Choosing the Right ERP Selection Process

Once an organization decides it needs a new ERP, the natural next question sounds simple:

Which ERP should we choose?

In our experience, that’s actually the second decision you need to make.The first decision is: how are we going to decide which ERP is right for us?

Moving to a new ERP is a big project. Done right, it can transform your organization and set you up for success for years to come. Successfully implementing the right ERP can empower all your decision-makers with timely, accurate, and relevant information. It’s a competitive edge.

By contrast, choosing a system that’s a bad fit for your needs (or choosing a system without considering your key needs in the first place) is a very expensive way to make your team slower, less well informed, and unhappy.

ERP selection is not a binary choice between “formal” and “informal,” or between “RFP” and “no RFP.” It’s a spectrum of approaches that vary dramatically in effort, confidence, risk reduction, and cost. Too little process, and you all but guarantee that somewhere in your implementation, you’ll hit a show-stopping limitation. Too much, and you burn your team out before the implementation project itself is underway, and end up with a system that could meet your needs…but doesn’t.

ERP Selection Isn’t One Decision

Most teams talk about “choosing an ERP” as if it’s a single purchase decision. In reality, you’re selecting multiple interconnected things that will shape outcomes just as much as the software itself:

• ERP platform (the product)
• ERP vendor (the company behind it: roadmap, support, pricing posture, long-term viability)
• VAR / implementation partner (the team that will configure, integrate, guide change, and manage your licensing)
• User and support community (the broader network: talent pool, third-party apps, forums, best practices)

That’s why “fit” isn’t only about feature checklists. You’re not just buying the product, you’re buying the whole package: vendor, VAR, and community as well.

ERP Selection Is Part of a Transformation, Not an Event

An ERP initiative is not just a software purchase. It’s a multi-year transformation journey that includes:

• Staff time and opportunity cost
• External advisors or consultants
• Business transformation definition and requirements definition
• ERP (and related stakeholder) evaluation and selection
• Implementation (often in phases)
• Major enhancements
• Ongoing optimization and growth

Selection sits early in that journey, but its impact is long-lasting. A rushed or mismatched decision here can lock in years of friction, rework, or even a future re-implementation.

That’s why we recommend making your ERP selection process part of a Phase 0: Organizing for Success. More to say on that in a future post!

The Real Question: What Kind of Process Do You Need?

Rather than asking “Which ERP selection process is best?”, a more useful question is:

What kind of selection process is appropriate given our constraints, risk tolerance, and goals?

We think of this in terms of CCR: Constraints, Coverage, and Rigor. These are the three main factors that determine whether your ERP decision is a hit.

Let’s unpack each.

1. Constraints: The Non-Negotiables

Every selection operates within constraints. These are the hard edges that shape what is even possible.

Common constraints include:

• Timeline
• Budget
• Security or IT standards
• Regulatory requirements
• Governance and approval structures

There are always constraints and you need to operate within them. When constraints are particularly tight, they may force you toward a narrower or faster process. That’s not inherently wrong, but it should be an explicit choice, not an accident.

Being honest about constraints upfront prevents teams from designing a “Cadillac” selection process they don’t actually have the capacity to run.

2. Coverage: How Much Ground Are You Covering?

Coverage is about how wide and how deep your selection effort goes.

Coverage of You (Requirements)

Coverage increases as you move the assessment of your business processes and requirements from focusing on:

• Business processes: Deal-breakers only → core processes → “leave no stone unturned”
• Requirements: High level → implementation-ready detailed

For requirements, it’s critical to distinguish between:

• Requirements for fit: Can the system do this in a reasonable way?
• Requirements for implementation: How exactly do we want this to behave?

Choosing how deeply you will map out your requirements at this stage of selection is a major factor.

Coverage of Them (ERP Platforms and VARs)

Coverage also applies to your options:

• How many ERPs and VARs are considered?
• How deeply is each evaluated?
• How many make it to demos, references, and finals?

High coverage means casting a wide net and going deep on each option. That takes time and discipline.

3. Rigor: How Defensible Is the Outcome?

Rigor is about confidence, de-risking, and auditability.

High-rigor processes tend to include:

• A formal process followed faithfully
• Clear definitions of fit, weights, and gates
• Refusal to accept “it’s a platform, it can do anything”
• Validation of claims, not just sales narratives
• Tailored demos based on real client use cases
• Documentation that creates a clear chain of custody

Rigor answers the uncomfortable question:

If we’re asked a year from now why we chose this ERP and this VAR, can we prove we made the right decision?

