ERP Evaluation Checklist: Streamline Your Selection Process for Maximum Impact

Choosing an ERP system isn’t just about picking software; it’s like selecting the nerve center of your entire business. 

Did you know that nearly 60% of ERP implementations exceed budget expectations? And even more bizarre, businesses spend months evaluating systems only to later regret their choice because they overlooked essential features or hidden costs! 

That’s where the ERP evaluation checklist comes in—it’s your roadmap to avoid the pitfalls and make an informed decision.

Master Your ERP Evaluation: The Ultimate 13-Step Checklist for Transformative Success

Before you dive into the specifics, make sure to check our free ERP evaluation template to streamline the process and ensure you’re covering all the crucial bases.

FREE ERP EVALUATION TEMPLATE

The right Enterprise Resource Planning (ERP) system can be the difference between thriving and merely surviving. 

It’s not just software; it’s the backbone of your entire operation, touching every aspect of your business from finance to customer relations, from supply chain to human resources.

This comprehensive ERP evaluation checklist is your secret weapon. It distills decades of industry expertise into actionable steps, guiding you through the labyrinth of options to find the perfect fit for your organization. 

1. Understanding Your Business Needs
2. Evaluating ERP Functionality
3. Technical Considerations
4. User Experience and Interface
5. Vendor Evaluation
6. Cost Analysis
7. Implementation and Support
8. Future-Proofing Your ERP Choice
9. Stakeholder Involvement
10. Pilot Testing and Evaluation
11. Risk Assessment
12. Final Decision-Making Process
13. Post-Selection Planning

So, let’s dive in and analyze each of these phases. 

1. Understanding Your Business Needs

Before you even look at a single ERP solution, you need to have a crystal-clear understanding of your organization’s needs and goals. 

This foundational step will guide your entire evaluation process and ensure you don’t get sidetracked by flashy features you don’t actually need.

Assess your current business landscape

1. Document existing pain points in your processes
2. Identify inefficiencies and bottlenecks across departments
3. Analyze your current technology stack and its limitations
4. Gather input from employees at all levels about daily operational challenges

Define clear objectives

1. Set specific, measurable goals for ERP implementation (e.g., “Reduce order processing time by 50% within 6 months”)
2. Align ERP objectives with your overall business strategy
3. Prioritize objectives based on potential business impact
4. Establish KPIs to measure the success of your ERP implementation

Build your evaluation team

1. Identify key stakeholders from each department
2. Assign roles and responsibilities for the evaluation process
3. Include a mix of technical and business-focused team members
4. Designate a project leader to drive the evaluation forward

Choose your evaluation approach

1. Decide between a phased or all-at-once implementation strategy
2. Determine if you need industry-specific or general ERP solutions
3. Consider cloud-based vs. on-premise deployment options
4. Evaluate the need for customization vs. out-of-the-box functionality

2. Evaluating ERP Functionality

Now that you know what you need, it’s time to dive into the nitty-gritty of ERP features. This phase is all about matching your requirements with the capabilities of potential ERP systems.

Assess core modules

1. Finance and Accounting: GL, AR, AP, financial reporting
2. Human Resources: Payroll, time tracking, benefits management
3. Supply Chain Management: Inventory, procurement, logistics
4. Customer Relationship Management (CRM): Sales, marketing, service
5. Manufacturing (if applicable): Production planning, quality control
6. Project Management: Resource allocation, time tracking, billing

Evaluate additional features

1. Business intelligence and analytics
2. Mobile accessibility
3. E-commerce integration capabilities
4. Multi-currency and multi-language support
5. Workflow automation tools
6. Document management systems

Consider industry-specific functionality

1. Identify features crucial for your industry vertical
2. Evaluate compliance with industry regulations
3. Assess the system’s ability to handle industry-specific processes
4. Check for pre-built industry templates or configurations

Assess customization capabilities

1. Evaluate the ease of adding custom fields or modules
2. Check for a robust API for integrations
3. Assess the availability of a development platform for custom apps
4. Determine the impact of customizations on future upgrades

3. Technical Considerations

The technical aspects of an ERP system are just as crucial as its features. This step ensures that the ERP you choose will play nicely with your existing tech stack and scale with your business.

