How to Select ERP Technology

Selecting the right Enterprise Resource Planning (ERP) system is one of the most consequential technology decisions an organisation can make. An ERP sits at the operational heart of the business, integrating finance, supply chain, manufacturing, procurement, inventory, and often HR into a single platform. When done well, it drives efficiency, improves data accuracy, and enables better strategic decision-making. When done poorly, it can become a source of disruption, cost overruns, and operational risk.

The challenge is that the ERP market is vast and varied. From global platforms offering comprehensive functionality across every business process to industry-specific solutions tailored for manufacturing, distribution, or professional services, the number of options can feel overwhelming. Making the right choice requires clear understanding of your business requirements, realistic assessment of organisational readiness, and careful evaluation of which solution will deliver value not just at go-live, but for years to come.

This guide is designed to help business and IT leaders understand the key factors to consider when selecting a new ERP system. Viewpoint Analysis acts as a 'Technology Matchmaker' and we help IT and business leaders to find and select new software. You might want to check out our Finance and ERP Technology page for lots more information about the different vendor options and much more.

What is an ERP System?

An Enterprise Resource Planning (ERP) system is software designed to help organisations manage and integrate their core business processes. Instead of operating with disconnected systems for finance, inventory, purchasing, and production, an ERP provides a single, unified platform where data flows seamlessly across functions. This eliminates duplication, reduces errors, and gives leaders a real-time view of business performance.

At its core, an ERP acts as the system of record for transactional data - capturing orders, managing inventory, processing invoices, and recording financial transactions. At a more advanced level, modern ERP systems provide capabilities across:

• Finance and accounting – general ledger, accounts payable and receivable, financial reporting, budgeting, and compliance.

• Supply chain and procurement – purchasing, supplier management, demand planning, and logistics coordination.

• Manufacturing and production – shop floor control, bill of materials, production scheduling, and quality management.

• Inventory and warehouse management – stock control, order fulfilment, warehouse operations, and traceability.

• Project management – tracking time, costs, and resources for project-based organisations.

• Analytics and reporting – providing visibility into performance, costs, margins, and operational efficiency.

In short, an ERP helps organisations operate more efficiently, make better-informed decisions, and scale operations without the complexity and risk that come from managing multiple disconnected systems.

An ERP Selection Process

Different companies have different approaches to running technology selection - from the standard RFI and RFP process, to more sophisticated and modern processes that put more emphasis on solving a specific business need and inviting the vendor teams to showcase and sell their approach (our preferred approach).

At Viewpoint Analysis, we run Rapid RFIs, Rapid RFPs, and 30-Day Selection Processes - all with the aim of moving quickly and getting on with the real project - delivering an ERP solution. In all cases, we run the entire process - from requirements gathering, document write-up, vendor sales outreach, hosting calls, helping with scoring....to final decision.

Whichever approach is chosen, there is going to be an important decision to take - what are the key factors that will be the most crucial ones in determining which ERP solution to select? This document outlines the top 20 factors that we believe, from our experience of running ERP selection processes for companies of different sizes and industries, should be weighed up to make the final vendor decision.

20 Critical Factors in Selecting an ERP Vendor

Here are our top 20 critical factors to assess when selecting a new ERP solution and vendor (in no particular order):

1 - Size and Fit

One of the most common mistakes in ERP selection is choosing a platform that is misaligned with the organisation's size, complexity, or operational maturity. A highly sophisticated ERP packed with advanced functionality may look attractive, but if the business lacks the processes, resources, or capability to configure and use it effectively, the result is wasted spend, extended implementation timelines, and poor adoption.

Conversely, selecting a lightweight, entry-level ERP without considering future growth can lead to limitations that become apparent within a few years. As transaction volumes increase, processes become more complex, or the business expands into new markets, the system may struggle to keep pace - forcing costly upgrades or even replacement.

The key is to balance current requirements with realistic growth plans. Start by clearly defining your immediate priorities. Is the main driver getting accurate financial visibility, improving inventory control, or enabling better production planning? Then assess which capabilities will become essential as the organisation matures. By matching requirements to vendor offerings thoughtfully, leaders can avoid over-investing in unnecessary sophistication while ensuring the platform has room to scale as needs evolve.

