How to Select an ERP System

What Is ERP and Why Does it Matter?

In the modern business environment, staying competitive means keeping operations connected, efficient, adaptable, and continuously moving forward. Enterprise resource planning (ERP) systems are invaluable for giving you that competitive edge. An ERP system is business software that integrates core functions like inventory management, project management, customer relationship management (CRM), and financial reporting all within a unified platform.

By consolidating data and automating key workflows, enterprise resource planning software enables better visibility across your entire business, improves decision-making, and supports business growth. For greater detail on ERP solutions, a quick refresher on what ERP is and how it works will give you a deeper look into these systems before diving into the selection process.

What to Do Before Choosing an ERP System

When businesses have difficulty keeping up with the demands of partners and customers, one of the most common responses is to look into software systems that can help boost their efficiency and reduce manual tasks. ERP systems are the go-to for many companies. Before selecting an ERP for your organization, follow these steps to help you along.

Identify Business Needs

Before choosing the right ERP system, you must clearly understand your organization’s specific needs and core business processes. ERP selection begins with a close look at your internal operations, what’s working, what isn’t, and where the biggest opportunities for increasing efficiency lie.

Start by documenting your existing systems and business processes, especially practices and tools that are slowing you down. This includes any manual workflows, fragmented systems, or gaps in communication between departments. Consider how you want your new ERP system to streamline operations across areas like human resources, supply chain management, accounting, and order management.

Understanding your current pain points and business objectives will help you identify ERP software features that actually matter, rather than getting caught up in functionality that might not move the needle. Aligning your search with your business needs ensures your ERP system will support real-world operations instead of forcing your teams to adapt to a one-size-fits-all solution.

Secure Senior Management Support

No matter how powerful an ERP system is, it won’t succeed without the support of senior leadership. Executive buy-in is essential to aligning system selection and a successful ERP implementation process with the organization’s strategic goals. Without this support, internal resistance or a lack of resources can easily stall progress.

Leadership should be involved early, not just for approving budgets but also for championing the ERP project across business units. Their backing helps signal the initiative's importance and encourages cross-functional collaboration from the start.

Involving executives also ensures the ERP platform you choose reflects high-level business objectives, not just an IT team's wishlist. This increases the likelihood of long-term success and reduces the risk of insufficiently aligning your software investment and your company’s actual needs. If your organization plans to work with implementation partners, executive guidance can also help streamline partner selection and drive accountability throughout the process.

Evaluate ERP Systems

With so many ERP systems on the market, it’s vital that you approach your search with clear criteria and reliable information. Start by researching options that are tailored to your industry or organization size. Seek out systems that either specialize in handling your type of business data or have the capability to do so. ERP software is not one-size-fits-all, so narrowing your field early will save time and reduce decision fatigue later on.

Read reviews and comparisons from reputable tech publications, analyst reports, and industry sites. These sources can help you assess how different systems perform in real-world settings without relying solely on vendor marketing materials.

Also, speak with peers in your industry, attend virtual demos, and explore vendor case studies to get a sense of how each system operates day to day. The more informed your shortlist is, the easier it will be to make a confident final selection later in the process.

When it comes time to decide on your new system, our tips for a successful ERP integration can be a tremendous help.

Types of ERP Systems

Not all enterprise resource planning systems are built the same. Understanding the key types can help you narrow down your options early and set realistic expectations.

On-Prem ERP Systems

On-premises ERP systems are installed locally on your own servers and managed by in-house IT teams. While they offer full control and customization, they often require large upfront investments in hardware and ongoing maintenance. Users typically have to contact the provider's tech support department for help when the software isn't performing as expected. 

Cloud ERP Systems

Cloud-based ERP systems are hosted off-site and accessed via the web. These systems are increasingly popular with small and midsize businesses thanks to their flexibility, scalability, and lower upfront costs. Most modern ERP solutions support cloud functionality, including mobile access and API-based integrations using web services.

Hybrid ERP Systems

Hybrid ERP software combines elements of both on-prem and cloud systems. They may support cloud access for some ERP modules while keeping sensitive data on internal servers. Organizations often use hybrid setups when transitioning from legacy systems.

Many companies are moving away from early ERP systems and legacy platforms due to outdated interfaces, limited support for newer technologies, and difficulty integrating with modern tools. Migrating from a legacy system to a more modern alternative can significantly improve efficiency and long-term adaptability.

Check out this ERP selection guide from NetSuite for more insight into choosing the right ERP for your business.

Evaluating ERP Platforms and Vendors

Once you've outlined your needs, the next step is evaluating ERP vendors and software. The main goal is to find a solution that aligns with your business's current and future operational goals.

Customization is a key factor. Look for software that can adapt to your internal processes rather than forcing your teams into rigid workflows. Scalability also matters. As your organization grows or evolves, your ERP solution should be able to grow with it.

Keep real-time data access in mind during your search for a new ERP solution. The more current your information, the faster and more confidently your teams can make decisions. Regulatory compliance may also be an essential element, particularly if you operate in a tightly governed industry. Solutions like SAP ERP often include built-in tools to help maintain compliance across regions and reporting standards.

The vendor’s expertise and reliability are equally important. Strong customer support, a proven track record in your sector, and user client feedback can tell you a lot about how implementation and long-term service will go. For some companies, this is also the point where they weigh the value of combining ERP with other tools, such as CRM. If that’s part of your evaluation process, this comparison of ERP vs. CRM can help you decide what to consolidate and what to keep separate.

Avoiding the Wrong ERP System

Selecting the wrong ERP can lead to more problems than it solves. When the system doesn’t fit an organization’s structure or workflows, the results can include disrupted operations, frustrated teams, and costly rework that delays ROI. Without the right fit, companies can end up locked into manual processes they were trying to eliminate in the first place, forcing them to rely on workarounds that increase complexity rather than simplify workflows.

Integration is often one of the first areas where problems surface. If an ERP can’t integrate cleanly with other tools, such as financial software or vendor management platforms, it may require extensive customization just to get basic functionality in place. This all defeats the purpose of simplifying operations and can result in higher support costs over time. Patchwork systems often fail to fill feature gaps, creating a fragmented environment that’s harder to maintain, slower to scale, and increases the risk of teams entering the same data in multiple places. 

Before committing to a solution, revisit your list of requirements and verify that each vendor’s offering can meet them out of the box or with minimal configuration. A well-matched ERP should enhance business operations, not introduce new friction.

Plan Your ERP Migration With Confidence

When comparing product ERP solutions for your office, it's essential to understand your organization’s needs, engage leadership, and evaluate both the software and its provider. A methodical approach to ERP selection puts you in a stronger position to avoid common pitfalls and ensure the system you choose supports your long-term goals.

The journey doesn’t end with selection. Planning your ERP migration is just as important, especially if your teams rely on electronic data interchange (EDI) to communicate with partners. Downtime during ERP and data migration can impact your most critical workflows. Orderful simplifies your ERP/EDI integration by helping you avoid disruptions, reduce manual setup, and keep operations moving smoothly during your transition.

Speak to an EDI expert today and discover how you can make your ERP migration faster, easier, and more reliable.