Companies use enterprise resource planning (ERP) systems to track and streamline operations across business functions such as accounting, finance, and inventory management.

Selecting the right ERP solution involves a deep understanding of the growth strategy and future goals of the company while determining how technology can enable further strategic alignment.

The key considerations below highlight the approach and timeline one can expect during ERP vendor selection, and they define crucial decision-making points for your management team driving the selection process that holds all parties accountable for a successful implementation.

Evaluate Current System Stack

To assess potential ERP vendors, first complete a deep dive into the current system stack of your business. Understanding how different systems across your organization integrate and interact with one another will inform where key integration opportunities exist.

To remove the need for manual intervention and the potential for human error, consider how compatible your current stack is with potential ERP vendors. Ensuring compatibility between current applications and data structures with a new ERP will set your organization up for a successful integration and smooth data migration.

Assessing the current states requires understanding the technical capabilities and structures of current systems to determine the requirements that a new system would potentially need. These questions include:

• Where are our systems failing?
• Where are our systems doing well?
• What processes could be automated?
• What other in-house and partner systems should be integrated into a new ERP?
• What kind of capabilities does our system currently have, and what kind of system would integrate well with ours?
• Which key processes require further efficiency post-implementation of a new ERP system?

Establish Goals

Once the initial assessment of the current state is complete, your organization should firmly establish goals on how the new ERP system will assist functions across your business in the short and long term. Establish a cross-functional team to include stakeholders from all business units that will be impacted by a new ERP system.

During goal alignment, you should consider which business processes will likely be completely taken over by the new ERP, which will remain independent, and those that will change only slightly with the automation. This is also the time to brainstorm new processes that may arise in the future as the organization scales and acquires.

To ensure alignment between business goals and vendor solutions, establish a vendor scorecard that includes the following: important metrics established during goal setting, such as total cost of ownership, technical accounting and finance functionality, user experience, compliance and security considerations, and the implementation timeline.

When establishing a timeline goal, the business should include time to deliberate, research, and implement.

Example success metrics that will help determine if an ERP is a value-added resource are:

• Return on investment: Increased revenue and cost savings
• Operational efficiency: Reduced cycle times and reduction in manual tasks
• Data accuracy: Eliminate duplication and provide reliable reporting
• User adoption: Positive user feedback and high adoption rates
• Compliance and risk management: Adherence to regulatory requirements

During this time, the business should begin to establish budget expectations with the help of consultants and value-added resellers (VARs). Budgets should include the costs associated with licensing, maintenance, training, testing, and other ongoing costs like support.

Research

Conducting research of an ERP system that is tailored to your organization is essential when evaluating current and future goals. When evaluating different ERP systems and vendors, the following should be considered:

• Capabilities: Software functionality and feature buildouts, and capabilities around reporting and data security
• Current and future state technical landscape: Cloud-based versus on-premises system, system integration with outside software, and transaction volume and amount of licenses
• Standard (“out-of-the-box”) functionality versus system customizations: Unique business processes and ease of use
• Segregation of duty and internal controls: Approval matrices and locking accounting periods
• Total cost: The cost per license, implementation costs, and support and maintenance costs

Based on the evaluation, create formal documents such as a Request for Proposal (RFP) to think through what you’re looking for in an ERP system. RFPs help vendors understand the scope of the project and create a level playing field for vendor responses. Once this is complete, request vendor demonstrations to help you understand the interface and capabilities of different systems.

Choose an Implementation Partner

While the software implementation providers will deploy an implementation plan with their own methodology, a project manager at your company should internally manage each phase of the software implementation.

The project manager will be responsible for the following key items within the implementation:

• Managing overall project timeline with the implementation team
• Coordinating meetings between the implementation and executive steering committee
• Ensuring all users of the new ERP software are attending software demos session, testing the system, and giving feedback on new functionalities
• Coordinating go-live dates for the team

Post-Implementation Considerations

Reach out to maintain ongoing support. This ensures that users can get the most out of the system and address any challenges that emerge.

The executive steering committee and project manager should maintain the relationship with the implementation provider for post go-live support. Items to consider when working with implementers post go-live include the following:

• General trouble shooting of customizations built within the ERP software during implementation
• Assistance when performing the first accounting close
• Ongoing system maintenance and updates

The Right ERP Vendor

Research and planning for an ERP vendor selection and implementation will require cross-functional goal and strategy alignment. When done right, this process will result in choosing a vendor that meets the current needs of the organization and supports its growth.