2 - Industry Fit and Functionality

ERP systems are not one-size-fits-all. Different industries have distinct operational requirements, regulatory obligations, and business processes. A manufacturer needs production scheduling, bill of materials, and shop floor control. A distributor requires robust warehouse management, lot traceability, and multi-location inventory. A professional services firm needs project accounting, resource scheduling, and time tracking. Choosing an ERP that lacks essential industry functionality can lead to costly customisation, workarounds, or - in the worst case - operational limitations.

Some vendors offer industry-specific versions of their platform, pre-configured with templates, workflows, and reports tailored to sectors such as manufacturing, retail, construction, or healthcare. These can significantly accelerate implementation and reduce the need for extensive configuration. However, even within a single industry, every organisation has unique requirements. The best ERP systems strike a balance: they offer out-of-the-box functionality that reflects common industry practices while also allowing for customisation where needed.

When evaluating options, ask vendors to demonstrate how their system handles the specific processes that matter most to your business. Can it manage your production methods, handle your pricing structures, or comply with your industry's regulatory requirements? Do they have strong references from organisations in your sector? A platform that combines relevant industry capabilities with flexible configuration tools will deliver a faster return on investment and ensure the ERP remains a good fit over the long term.

3 - Flexibility and Scalability

An ERP system is not a short-term investment. For many organisations, it becomes the operational backbone of the business and remains in place for a decade or more. Over that time, strategies evolve, markets shift, and business models change. A system that feels like the right fit today may become restrictive tomorrow if it cannot adapt to changing priorities.

Flexibility means the ERP can be configured to reflect your unique processes without extensive custom development. Whether it is adjusting approval workflows, adding custom fields, or tailoring reports, the system should allow business users to adapt it as requirements change. Excessive reliance on hard-coded customisation not only increases cost but also makes future upgrades more complex.

Scalability ensures that as the business grows - whether in terms of transaction volumes, user count, geographic presence, or product complexity - the ERP can expand alongside it without degrading performance or requiring wholesale replacement. This includes handling increased data volumes, supporting multiple legal entities, and accommodating diverse business models such as make-to-order, configure-to-order, or direct-to-consumer operations.

When assessing vendors, ask not only "does this meet our needs today?" but also "will it support us in five or ten years' time?" A platform that can grow and evolve with your organisation protects your investment and ensures the ERP remains an enabler rather than a constraint.

4 - R&D Investment and Innovation

Linked to flexibility and scalability is the vendor's commitment to research and development. The ERP landscape is evolving, with new capabilities emerging around artificial intelligence, advanced analytics, IoT integration, and cloud-native architectures. Vendors that invest significantly in R&D are more likely to keep pace with these changes and deliver long-term value.

When evaluating options, ask vendors to disclose what percentage of their revenue is allocated to R&D and where that investment is focused. This matters particularly for vendors offering multiple products - it is important to understand how much of the investment specifically benefits the ERP platform you are considering, rather than being spread across unrelated product lines.

A strong R&D commitment signals that the vendor is building for the future, listening to customer feedback, and continuously improving the platform. It also reduces the risk of selecting a system that becomes outdated or unsupported as market priorities shift. By choosing a vendor with a clear and consistent R&D strategy, organisations can feel confident that their ERP will remain relevant, competitive, and capable of supporting emerging needs.

5 - Product Roadmap

While R&D investment provides reassurance about a vendor's commitment, the product roadmap shows where that investment is heading. A clear, customer-informed roadmap demonstrates that the vendor understands market trends, listens to its users, and is actively developing capabilities that will matter in the years ahead.

When reviewing vendors, ask to see their roadmap and understand the priorities driving it. Are they developing new functionality in areas such as supply chain resilience, sustainability reporting, or embedded analytics? Do they have a plan for improving mobile access, enhancing user experience, or expanding integration capabilities? Just as importantly, are they investing in core platform improvements such as performance, security, and scalability?

A vendor with a transparent and compelling roadmap provides confidence that the system will continue to grow in value long after implementation. By contrast, a provider with limited or vague plans may leave the organisation facing another costly replacement sooner than expected. Aligning your selection with a partner committed to continuous innovation ensures your ERP investment remains relevant and future-proof.

6 - Business Stability and Futures

A strong roadmap and significant R&D investment are only valuable if the vendor remains a going concern and continues to prioritise the ERP market. Not all technology companies are profitable, and market dynamics can shift quickly. It is important to assess the financial health and strategic focus of any vendor under consideration.