Evaluate deployment options

1. Cloud-based: Assess security, uptime guarantees, and data ownership
2. On-premises: Evaluate hardware requirements and maintenance needs
3. Hybrid: Determine which modules work best on-premises vs. cloud

Assess integration capabilities

1. Check compatibility with your existing systems
2. Evaluate pre-built connectors for common third-party applications
3. Assess the robustness of the API for custom integrations
4. Determine the ease of data import/export

Evaluate mobile accessibility

1. Check for native mobile apps for iOS and Android
2. Assess the range of functions available on mobile devices
3. Evaluate offline capabilities for field workers
4. Check for responsive design for browser-based access

Assess security features

1. Evaluate data encryption methods (in transit and at rest)
2. Check for role-based access control capabilities
3. Assess compliance with relevant regulations (GDPR, HIPAA, etc.)
4. Evaluate authentication methods (2FA, SSO, etc.)

4. User Experience and Interface

An ERP system is only as good as its adoption rate. A user-friendly interface can make the difference between an ERP that transforms your business and one that collects digital dust.

Evaluate the user interface

1. Assess the overall look and feel of the system
2. Check for intuitive navigation and logical workflow
3. Evaluate the customization options for dashboards and reports
4. Assess the consistency of UI across different modules

Consider user adoption factors

1. Evaluate the learning curve for different user roles
2. Check for built-in user guides and contextual help
3. Assess the availability of training resources
4. Evaluate the system’s similarity to familiar tools (e.g., Microsoft Office)

Assess accessibility features

1. Check for compliance with accessibility standards (WCAG)
2. Evaluate screen reader compatibility
3. Assess color contrast and text sizing options
4. Check for keyboard navigation support

Evaluate reporting and analytics tools

1. Assess the ease of creating custom reports
2. Check for drag-and-drop report builders
3. Evaluate the range of pre-built reports and dashboards
4. Assess real-time reporting capabilities

5. Vendor Evaluation

Choosing an ERP is also about choosing a long-term partner. This step helps you evaluate not just the product, but the company behind it.

Assess vendor reputation and stability

1. Research the vendor’s financial health and market position
2. Check for recent mergers, acquisitions, or major leadership changes
3. Evaluate the vendor’s track record in your industry
4. Assess the vendor’s vision and product roadmap

Evaluate customer support and service

1. Check support availability (24/7, business hours, etc.)
2. Assess support channels (phone, email, chat, knowledge base)
3. Evaluate response time guarantees and escalation procedures
4. Check for dedicated account management

Assess implementation methodology

1. Evaluate the vendor’s implementation approach
2. Check for industry-specific implementation experience
3. Assess the availability of local implementation partners
4. Evaluate post-implementation support options

Review references and case studies

1. Request references from companies similar to yours
2. Conduct reference calls to discuss implementation experiences
3. Review case studies relevant to your industry
4. Check online reviews and community forums for user feedback

6. Cost Analysis

Understanding the true cost of an ERP system goes far beyond the sticker price. This step helps you uncover hidden costs and evaluate the long-term financial impact.

Calculate total cost of ownership (TCO)

1. Evaluate licensing models (perpetual vs. subscription)
2. Calculate implementation costs (consultancy, customization, data migration)
3. Assess hardware and infrastructure costs
4. Estimate ongoing maintenance and support fees

Consider hidden costs

1. Evaluate potential productivity loss during implementation
2. Assess the cost of internal resources dedicated to the project
3. Calculate training costs for employees
4. Estimate costs for future upgrades or additional modules

Perform ROI analysis

1. Identify areas of potential cost savings
2. Estimate productivity gains and their financial impact
3. Calculate potential revenue increases from improved operations
4. Determine the expected payback period

Evaluate pricing flexibility

1. Check for volume discounts or tiered pricing
2. Assess the cost of adding users or modules in the future
3. Evaluate the vendor’s willingness to offer price protection
4. Check for any penalties or fees for reducing usage

7. Implementation and Support

A smooth implementation can make or break your ERP project. This step helps you evaluate the vendor’s ability to get you up and running successfully.

Assess implementation timeline

1. Evaluate the vendor’s proposed implementation schedule
2. Check for phased implementation options
3. Assess the impact on your business operations during implementation
4. Evaluate the vendor’s track record of on-time implementations

Evaluate training programs

1. Assess the range of training options (in-person, online, self-paced)
2. Check for role-based training programs
3. Evaluate the quality of training materials
4. Assess options for ongoing training and education

Review post-implementation support

1. Evaluate different support tiers and their costs
2. Check for dedicated support personnel options
3. Assess the process for handling customization support
4. Evaluate the vendor’s bug fixing and patch release process

Assess upgrade policies

1. Understand the frequency of major and minor updates
2. Evaluate the impact of upgrades on customizations
3. Assess the level of support provided during upgrades
4. Check for options to defer or skip certain upgrades

8. Future-Proofing Your ERP Choice

Your business is dynamic, and your ERP should be too. This step helps you evaluate how well an ERP system can adapt to your future needs.

