How to choose an ERP software using 10 criteria

First criteria to choose an Enteprise Resource Planning (ERP) software: your needs

This is by far one of the most important criteria on the list, and the most complex. You need to determine your actual needs, evaluate your business processes, essential functions, and the quality you need from your ERP. In fact, this first criterion will enable you to get a real picture of the situation.

To know how to choose the right erp system, ask some questions:

• What are the pain points of your actual system?
• Are your clients, or sales, suffering because of those gaps?
• In the next ten years, what are the projects for your enterprise?

And don’t forget the functionalities that are performing well with your current ERP because you obviously don’t want to regress.

Is creating this picture a bit daunting? For sure. This is why we recommend that you take your time, consult your colleagues, and look to get other points of view from people who work with the ERP, from the vice-president to office employees, and even production workers.

To ease the discussion, prepare some surveys, and plan group meetings. You will be able to more easily get a consensus about needs, and their priorities.

After that, your job will be to organize those priorities, from critical to very important to secondary. Make sure that the chosen software will address all the critical needs, and satisfy most of the very important ones on your ERP system selection checklist.

Second criteria to choose the best ERP system: your organization type

Once your needs are situated, and well ranked, it’s now the time to understand your organizational personality and ask the big question: who are you?

A progressive organization going strong? You aren’t afraid of new technologies? Or are you more conservative and stagnant? Have you had ten employees for ten years or are you more conquering the international market with more than 500 employees?

Since each ERP reseller will offer you benefits that will suit your culture, it’s always good to know yourself as an organization before choosing your ERP.

ERP systems should seamlessly integrate core business functions, connecting various departments and eliminating redundancies to improve overall organizational efficiency.

Your culture will also shed some light on your goals, your work method, your long-term vision, and will add up to your ERP software checklist to help you understand how to choose an ERP system that will fit you and will help you rise to the top.

Take for example, an ERP that can only be developed according to the accounting norms generally known, it will suit many enterprises, but maybe not you if you are looking to improve your customer service by relying on your system to manage contacts and relations to get the next order.

This is now the time to face the big questions and find your business personality in order understand how to choose an ERP.

Third criteria to choose the right ERP system: the cost

We couldn’t avoid this question for another minute because we have to ask it, despite the discomfort and palpitation it can cause: how much does it cost? It’s a true one-million-dollar question. Nonetheless, it remains essential.

If you hadn’t done so much math in your day, we can push the equation by asking the total cost of possession for the next decade, the implementation cost, the acquisition cost, the training, and we cannot forget the update cost.

Are you feeling dizzy? I know I am! But you will agree that the most uncomfortable questions are usually the most important. All those numbers will shed light on your decision, but will also give you everything you need to create a long-term picture of the situation to better understand how to choose an ERP.

What you need to analyze and evaluate is the return on investment that you hope for by counting the operational savings and the improvement of sales. An ERP system should be a stepping-stone for your company, not a weight to carry around. This is why you need to trust the numbers to give you the right facts. They will appear on your ERP system selection checklist.

The ERP selection process is crucial in evaluating costs, as it involves assessing potential software vendors, engaging stakeholders early, and forming a selection team to ensure the chosen ERP supports business operations and addresses the needs of various departments.

Fourth criteria to choose an ERP software: user adoption

Obviously, the ease or difficulty of adoption for your users should play a role on your ERP selection checklist because you will need to live with it for years.

Evaluate the degree of technological literacy of your company. Ask if your colleagues are ready to face this change.

Because you will first have to sell the idea of changing the ERP, you will have to convince them of the new tools’ benefits. After that they will have to adopt the systems, the screens, and the processes. And while your new ERP could make their life easier, the adoption of an ERP is usually a step that requires time and a lot of training. Be mindful of it while you are deciding how to choose an ERP.

Be prepared to that by choosing an ERP that can be adopted by your company, and that will be sold by an ERP partner able to support you throughout the implementation process.

