluating:
Use this comprehensive checklist to evaluate major ERP providers. It includes key topics and critical questions to ask each vendor.
To ensure a like-for-like comparison, create a spreadsheet with key topics and questions to compare each vendor. While some ERP vendors may offer comparison tools, include your own specific “must-haves” and “need to know” to make sure your evaluation reflects your needs.
Your initial ERP research should narrow your list down to top contenders. Once you’ve identified them, it’s time to contact vendors and take the next step.
Before you connect with any ERP vendor directly, remember they’ll have questions for you, too. Be prepared to respond to the following questions:
Keep these tips in mind to ensure productive vendor meetings:
After initial discussions with top ERP contenders, narrow your list by eliminating vendors that exceed your budget or lack key functionality and product fit. Then, schedule demos with your shortlist.
Since most ERP vendors have comparable basic functionality, focus on your top 10 must-haves. Here’s how to make the most of your demos:
Once you’ve completed your demos, filled out your rating scorecards and documented vendor discussions, it’s time to discuss the results with your ERP team. Focus on:
Draw up a list of follow-up questions for vendors to clarify any concerns or gaps. Set a deadline for their responses, or schedule a final round of meetings to address outstanding questions.
After vendors address your questions, assess whether any responses prompt changes to your ERP requirements or approach. If adjustments are needed, provide your shortlist with a revised requirements list and request formal proposals.
Carefully review proposals, paying close attention to vendors’ weekly implementation work plans. Focus on how each vendor handles:
Once you’ve reviewed all vendor proposals, identify the implementation approach — or specific elements — that best meet your needs. Then, direct each vendor to adjust their approach to match your requirements.
After you’ve received revised proposals, it’s time to name your ERP finalists.
This is the big moment! Congratulations! You and your team have done a ton of work and sorted through a lot of information. You’re so close to making a final decision.
Choose your top two finalists and conduct one final evaluation by checking their references. Use this opportunity to validate your decision and gain insights from others who’ve worked with the vendor.
Questions to ask references:
Based on what you learn, all the data and feedback you’ve gained and a consensus among your team, select your ERP provider. Notify the vendor, agree on business terms and proceed with the contract.
And don’t forget to celebrate! You’ve accomplished a major milestone in your business’s transformation journey.
ERP projects can fail for many reasons, but knowing the common pitfalls helps you avoid them and set your project up for success.
These risks are real, but with careful planning, clear communication and a strong team, you can avoid them and set your ERP project up for success.
To learn more about modernizing your ERP, getting a project back on track or setting your business up for sustainable growth, schedule your complimentary ERP consultation.
