Guide
Choosing an ERP is one of the most expensive decisions a business makes, and most selections are shaped by the vendors rather than the buyer. Here is how to run a selection that gets you the right system on your terms.
By Christopher Fagan, Managing Partner
The most common mistake is to start by looking at systems. Begin instead with what is actually broken and what good would look like, in plain terms the business recognises. Write down the outcomes you need, the processes that matter, and the handful of things the new system absolutely has to do. That list, not a feature wishlist from a brochure, is what you judge every option against.
Vendor demos are staged to impress and references are hand picked. Take back control by scoring each option against your own criteria, running the demos on your scenarios rather than theirs, and speaking to reference clients you chose. A shortlist built this way is defensible to a board and far less likely to end in regret.
Most ERP pain is not the core product, it is the data, the integrations and the awkward edge cases. Before you commit, test the migration of your real data, the joins to your other systems, and the reports the business actually depends on. If a system struggles with these in selection, it will struggle far more in delivery.
The price on the slide is rarely the price you pay. The traps sit in support tiers, annual uplifts, user definitions and the cost of getting your own data back out. Negotiate these before you sign, while you still have options, not after, when you do not.
Most ERP selection criteria lists are long and weighted towards features, which is how vendors like them. The criteria that actually decide whether an implementation succeeds are fewer: fit with your operating model and the processes you will not change; the quality and cost of the implementation partner, who matters more than the software; the data migration effort from your current systems; total cost over seven years including licences, implementation, upgrades and internal time; the vendor’s roadmap and the risk of being on an edition that is quietly being retired; reporting and integration with the systems around it; and how much configuration the system needs before it does what you do. Weight those seven first and let the feature checklist settle the tie.
Be wary of advisers who resell the systems they recommend or take a commission on the deal. An independent view, with no stake in which vendor wins, is the difference between a selection that serves you and one that serves someone else.
At PEF we run vendor independent ERP selections and implementations, with no reseller deals and no commissions. See our software procurement and selection and ERP implementation services.
Related reading: best ERP software for UK businesses, ERP for small businesses.
A focused selection usually runs from a few weeks to a few months depending on the size of the business and the number of options, with the discipline mattering more than the duration.
It helps, provided the consultant is independent. The value is in a fair, evidenced process and a negotiated contract, not in being pointed at the adviser’s preferred product.
There is no single best system. The right one is the system that fits your processes, your data and your budget, which is why the selection should start with your needs rather than a product.
Negotiate exit and data portability up front, keep integrations clean, and avoid customising so heavily that you can never move. Lock in is a contract and design problem, not an accident.