Your 5-Step Guide to Selecting the Right ERP System

So, you are interested in purchasing your first ERP system, or you have outgrown your current system and are considering your options. There are dozens of software solutions to choose from, where do you start?

Before you make this decision, remember what is at stake.

The right system can standardize and streamline business processes, improve visibility across the different functions of your business, automate tasks, improve reporting, and more.

The wrong system will result in not only a costly mistake but also lower adoption and use by your employees, which can lead to lower productivity and lost revenue.

With this much risk involved, diligence in the selection process is key. Follow these five steps to ensure your decision is sound.

Step 1: Planning for an ERP system

Arguably the most important step of your ERP selection, the planning stage is where you envision how the ERP system will work with the business processes of your company. These processes align with your organization’s overall goals and strategy and understanding them from the beginning will save time later during implementation. Implementers will get into the nitty gritty of your processes when configuring the system.

During this step, you will need representation from all functions that will be using the system to elicit the appropriate requirements—this also helps with buy-in from the team after the system is implemented.  Most importantly, you’re all in agreement that you will configure, not customize, your ERP.

The ideal ERP system should meet both your current requirements and anticipated requirements for the future, so be sure to do a gap analysis, as well.

Step 2: Research ERP software solutions

Next, you begin the step of researching software solutions that will best fit your needs.  There are well-known ERP systems, up-and-coming systems, multiple editions of one system . . . the list goes on.

Where do you start? Ask yourself the following questions to help narrow down the search:

• How big is our organization? Can it scale as we grow?
• Do they have expertise in our industry or to meet our most critical needs?
• What is your budget?

Then, begin your research. A few go-to sources for the latest top-rated technology and advice on ERP systems include:

• Gartner
• G2
• TechnologyAdvice.com

Or consider hiring a consultant that specializes in ERP software selection. This consultant can lead this process throughout, starting from planning. You’ll want to someone who offers independent advice, so ask if they receive any sort of financial incentive arrangement with any ERP vendors.

Step 3: Identify the ERP software options you want to test

At this point, you should have a list of ideally no more than three ERP systems that you’d like to consider. Now, it’s time to reach out to the vendors and start scheduling demonstrations of their systems.

Generally, vendors ask a number of questions about your organization and business processes before their first demo—fortunately, you’ve already done this homework and should have clear answers ready to share.

Be prepared for the potential to require multiple product demos per vendor—each meeting is a learning experience for both parties, and subsequent demos can further home in on a system that will fulfill your organization’s needs.

Step 4: Evaluate the ERP software options

Once you have a thorough understanding of how the ERP system will work with your current and future business processes, you’re ready to begin your evaluation.

Consider hiring certified system integrators with industry experience to implement your ERP. They can offer a more consultative approach to understand the details of your business processes to implement your ERP. If so, involve them in the evaluation process as you’ll be closely working them. ERP vendors should be willing to provide recommendations from their network.

Think of evaluation as leveling the playing field for every system as you answer questions about each product. There are several basic questions to consider and even more nuanced questions relating to your organization that you will want to ask.

• Does this meet our needs?
• What is the total cost of ownership for the first year and subsequent years?
• What are the strengths and weaknesses of each category within the system?
• How easy is it to use?
• Can it integrate with our other systems?
• What is the support community like for this system? Does it have a robust partner network?
• Are there any associated risks?
• What is on the technology roadmap for the system?

These are just a few examples of questions you might have when evaluating each system—you should customize list with your own questions. Make sure you are evaluating all systems against the same criteria.

After several rounds of demos and email correspondence, you may be forming relationships with the vendors. Unless that same vendor is implementing the system, try not to let these relationships influence your purchasing decision. The benefits of the right system will far outweigh the benefits of a friendly vendor in the end.

Step 5: Select your ERP software and begin implementation

After evaluating the systems, a clear choice should emerge, and you will choose the system you want to move forward with implementing.

In the case that your evaluation doesn’t result in a clear singular choose (i.e. it’ close between two systems), reach back out to those vendors, ask more questions, and schedule another demo on a specific topic. Do what you need to do to arrive at a confident conclusion.