Searching for a new ERP Solution: Why and how you
should shorten
your Shortlist

1) Create the Longlist: Pre-selection based on Knock-out Criteria

Some companies make the decision for (or against) an ERP vendor largely intuitively after much deliberation, but this can be done much better and more efficiently! As a first step, you should draw up a so-called longlist with all ERP vendors that in principle are considered for cooperation.

These aspects form your knock-out criteria:

• Does the ERP system fulfill the necessary technical requirements (e.g. connection to the database, compatibility with the operating system, integration with existing applications, interfaces, languages and currencies)?

• Does it meet all your functional requirements (e.g. in terms of capacity and resource planning, order picking, warehousing, invoicing)?

• And does it also meet your non-functional requirements (e.g. performance, compliance, support)?

• Does it cover the central industry-specific requirements or is it a system specially tailored to your industry?

• Can the system be flexibly adapted to future requirements (e.g. internationalization of your company)?

• Is there a good price-performance ratio?

From Longlist to Shortlist - Mistakes you should avoid

The longlist is then worked towards a significantly reduced shortlist. Questionnaires and requests for information (RFI) are helpful here to get an even more precise impression of the potential ERP vendors and to compare their price and performance information. However, it is far too time-consuming to confront all longlisted vendors with more than a thousand questions and then evaluate the answers. This is especially true if you realize afterwards that you can cross some of them off the list completely. For example, because they have no references in your industry. Or because they just wanted to lure you in with discounts, but in reality can’t support you competently at all. You’d better find that out early, wouldn’t you?

It also makes little sense to invite a large number of vendors for a full-day workshop. Especially if you involve your entire project group in this meeting. Only to cross potential vendors off the list again later because their user interface looks “a bit chaotic” in your opinion. Or you also let your current vendor participate “out of courtesy”, even though it’s clear from the start that they don’t stand a chance.

2) Create the Shortlist: Fine Selection

1. Assess the facts

   How can you proceed more efficiently when selecting your ERP system? First of all, you can send your requirements specification to all ERP vendors on your longlist. This contains, among other things, a description of your company, all your requirements for the new ERP system and your time schedule for the ERP project. Ask the potential vendors to evaluate your initial situation and make a first calculation.

   Based on the collected response from the longlist vendors, you re-filter. In doing so, you are primarily guided by the pure facts about the ERP system on offer. This approach is much more efficient and gives you a much better impression of the strengths and weaknesses of the different ERP solutions than if you were to research all the information yourself in days or weeks of painstaking work.

2. Reading between the Lines

   However, the feedback from the longlist vendors does not only provide information on software-related features. You can use the following criteria to recognize whether a potential ERP vendor is really suitable for collaboration:

   • How much time elapses from your request until you receive a response from the respective vendor?

   • Does the vendor communicate at eye level with you?

   • Do they simply send you a predefined standard answer 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?

   If you analyze the response of the vendors to your request based on these criteria, you can filter your shortlist even further. In the next step, it is then advisable to arrange a personal meeting with the vendors who are still on your list. You should always keep the interpersonal factor in mind. Because if you don’t get along with the vendor and their team on a personal level, this will quickly lead to conflicts and that is absolutely not helpful.

3) The Final Selection: Create a Condensed shortlist

We recommend that you also define five selection criteria at management level that are most important for your company. Prioritize these criteria to filter out two to four vendors from your shortlist. These ERP vendors should also really meet all your requirements - both technically and functionally and non-functionally. In addition, the vendors should also have convinced you from a human perspective. This approach will save you and your team a lot of time and nerves. Because with every unsuitable ERP solution that you can exclude at an early stage in the process, you shorten the further decision-making process and thus achieve a faster return on investment.