Assess scalability

1. Evaluate the system’s ability to handle increased transaction volumes
2. Check for limitations on number of users or locations
3. Assess the ease of adding new modules or functionalities
4. Evaluate performance at scale (request benchmark data)

Evaluate the product roadmap

1. Review the vendor’s product development plans
2. Assess the frequency of new feature releases
3. Evaluate the vendor’s track record of innovation
4. Check for plans to incorporate emerging technologies (AI, IoT, etc.)

Consider market trends

1. Assess the ERP’s readiness for digital transformation initiatives
2. Evaluate support for emerging business models in your industry
3. Check for features supporting sustainability and ESG reporting
4. Assess the system’s ability to handle global expansion

Evaluate flexibility and adaptability

1. Assess the ease of modifying workflows and processes
2. Evaluate options for extending the system’s functionality
3. Check for a robust ecosystem of third-party add-ons
4. Assess the system’s ability to adapt to regulatory changes

9. Stakeholder Involvement

An ERP affects everyone in your organization. This step ensures that all voices are heard and all needs are considered.

Identify key stakeholders

1. Map out all departments and roles affected by the ERP
2. Include representatives from C-suite to end-users
3. Consider external stakeholders (customers, suppliers, partners)
4. Identify potential project champions in each department

Gather stakeholder input

1. Conduct surveys or interviews to understand user needs
2. Hold workshops to discuss pain points and desired improvements
3. Create use cases and scenarios for different user roles
4. Prioritize requirements based on stakeholder feedback

Ensure buy-in from leadership

1. Present the business case for ERP implementation to executives
2. Align ERP goals with overall business strategy
3. Secure commitment for necessary resources and budget
4. Establish executive sponsors for the project

Plan for ongoing communication

1. Develop a communication strategy for the evaluation process
2. Plan regular updates to keep stakeholders informed
3. Create channels for continuous feedback throughout the process
4. Prepare for change management communication

10. Pilot Testing and Evaluation

Never buy a car without a test drive. The same goes for ERP systems. This step helps you experience the ERP in action before making a final decision.

Set up a pilot project

1. Define the scope and objectives of the pilot
2. Select a representative group of users for the pilot
3. Choose key processes to test during the pilot
4. Set a realistic timeline for the pilot phase

Define success criteria

1. Establish clear, measurable goals for the pilot
2. Define KPIs to evaluate system performance
3. Set benchmarks for user adoption and satisfaction
4. Determine acceptable levels of issues or bugs

Conduct the pilot

1. Provide thorough training to pilot users
2. Monitor system performance and user interactions
3. Encourage detailed feedback from participants
4. Document all issues, workarounds, and successes

Evaluate pilot results

1. Analyze performance against predefined success criteria
2. Gather and synthesize user feedback
3. Assess the impact on business processes
4. Identify any deal-breakers or must-have changes

11. Risk Assessment

Every major project comes with risks. This step helps you identify and plan for potential pitfalls in your ERP implementation.

Identify potential risks

1. Assess data migration risks (data loss, corruption)
2. Evaluate integration risks with existing systems
3. Consider user adoption and resistance risks
4. Assess vendor-related risks (financial stability, support quality)

Evaluate impact and likelihood

1. Rate each identified risk on potential impact
2. Assess the likelihood of each risk occurring
3. Prioritize risks based on impact and likelihood
4. Identify critical risks that could derail the project

Develop mitigation strategies

1. Create contingency plans for high-priority risks
2. Assign responsibility for each risk mitigation action
3. Establish triggers for implementing mitigation strategies
4. Develop a risk monitoring process

Plan for risk management

1. Create a risk register to track identified risks
2. Establish a process for identifying new risks throughout the project
3. Plan regular risk review meetings
4. Develop a communication plan for risk-related issues

12. Final Decision-Making Process

You’ve done the legwork. Now it’s time to make the call. This step guides you through the final evaluation and decision-making process.