For many organizations, especially public or regulated ones, that matters a lot.

Putting It Together: Constraints, Coverage, and Rigor

Constraints define the space you can choose from. Within that space, Coverage + Rigor define the tradeoffs you want to make with your selection.

What moves you toward the top-right (high coverage + high rigor)?

• High cost of being wrong
• Board/PE scrutiny
• Complex operations
• Multi-entity footprint
• Regulatory oversight

What moves you toward the lower-left (low coverage + low rigor)?

• Short time horizon
• Simple operating model
• Budget constraints
• Limited external accountability

Neither extreme is universally “right.” The mistake is either running a lightweight process when the cost of being wrong is high, or making it so onerous to decide that you can’t get it done.

Regardless of which process archetype you chose, a well run selection process should produce

• An artifact that documents why the process is being undertaken, who is involved, decision making rights, constraints, and what kind of selection process will be used
• A requirements document that includes a brief history of the organization, current state, and desired future state. This may include key design decisions related to the IT ecosystem surrounding the ERP
• Scoring matrix that captures how well each ERP/VAR/Vendor met each requirement
• An archive of content submitted by VAR/Vendors and recordings of tailored demos
• An artifact that captures the license footprint and license total cost of ownership for 5 years
• An artifact that captures key elements of the final analysis and the final decision

How Long Will it Take and How Much Will it Cost?

For an enterprise-level organization with a global footprint, complex operations, operating in a highly constrained regulatory environment, a selection process may take a year or more, and include physically gathering stakeholders in a common location. A smaller organization that already knows its pain points well may be able to finish a rigorous-enough process in as little as a few weeks.

In the most recent selection process we helped facilitate, a large Bay Area, California construction supply company was replacing decades-old software to bring business operations from three distinct units together for the first time: retail, wholesale distribution, and construction. A family business with loyal, committed staff, they had far more institutional knowledge than they had documentation. We met with leaders of every business process area: from sitting in on senior management meetings to record the key drivers of their decision-making, to watching the warehouse team pull, pack, and load an order. We documented the requirements from each area and played them back to the team for confirmation. Then we helped them make a short-list of viable ERP options, and worked with them to find a high-reputation partner for each platform. Finally, we sat with them to review each VAR/vendor’s proposal, weighing strengths and tradeoffs of each. From kickoff to contract signing with their selected platform took about five months; key internal stakeholders invested two hundred hours or so during that time.

Organizational culture has a massive impact on the real cost of selection.

Traits that increase effort and therefore cost include:

• Lack of vision or concrete goals
• Weak documentation or data hygiene
• Unclear ownership and decision rights
• Indecisiveness
• Chronic decision revisiting (“revision-ism”)
• Excessive exceptions

Two organizations can run the same selection process on paper and experience radically different costs and outcomes based on these factors alone.

Even with a great plan, things can go sideways. This most often occurs when:

• The plan is put on the shelf and never looked at again. It was performative when it needed to be operational
• Necessary stakeholders were not involved at the right time in the right way. This often requires jack-hammering out the foundation of the requirements or restarting the vendor engagement process
• The organization gets distracted or overwhelmed by running the business. This can lead to delays, loss of momentum, and loss of confidence
• Perfection is the enemy of good. The desire for always more information undermines the ability to make good enough decisions
• Decisions are revisited even when no new material information is available. Rework
• Findings and decisions (what you are going to do, what you aren’t going to do, and why) are not properly documented. This can lead to confusion about how the organization got to this point, unnecessary relitigation, and even finger pointing

One Last Choice: Who Runs the Process?

Some organizations have internal teams with the knowledge, experience, and capacity to run a high-coverage, high-rigor selection on their own.

Many do not.

External consultants can add:

• Change management expertise
• ERP, Vendor, VAR, and community market knowledge
• Process discipline
• Vendor management
• Capacity and temperament to keep things moving

But they can also introduce risk if they are biased toward certain platforms or vendors. Transparency and independence matter.

Final Thought

ERP selection is not about finding the “perfect” selection process.

It’s about choosing a selection process that is congruent with your constraints, your risk tolerance, and the cost of getting it wrong — and then executing that process well.

Make that decision deliberately, and everything that follows gets easier.