Fifth criteria to choose an ERP software: scalability and flexibility is the key for business operations

When we talk about ERP solutions being scalable and flexible, it’s not because they are the world champions of gymnastics, but because they can be adapted to your development in the short and medium term.

A good ERP will be able to adapt to the unknown, to what you haven’t predicted, to what you don’t expect along the way. The loss of a big client? A new phase of development? A new product?

Ask yourself, “Will your ERP be able to follow you where you decide to go?” and you will know better how to choose an ERP.

Sixth criteria to choose an ERP software: the durability

As mentioned above, an ERP system is an investment, and who says investment means surviving over time.

ERP vendors play a crucial role in ensuring the durability of the system by providing robust support, detailing costs, and aligning the ERP system with the company's specific requirements.

This is why we have to ask ourselves about durability by determining if a single developer has created the solution. Is it implemented in many business entities?

Consult the opinions of others to know how to choose an ERP.

Seventh criteria to choose an ERP software: support and assistance

It’s an essential criterion on your ERP selection checklist, but also for a good ERP reseller, to think about the future. No matter what projects, goals, or unpredictable pitfalls you will have, you will need support services to brave those challenges with well-planned solutions and an expert by your side.

Make sure to have good support services available during your work hours and a good relationship with your ERP reseller because they will be present as long as your ERP is in your company.

Eight criteria to choose an ERP software: your network or a cloud?

Obviously, with the advent of cloud ERP, where your ERP is hosted on the cloud, it’s important to ask yourself about the needs of your enterprise in order to know how to choose an ERP.

The ability to send and receive business data is crucial for effective data integration and process management.

If you choose to host your ERP on your own network, you will have to make sure your infrastructure will allow it. To make your life easy, your ERP reseller should be able to provide the technical prerequisites, and after that, you might have to add some memory or change some obsolete computers.

You chose to host the ERP on the cloud?

Know that ordinarily your provider will assure the maintenance, updates, and backup of your data. Make sure that your ERP is hosted in a safe place with robust servers. Also find out if the chosen cloud will suit your needs and will perform as asked.

If you already use the cloud for other services like your CRM, it’s important to be able to export and import transactions, and that you will be able to manage all your data with tools and programs.

As for the cost, you should know that, with the cloud, you won’t have to invest in updating your actual system as you would if you chose to host your ERP on your own network. The entry cost is relatively low for the cloud, but it can grow if you add users, space, or services.

Finally, even though you can work from anywhere at anytime with an ERP cloud, it’s essential to make sure your data is encrypted and you stay the sole proprietor of your data in the event of a litigation in your ERP selection checklist.

Ninth criteria to choose an ERP software: your industry

Your industry might demand particular elements, or maybe it requires a specialized ERP. To make sure you are making the right choice of software, an important criterion on your ERP selection checklist is to be certain that your ERP can be adapted to your industry. Some are very specialized while others can suit a very large spectrum.

It is crucial to ensure that the ERP system includes specific modules related to supply chain management, especially if you are in the manufacturing sector.

To find the good one, ask your colleagues in the industry and similar companies to yours to find out what their ERP is. To find how to choose an ERP, think also to simulate a business cycle with your ERP reseller to see if the chosen ERP fits your needs perfectly.

You could be surprised by the results!

Tenth criteria to choose an ERP software: integration capabilities

Have you noticed how many tools you use daily? Are you under the impression that your day at work is a logical suite of software that alternates and complements other software? Well with an ERP, many systems can be integrated, and import or export data from each other.

Effective inventory management within an ERP framework helps organizations maintain efficiency and adapt to specific operational needs, underscoring its importance for both large and small businesses.

For an ERP solution that can really fit your daily life, you need to be able to communicate with some, if not the totality of your services like your CRM, payroll, etc. It’s an important criterion on your ERP selection checklist.

You will then avoid entering data twice, making mistakes while repeating some tasks or even delays for some important reports.

You will see, your life will be greatly improved and this factor will contribute to the adoption on the long-term of your ERP since it will be coherent with your work.