How to Choose ERP Software

If you're faced with an ERP project then some of the first questions you'll ask are: 

How do I choose ERP software?

How do I shortlist ERP software for evaluation?

Which ERP software should I shortlist?

In this article, we'll guide you through how to evaluate, select and choose enterprise resource planning (ERP) software for your organization and navigate through some of the best practices and challenge you will face during the process.

Understand your ERP Selection Criteria

Your ERP selection criteria needs to be defined long before you begin speaking to ERP software vendors and providers. 

Typically ERP selection criteria will include factors such as:

1) ERP Functional Requirements & Fit

This is where you should quantify how well your chosen ERP system meets your functional requirements. For example, does it accomodate your legal structure, localizations and the needs you have across the business?

We explore how to build your ERP requirements in further detail below.

2) Pricing & Commercials

Several ERP solutions on the market can enable and improve almost any business process, but the question often comes down to the cost and feasability of doing so. 

ERP software licenses for some ERP solutions can often create a financial barrier to entry. For a breakdown, see our guide to ERP costs.

On the other hand, the configuration of this ERP software can often be too expensive to consider. 

You should therefore try to quantify the budget you have available at the beginning of your ERP shortlisting process.

3) Industry Expertise

It's a good idea to look for ERP software providers who are specialized in your industry. ERP vendors and partners that are specialized in your industry will have a proven solution set and expertise in configuring and customizing ERP software to your specific business processes. 

Choosing an ERP provider with this capability is likely to reduce the cost of your ERP implementation plus drastically improve your results.

4) Company Cultural Fit

When choosing your ERP software, you also need to choose a company to implement it and this company is likely to feel like part of your own company for the time it takes to install your system. 

It's therefore important to choose ERP software providers that have a compatible company culture with your own - one way or another.

5) Roadmap & Strategic Fit

ERP systems are an investment and asset to your business that can affect your company valuation, scalability, profitability and beyond. ERP systems literally become intertwined with the way you operate.

You should factor this into your decision when choosing your ERP software. It is just about cost, functional fit but also the long term alignment and value the solution brings to your business and plans for the future.

6) Standard Vs. Customization

Defining your ERP Requirements

Before you begin to seriously consider which ERP software should be on your ERP shortlist, you have to define your ERP requirements. 

Defining your ERP requirements means documenting the features, functionality and business outcomes that your ERP software needs to have. 

This is a collaborative process which should include key individuals from across your business such as your finance, operations, sales and back office teams. 

Once you understand your ERP requirements, they need to be documented in a logical format. This document can then be distributed to ERP vendors and software providers. 

Typically, ERP requirements are document in an excel spreadsheet such as our ERP requirements template, download our example today to speed up your ERP requirements process. You can also prepare your ERP RFP questions alongside this process:

Popular ERP Software

1. Oracle Netsuite

2. SAP Business One

3. Acumatica

4. Microsoft Dynamics 365

5. Infor Cloudsuite Industrial

6. Workday