Start by reviewing the vendor's audited accounts for the past three years and conducting a credit check. While this cannot guarantee future viability, it provides a useful indicator of financial stability. Also consider the vendor's level of commitment to ERP. Is it their core business, or does ERP represent a small part of their overall revenue? Is there speculation about potential exits, acquisitions, or strategic shifts?

These questions matter because selecting an ERP is a long-term partnership. If the vendor exits the market, significantly reduces support, or pivots to other products, the organisation may be left managing an orphaned platform. By choosing a vendor with strong financial health and a clear commitment to the ERP market, you reduce the risk of disruption and protect the long-term value of your investment.

7 - Integrations and Ecosystem

An ERP system rarely operates in isolation, even though it acts as the central platform for core business processes. It typically needs to connect with specialist applications such as CRM, ecommerce platforms, warehouse management systems, business intelligence tools, or industry-specific software. The value of an ERP depends heavily on how well it integrates with these complementary systems. Poor integration leads to data silos, manual workarounds, and duplication - exactly the problems an ERP should solve.

Evaluate how easily the platform can connect to your existing applications and those you are likely to adopt in the future. Look for vendors offering open APIs, pre-built connectors, and active marketplaces of third-party add-ons. Strong integration capability not only reduces implementation costs but also enables the ERP to act as a true system of record across the organisation.

Closely linked to this is the strength of the vendor's ecosystem. The most successful ERP platforms are supported by a network of complementary technology providers covering areas such as advanced planning, manufacturing execution, quality management, and logistics. This ecosystem provides flexibility: if a new requirement emerges, you can leverage trusted integrations rather than building custom solutions from scratch.

A robust ecosystem also signals market confidence in the platform. Vendors that attract strong partner networks tend to be market leaders with proven technology and long-term viability. By choosing an ERP with rich integration capabilities and a thriving ecosystem, you ensure the system can adapt as business needs evolve.

8 - Implementation Partner Breadth and Depth

While ERP vendors develop and maintain the software, the actual deployment is typically handled by systems integrators, resellers, or specialist implementation partners. The strength and availability of this partner network directly impacts the success of your project. An impressive platform means little if there are no skilled partners available to configure it, migrate data, and align it with your processes.

When evaluating ERP solutions, assess the breadth and depth of the partner network. Are there multiple credible partners available, providing choice and reducing dependency? Or is the network limited to one or two firms, leaving you exposed if relationships break down or the partner exits the market? Breadth ensures you have options; depth ensures those options come with real expertise.

It is also worth considering the scope of what partners can deliver. Do they cover the full range of services you will need - from system integration and data migration to change management, training, and ongoing support? Or will they need to subcontract parts of the work, adding complexity and risk? A strong, diverse partner ecosystem increases confidence that the project can be implemented effectively and that ongoing support will be available for years to come.

9 - References and Proven Success

References are one of the most valuable sources of insight when selecting an ERP. Speaking with organisations that have already implemented the system provides practical perspectives on performance, implementation experience, vendor support, and the realities of day-to-day use. The more references a vendor can provide - particularly those who have been live for several years - the stronger the signal that the platform is proven, stable, and capable of delivering long-term value.

Industry alignment is helpful, particularly when considering sector-specific requirements such as regulated manufacturing processes, complex supply chains, or project-based operations. That said, organisations often place too much weight on finding a near-identical reference. In reality, a strong reference from a company of similar size, complexity, or operational model is often just as valuable. The goal should be to learn from real-world experience - understanding what worked well, what challenges arose, and how they were resolved.

Well-chosen references provide confidence not only in the technology but also in the vendor's ability to support customers over time. They turn marketing claims into tangible proof points, making them a critical part of any ERP selection process. Importantly, seek references for both the vendor and the implementation partner to gain a complete picture of what the project experience will be like.

10 - Cloud vs On-Premise Deployment

One of the most strategic decisions in ERP selection is whether to deploy the system in the cloud or on-premise. Each approach has distinct advantages, and the right choice depends on your organisation's priorities, IT capabilities, and risk appetite.