Create a weighted scoring system

1. Assign weights to different evaluation criteria
2. Rate each ERP option against these criteria
3. Calculate total scores for each option
4. Analyze score breakdowns to identify strengths and weaknesses

Conduct final vendor presentations

1. Prepare a standardized presentation format for vendors
2. Involve key stakeholders in the presentations
3. Focus on your most critical requirements and concerns
4. Allow time for Q&A and demonstrations of key features

Review and negotiate contracts

1. Thoroughly review all contract terms and conditions
2. Negotiate pricing, SLAs, and support terms
3. Clarify any ambiguities or potential issues
4. Involve legal counsel in the final contract review

Make the final decision

1. Present findings and recommendations to the decision-making team
2. Discuss pros and cons of top contenders
3. Consider both quantitative scores and qualitative factors
4. Reach a consensus or follow your organization’s decision-making process

13. Post-Selection Planning

Selecting your ERP is just the beginning. This final step helps you prepare for a successful implementation and beyond.

Develop an implementation roadmap

1. Create a detailed project timeline
2. Assign roles and responsibilities for the implementation team
3. Plan for data migration and system integration
4. Develop a phased rollout strategy if applicable

Plan for change management

1. Develop a comprehensive change management strategy
2. Create a communication plan for all stakeholders
3. Plan for user training and support
4. Identify and empower change champions within the organization

Establish governance structures

1. Set up a steering committee for ongoing oversight
2. Define decision-making processes for the project
3. Establish regular check-ins and progress reviews
4. Create escalation procedures for issues

Prepare for continuous improvement

1. Plan for post-implementation review and optimization
2. Establish KPIs for ongoing ERP performance monitoring
3. Create a feedback loop for user suggestions and issues
4. Develop a roadmap for future enhancements and upgrades

By following this comprehensive 13-step ERP evaluation checklist, you’re not just selecting software – you’re charting a course for transformative success. 

Remember, the right ERP system is a powerful ally in your business journey, touching every aspect of your operations and driving growth.

Common ERP Evaluation Pitfalls to Avoid

Selecting the right ERP system is a complex and crucial decision for any business. However, even with a detailed checklist, there are common pitfalls that companies can fall into during the evaluation process. 

Here are some of the most frequent mistakes and how to avoid them.

1. Overlooking Less Obvious Costs

While many organizations focus on the upfront costs of an ERP system, there are often hidden or long-term expenses that go unnoticed. These might include:

1. Implementation fees
2. Training and onboarding
3. Ongoing maintenance

Solution: Always calculate the Total Cost of Ownership (TCO) by factoring in all related costs over the system’s lifespan. 

2. Focusing Too Much on Current Needs, Ignoring Future Scalability

It’s easy to focus on solving today’s problems, but your business will evolve, and your ERP system needs to grow with it. Failing to consider future scalability can lead to costly upgrades or even replacement of the ERP system down the road.

Solution: Choose a system that not only meets your current needs but can also scale with your business. 

3. Neglecting Change Management Aspects

Implementing an ERP system is not just about technology—it’s a significant change for your entire organization. Employees will need to adopt new workflows, and resistance to change can lead to poor user adoption and inefficiencies.

Solution: Include change management as part of your ERP evaluation. Plan for comprehensive training and consider involving key team members early in the process to build internal champions for the system.

4. Rushing the Evaluation Process

The pressure to choose an ERP system quickly can lead to a rushed decision, but this often results in selecting a system that doesn’t fully meet your business needs. Taking shortcuts during the evaluation process increases the risk of buyer’s remorse, with costly consequences.

Solution: Take your time and follow a structured evaluation process. Involve stakeholders from all departments, gather input, and assess each potential ERP solution carefully. T

5. Overvaluing Flashy Features Over Core Functionality

It’s tempting to be drawn to flashy features like advanced reporting dashboards or AI frameworks. However, choosing an ERP system based on fancy features while ignoring the core functionalities that support your operations can lead to inefficiencies and frustrations.

Solution: Focus on core functionality that aligns with your business operations. Ensure that the system delivers strong performance in key areas such as financial management, inventory control, and customer service.

Turn Your ERP Choice into a Strategic Business Advantage

Choosing the right ERP system can transform your business, but only if you approach it with a solid plan. By following this comprehensive  checklist, you can avoid common mistakes, ensure seamless integration with your existing tools, and future-proof your operations. 

From identifying your business needs to assessing total costs and vendor reputation, this guide helps you make informed decisions at every step. Don’t rush the process—take the time to thoroughly evaluate your options and with the support of a custom ERP development company, you can tailor your solution to perfectly fit your unique business needs, turning your ERP choice into a strategic advantage that boosts efficiency and drives long-term success.