The first Challenge! Successfully
managing ERP Selection

Approximately three to eight Months

Due to the effort involved, the whole process is associated with high investment. As a rule, the entire selection process takes around three to eight months, depending on the size and complexity of the company and the industry.

It depends on Preparation

The large amount of ERP vendors on the market leads to complexity, which in turn can be overwhelming. This makes it a challenge to actually identify the right vendor from the hundreds on offer, and each software seems to have its own strengths and weaknesses. How to decide? In order to proceed in a structured manner, you need to prepare thoroughly. The choice of ERP system and vendor is not a gut decision, but is based on concrete selection criteria.

What are generally the most important ERP Selection Criteria?

• Functions: Do the functions of the system fully cover your needs?
• Price-performance: How much will the ERP system cost you? Future cost aspects are also relevant, e.g. costs for implementation, regular maintenance, licenses, etc.
• Sector suitability: Is it an ERP system that is specifically tailored to your industry, with specific functions already integrated and considering legal requirements and regulations?
• Investment security: What are the future prospects of the ERP system? What about updates? Will support be continued in the long term? And what about the global availability of the system? If your company is considering expanding abroad in the future, this is also an important aspect.

Find the right ERP System and Vendor - in just 5 Steps

1. The Start: Setting up the Project

First of all, a company must recognize that there is a need for a (new) ERP system and then set up the project and start planning the ERP implementation. At this point, it is essential to clarify all general conditions. In particular, you must determine the project team and define the specific responsibilities as well as the schedule and the budget.

Time for a (new) ERP system?

And how do you recognize that there is a need for a (new) ERP system? Basically, it can be said that your company should think about introducing a (new) ERP system at the latest when the internal effort slowly but surely starts to slow down your everyday business.

If you notice that the efficiency of your processes is decreasing, the coordination of processes is taking up more and more time and you are making more and more mistakes, it is time to act. After all, your core competencies should always be at the forefront!

2. Creating the Requirements Specification

*What is behind the term “requirements specification specification”?

A requirements specification is about the requirements that your company specifically places on the new ERP system. The requirements specification contains, among other things, a description of your company and your schedule for the upcoming ERP implementation. When creating the specification, the question “What do we need?” is always at the center of attention.

3. Pre-selection: Creating the Longlist

Now it’s time to make a pre-selection - with all vendors who are basically worth considering. This is your longlist. You should use your own critical factors as a guide. A knockout criterion can be, for example, compatibility with your operating system.

4. Fine Selection: Creating the Shortlist

Your list will probably still be quite complex. So the next step is to shorten the longlist. How can you do this? One option is to send your specifications to all the ERP vendors on your longlist. Ask the potential vendors to evaluate your initial situation and make an initial calculation.

You then evaluate the responses from the vendors and filter again based on the results. First and foremost, consider the pure facts about the ERP system on offer.

5. Choose the Vendor you trust

Shorten your shortlist

You should also define five selection criteria in advance that are particularly important for your company. Prioritize these criteria in order to filter out the best two to four vendors from your shortlist. Also take into account, for example, that although smaller vendors generally have fewer integrated functionalities to offer, they may be able to score points with better service.

The ERP vendor in the final round should really meet all your requirements - both technically, functionally and non-functionally as well as on a human level. These vendors then invite you to get to know the contact persons - before you (ideally) decide on one of the vendors in the end.

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The Human Factor

Keep in mind: as important as the technical and functional aspects are, it is also important that you harmonize with the vendor on a human level.

Your Checklist

• How much time passes before you receive a response from the vendor?
• Does the vendor communicate at eye level with you?
• Do you simply receive a predefined standard response from them or do they take the trouble to formulate an individualized assessment of your requirements?
• Does the answer have real added value for you or is it possibly just a sales pitch?

Caution: Don’t be fooled by false promises! ☝️

Of course, you cannot always immediately recognize when vendors are overselling (unlike with Pinocchio’s nose). The realization sometimes comes too late. However, you can take certain “precautions”, e.g. it is a good idea to request differentiated answers during the selection process, which also become part of the contract, or customer references.

It is also essential to prevent a discount-related amnesia during the negotiations! 😉