Cloud ERP offers lower upfront costs, faster implementation, automatic updates, and reduced dependency on internal IT resources. It provides flexibility to scale up or down as needed and ensures access to the latest features without managing upgrades. For organisations with limited IT infrastructure or those seeking agility and cost predictability, cloud deployment can be highly attractive.

On-premise ERP provides greater control over data, customisation, and system behaviour. It may be preferred by organisations in highly regulated industries, those with specific security or compliance requirements, or businesses with substantial existing IT infrastructure. However, it typically involves higher upfront capital expenditure, longer implementation timelines, and ongoing responsibility for maintenance, upgrades, and security.

Some vendors offer hybrid models that combine elements of both approaches, allowing certain functions to run in the cloud while keeping others on-premise. When evaluating options, consider factors such as total cost of ownership, data residency requirements, integration needs, and your organisation's long-term IT strategy. The deployment model should align with business priorities, not just technical preferences.

11 - User Interface and Usability

An ERP system must be used by people across the organisation - from warehouse operators and production staff to finance teams and senior executives. If the interface is clunky, requires extensive training, or adds unnecessary steps to routine tasks, adoption will suffer and the system risks becoming a source of frustration rather than efficiency.

Usability in ERP goes beyond aesthetics. It is about how intuitively users can complete everyday activities: entering orders, checking inventory, processing invoices, or generating reports. The best ERP platforms are designed with the end user in mind, providing clear navigation, logical workflows, and minimal clicks to complete common tasks.

When evaluating vendors, involve real users from across the business in hands-on demonstrations. Can a warehouse operative process a goods receipt without training? Can a finance clerk reconcile accounts quickly? Can a manager access performance dashboards without IT support? Their feedback can highlight potential adoption challenges early and ensure the chosen system is one that employees are confident to use.

Modern ERP systems should also provide role-based interfaces that show users only the information and functions relevant to their job. This reduces complexity and improves productivity. Making usability a priority turns the ERP from a necessary system into a tool that genuinely supports how people work.

12 - Mobile and Remote Access

ERP functionality is no longer confined to office desktops. Employees increasingly need to access information and complete tasks from mobile devices - whether checking inventory levels from the warehouse floor, approving purchase orders while travelling, or viewing dashboards remotely. For organisations with distributed operations or field-based staff, mobile access is not just convenient; it is essential.

A strong mobile experience ensures users can interact with the ERP as easily on their phone or tablet as they can on a laptop. This means more than simply shrinking the desktop interface to fit a smaller screen. The mobile app should be purpose-built, responsive, and optimised for the tasks people perform most frequently while on the move.

When evaluating vendors, test the mobile application in realistic scenarios. Can users quickly find the information they need? Is the interface intuitive without training? Does it support offline access for areas with limited connectivity? Can approvals be completed in seconds rather than minutes?

Ensuring the ERP is genuinely mobile-friendly increases adoption, empowers employees, and makes the system a natural part of daily work rather than a barrier to productivity. In an era where flexibility and real-time access to information matter more than ever, mobile capability is foundational.

13 - Data Security and Compliance

ERP systems hold some of the most sensitive and valuable data an organisation manages - from financial records and supplier contracts to customer information and proprietary production processes. Protecting this data is not only a legal obligation but also critical to maintaining competitive advantage and stakeholder trust. A vendor must therefore demonstrate the highest standards of data security and regulatory compliance.

At a minimum, expect strong encryption (both in transit and at rest), robust access controls, secure authentication methods, and regular independent security audits. These safeguards protect against breaches that could damage reputation, expose the organisation to legal risk, and disrupt operations.

Equally important is compliance with relevant regulations. Depending on your industry and geography, this may include GDPR, data localisation requirements, ISO 27001, SOC 2, or sector-specific frameworks such as FDA regulations for pharmaceuticals or Sarbanes-Oxley for publicly traded companies. Ensuring the vendor has the right certifications and can evidence their compliance processes provides reassurance that data will be handled responsibly.

During evaluation, ask vendors to detail their security architecture, compliance credentials, incident response processes, and data residency options. A credible provider will be transparent about their approach and willing to share independent verification. By making security and compliance central to your selection, you protect both the organisation and its stakeholders.

14 - Reporting and Analytics

One of the primary reasons organisations invest in ERP is to gain better visibility into business performance. The right platform should provide access to accurate, timely data that informs strategic decisions - whether that is understanding profitability by product line, analysing supply chain efficiency, forecasting cash flow, or tracking operational KPIs.

