Laying the Foundation for a Successful ERP Evaluation

Selecting an Enterprise Resource Planning (ERP) system is a critical strategic decision for growth-minded manufacturers. An ERP touches nearly every part of your business, from finance and operations to supply chain and customer service, helping improve productivity and agility. Because of its reach and impact, a successful ERP evaluation starts long before vendors are engaged or demos are scheduled. The following steps outline how your organization can build a strong foundation for a successful ERP evaluation.

Get Buy-In from Ownership and Leadership

An ERP evaluation isn’t an IT, finance or operations project—it’s a strategic initiative that touches every part of your manufacturing business. Visible involvement from both business owners and leaders is critical to setting direction and driving strategy from the get-go. As champions of this process, these leaders ensure alignment with business outcomes and provide the authority necessary to remove roadblocks, resolve conflicts, and keep the project moving forward.

Define Budget and Timeline

Before engaging vendors, determine budget expectations and timing. Start by reviewing historical spend, pressure-testing assumptions and aligning with finance and operations to frame a realistic budget. Keep reading for more detail below on typical investment ranges for organizations of your size. Equally important is understanding a typical implementation timeline to help set realistic expectations for your own timeline, including key dates to select a vendor, kick off the project, and go live.

As a general rule, we recommend avoiding a fiscal year-end implementation. The demands of year-end financial close combined with the intensity of an ERP transition can create unnecessary challenges for your team.

Establish a Cross-Function Steering Committee and Identify SMEs

Create a steering committee that represents key areas of your business to oversee the ERP selection process. Consider tapping into teams from logistics, marketing, finance, and sales departments.

• Limit this group to two to four stakeholders.
• Include a dedicated executive sponsor from the senior leadership team.
• Include a dedicated project leader who is responsible for the day-to-day internal management of the project.

In parallel, identify subject matter experts (SMEs) who deeply understand current processes and pain points. They will play a critical role in defining requirements and ensuring you choose the right ERP solution that addresses your greatest challenges.

Evaluate Your Technology Footprint

Take the time to document your current technology status and define your future-state vision. Ask your steering committee and SMEs:

• What is our business strategy for digital transformation?
• How does an ERP fit into this strategy?
• What systems are in place today?
• Where are the gaps, redundancies, or inefficiencies?

Develop a Clear Requirements Document

Categorize these requirements as MoSCoW: Must-Haves, Should-Haves, Could-Haves, and Won’t-Haves.

Ask your vendor:

• What is included in the core solution?
• Does this require third-party products? If so, can they recommend a partner?
• What are future roadmap plans?
• What is not planned for?

Identify Vendors that Align with Your Business

It’s best to evaluate vendors that can meet your organization’s size, complexity, and growth plans.

• Tier 1 ERP vendors design systems for large, global organizations with complex multi-plant, multi-country, and multi-currency requirements. They’re best suited for companies with more than $500 million in annual revenue, 2,000+ employees, and more than 10 plants. Typical investments include $1+ million in implementation costs and $750,000+ in annual software costs. Example solutions include SAP S/4HANA, Oracle Cloud ERP (Fusion), Infor LN, Infor M3, IFS Applications, and Microsoft Dynamics Finance & Supply Chain.

• Tier 2 solutions are built for mid-size, multi-site, growth-oriented manufacturers without an extensive global footprint. They’re best suited for organizations with $30 million to $500 million in annual revenue, 100+ employees, and up to 10 plants. Typical investments include $200,000+ in implementation costs and $75,000+ in annual costs. Example solutions include Infor CloudSuite Industrial (SyteLine), Epicor Kinetic, Oracle NetSuite, Acumatica Cloud ERP,  Microsoft Dynamics Business Central, SYSPRO, and DELMIAWorks.

• Tier 3 solutions are designed for small, single-site manufacturers or companies early in their ERP maturity journey. They’re best suited for organizations with more than $5 million in annual revenue, 20+ employees, and one to two plants. Typical investments include $50,000+ in one-time implementation costs and $15,000+ in annual costs. Example solutions include Odoo, Global Shop Solutions, Rootstock, JobBOSS², Cetec ERP, and Fishbowl Manufacturing.

Before you choose which vendors to evaluate, consider whether the solution provides true end-to-end functionality. And make sure to review analyst insights from firms like Gartner and Nucleus Research.

One final question: Should you work with the software vendor or an implementation partner?

 Working directly with the software vendor gives you direct access to the experts who build that specific software. However, vendor-led implementations can be less tailored to your business and often prioritize adoption over optimization.

Working with an implementation partner typically gives you more flexibility and personalization. Partners understand your real-world business processes and challenges, allowing them to tailor the system to your needs. Additionally, working with a partner can give you access to professionals with industry-specific specializations.

Not sure which one is right for you? Connect with a SolutionsX team member for a free consultation.