However, not all ERP systems offer the same level of reporting capability. Some provide only basic, pre-built reports that limit flexibility. Others offer advanced analytics, customisable dashboards, and the ability to drill down into transactional detail. The level of sophistication you need will depend on the maturity of your finance and operations functions and the complexity of your business.

When evaluating vendors, assess the reporting tools carefully. Can business users create their own reports without relying on IT? Are visualisations clear and easy to interpret? Can data be segmented by department, location, product, or customer? Does the system support ad-hoc queries as well as scheduled reporting? Can reports be shared easily with stakeholders?

Also consider whether the platform supports predictive analytics - for example, forecasting demand, identifying supply chain risks, or modelling the financial impact of business decisions. While not essential for every organisation, these capabilities can provide significant value for businesses looking to take a more strategic, data-driven approach to operations.

Strong reporting and analytics turn the ERP from an operational tool into a source of competitive advantage, enabling better decisions and more proactive management.

15 - Data Migration Strategy and Support

One of the most challenging aspects of any ERP implementation is migrating data from legacy systems. Historical financial records, customer and supplier information, inventory balances, open orders, and product data all need to be transferred accurately into the new platform. Poor data migration can lead to operational disruption, reporting inaccuracies, and loss of critical business information.

When evaluating vendors and implementation partners, assess their approach to data migration. Do they have proven methodologies, tools, and templates? Can they provide examples of successful data migrations from systems similar to yours? What support will they provide for data cleansing, validation, and testing?

It is also important to understand what data will be migrated and what will be archived or left behind. Not all historical data needs to move into the new ERP - migrating decades of transactional detail can add complexity and cost without delivering value. A thoughtful migration strategy focuses on the data that is genuinely needed for ongoing operations and compliance.

During vendor demonstrations, ask to see how data migration is managed and what tools are available to simplify the process. A vendor with strong migration capabilities and experienced partners significantly reduces project risk and accelerates time to value.

16 - Change Management and Training

Even the best ERP system will fail to deliver value if users do not adopt it effectively. Change management and training are therefore critical success factors in any ERP project. Employees need to understand not just how to use the system, but why the organisation is implementing it and how it will make their work easier or more effective.

When evaluating vendors and implementation partners, ask about their approach to change management. Do they provide frameworks, best practices, and support for managing organisational change? What training options are available - online courses, classroom sessions, hands-on workshops, or train-the-trainer programmes? Can training be tailored to different user roles and skill levels?

Also consider whether the vendor provides ongoing training resources such as knowledge bases, video tutorials, and user communities. These are invaluable for onboarding new employees, refreshing skills, and supporting continuous improvement after go-live.

Strong change management and training turn ERP implementation from a technical project into a business transformation. By investing in these areas during vendor selection, you increase the likelihood of successful adoption and long-term value.

17 - Implementation Methodology and Timeline

ERP projects are complex, involving multiple workstreams, stakeholder groups, and dependencies. The vendor's implementation methodology - and the realism of their proposed timeline - can be as important as the software itself. A well-structured, proven methodology increases the likelihood of on-time, on-budget delivery and reduces project risk.

When evaluating vendors, ask them to outline their implementation approach. Do they follow a recognised methodology such as Agile, Waterfall, or a hybrid approach? What phases does the project include - discovery, design, configuration, testing, training, go-live, and post-implementation support? How do they manage scope, risks, and change requests?

Also assess the proposed timeline critically. Be wary of vendors offering unrealistically short implementation periods - ERP projects take time to do well, and rushing can lead to poor configuration, inadequate testing, or insufficient training. Equally, be cautious of timelines that seem excessively long without clear justification.

A credible vendor will be transparent about what is achievable within a given timeframe and willing to discuss the trade-offs between speed, cost, and scope. By evaluating implementation methodology and timeline carefully, you set realistic expectations and increase the chances of project success.

18 - Commercial Model and Licensing

ERP systems typically involve significant financial investment, and understanding the commercial model is essential to making an informed decision. Costs usually include both one-off expenses (such as licences, implementation, data migration, and training) and recurring costs (such as maintenance, support, hosting, and future development). Understanding the balance between these is critical.

Some vendors charge per user, while others charge based on modules, transaction volumes, or company size. Some offer unlimited user licences within a fixed price model. Each approach has implications for total cost of ownership, particularly as the organisation grows. When evaluating options, model the likely costs over a five-year period to understand the true financial commitment.

Also recognise that in every procurement process, pricing will vary significantly. Some vendors will be far more expensive, while others may seem suspiciously cheap. Most buyers ultimately choose an option that delivers the critical capabilities at a sensible, justifiable price point - even if it is not the lowest quote. In many cases, paying slightly more for a system that is proven, well-supported, and scalable delivers far better value over the long term.

19 - Total Cost of Ownership and Return on Investment

When evaluating ERP options, it is important to look beyond headline licence fees. The Total Cost of Ownership (TCO) includes implementation services, hardware (for on-premise deployments), data migration, integration work, user training, ongoing support, and any future customisation or upgrades. These elements can add significantly to the overall cost and should be factored into decision-making from the outset.

Equally, cost alone should not be the deciding factor. An ERP is an enabler of operational efficiency, better decision-making, and business growth. That is why it is essential to assess Return on Investment (ROI) alongside TCO. The right system can reduce inventory carrying costs, shorten order-to-cash cycles, improve procurement efficiency, enhance financial visibility, and enable faster, more accurate reporting - benefits that often far outweigh the financial outlay.

In practice, this means asking not only "what will it cost us?" but also "what will it deliver back to the business?" An ERP that aligns closely with your strategy, drives adoption, and creates measurable business outcomes will often justify a higher investment than one that is cheaper but less effective. Taking a balanced view of both TCO and ROI ensures the final decision is grounded in long-term value, not just short-term cost.

20 - Trust and Partnership

After weighing up functionality, cost, scalability, implementation, and every other consideration, the final question is simple: which vendor do you trust?

Trust is not about a feature checklist or a contract clause - it is about confidence. Confidence that the vendor will deliver on their promises, that they will support you when challenges arise, and that they are genuinely invested in your success over the long term. It is also about instinct: which vendor feels like the right partner for your organisation?

Cultural fit shows up in subtle but important ways. Does the vendor listen carefully and adapt to your way of working, or do they push a one-size-fits-all approach? Do they demonstrate transparency and openness in discussions, or do you feel you need to work hard to extract information? Are their teams responsive and collaborative, or more transactional in nature?

In most ERP selections, the gut choice is rarely wrong. If all the critical boxes are ticked, and your instinct tells you that one vendor genuinely understands your needs, listens to your concerns, and demonstrates a commitment to partnership, then that is almost certainly the vendor you should select.

Every successful ERP project is built on trust - trust in the technology, and trust in the people behind it. Making your final decision with this principle in mind gives you the best chance of choosing not just a system, but a partner for the next decade or more.

Conclusion

Selecting an ERP system is one of the most significant decisions an organisation will make - one that will shape operational efficiency, financial visibility, and business growth for many years to come. This guide has outlined the key factors to consider, from industry fit and scalability through to implementation methodology, cost, and ultimately, trust. Each plays an important role in ensuring the ERP you choose is not only the right fit today but continues to deliver value as your business evolves.

The ERP market is complex and often overwhelming, but a structured approach to selection makes the path clearer. By focusing on what matters most to your organisation, testing vendors against real-world requirements, and balancing cost with long-term return on investment, you can move forward with confidence.

The most successful ERP projects do not just deliver technology - they deliver a partnership that helps your business succeed. With the right choice, your ERP will become more than a system of record; it will be a foundation for operational excellence, smarter decision-making, and sustained competitive advantage.

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If you are soon to start looking at the ERP market, why not let Viewpoint Analysis help with your process? We have a range of services for every step of your journey:

• Not sure whether to move away from your current ERP platform? Our 'Stick or Switch' review will help your team to decide whether you can improve what you have, or if the grass is really greener on the other side of the fence.

• Is your current provider ok, but you know they can improve and you'd at least like to try to see if that's possible? Our IT Service Improvement approach could be perfect and sort the situation out.

• If you are set on changing your ERP software, and want to look at the market options to get ideas, take a look at our Innovation Series and Matchmaker Services.

• And finally - our Rapid Selection Services help you run the full (and quick) technology selection process.