How to Select an ERP System: A Practical Evaluation Framework

An ERP system touches every department and stays for a decade. Getting the selection wrong is expensive; getting it right changes how the business runs. The difference is almost always method, not luck.

TL;DR: Make five decisions in order: process scope, deployment model, vendor, implementation partner and success measures. Write requirements before looking at products, script the demos around your own processes, compare total cost over five years and choose the partner as carefully as the software. If you run SAP ECC, the maintenance calendar (2027 mainstream, 2030 extended) sets the timeline.

How do you define ERP requirements?

Process scope. Which processes will the ERP run? Finance, procurement, manufacturing, sales, service, supply chain? List them and mark what must be live in phase 1 and what can follow. Projects that put everything into phase 1 are the ones that take three years.

Integration needs. Which systems must the ERP talk to: CRM, e-commerce, warehouse management, logistics providers, banks? For each interface, note the data, the direction and the frequency (real time or batch). This is the part companies underestimate most often.

Industry requirements. Pharma needs batch tracking and compliance reporting. Manufacturers need bills of material and shop floor control. Service companies need project accounting and time recording. If the standard product does not cover yours, you are building from day one.

User population. How many users, in which roles, using which functions? ERP licensing usually differs by user type, so the user profile directly drives cost.

Non-negotiables. Name the 15 to 20 requirements that eliminate vendors: industry functions, country and language coverage, regulatory needs such as Swiss VAT and QR-bill, and critical integrations. Every vendor ticks 200 boxes on a feature list. These 15 to 20 decide your shortlist.

How do you evaluate ERP vendors?

Step 1: Longlist (five to seven vendors). Filter by your non-negotiables. Use analyst reports, industry associations and, above all, peers. Analysts tell you what is possible. Peers tell you what happened.

Step 2: RFI. A structured questionnaire on fit: industry, company size, countries. This usually narrows the field to three or four.

Step 3: RFP and scripted demos. Send your own scenarios, not a feature checklist, and ask each vendor to run them live. Do not accept the standard presentation. Scripted demos expose the gaps that polished slides hide.

Step 4: Reference calls. Talk to two or three customers per vendor, ideally in your industry and of similar size. Ask about duration, unplanned costs, support quality and whether they would choose the same product again.

Step 5: Total cost. Compare five-year cost: subscriptions or licences, implementation, data migration, extensions, training and support. The cheapest licence often comes with the most expensive project.

Cloud ERP or on-premise: how do you choose?

Cloud ERP (SaaS). The vendor runs the system and ships the upgrades. You configure and extend through defined interfaces but do not modify the core. Examples: SAP S/4HANA Cloud Public Edition, Oracle Fusion Cloud ERP, Microsoft Dynamics 365. It suits companies prepared to run on standard processes, and it is the default for most new implementations. Which benefits of the cloud model hold up in daily business, and where they do not, is covered in the advantages of cloud computing that actually matter.

Managed private cloud. A dedicated instance operated by the vendor. More room for custom code, less operational load than on-premise. With SAP this is S/4HANA Cloud Private Edition, usually contracted through RISE with SAP. It is where large ECC landscapes with years of custom development tend to go. Dates, options and a path finder for your own system are collected in our hub on SAP ECC end of maintenance 2027.

On-premise. You host and run everything and decide when to upgrade. Maximum control, maximum responsibility. Today it makes sense mainly for specific regulatory or technical constraints.

The deciding factors: how far you need to deviate from the standard, whether you want to run infrastructure yourself, data residency requirements and your preference for operating or capital expenditure. We compare the three SAP options in detail in our deployment options guide.

What does this mean if you run SAP ECC today?

For ECC customers the selection has a fixed calendar. SAP provides mainstream maintenance for SAP Business Suite 7, which includes ECC, until the end of 2027, and optional extended maintenance until the end of 2030 at a premium (SAP News). For large, complex landscapes SAP added the SAP ERP, private edition, transition option, which covers 2031 to 2033 but requires the systems to run on SAP ERP, private edition before the end of 2030 (SAP News).

So the question is rarely “SAP or not?” but “conversion or new implementation?”. A conversion to the private edition keeps your custom code and your process history. A new implementation on S/4HANA Public Cloud drops both and starts from SAP’s standard. For mid-sized companies whose modifications mostly compensate for gaps that the current standard now covers, the second option is often the cleaner one.

How we run an ERP evaluation at Spadoom

We implement SAP S/4HANA Public Cloud and the customer processes around it (Sales and Service Cloud V2, Commerce, CPQ, Field Service) with one team. That shapes how we evaluate fit:

1. Process walk-through against the standard. We take your ten most important processes and run them in the Public Cloud standard, not in slides. Gaps are named, with a proposed solution: configuration, clean extension or process change.
2. Integration map. Every interface the ERP has to carry, including CRM, shop and banking, with owner and direction. The ERP-CRM seam gets particular attention, because that is where orders fail to post and quotes fail to price.
3. Data readiness. A look at master data quality before the plan, because data migration is where schedules slip.
4. Fixed-scope result. The S/4HANA readiness assessment packages these steps into five days at a fixed price, credited against the project if you go ahead.

The transformation guide shows the target architecture we work towards. If you are also choosing a partner, our overview of partners for cloud ERP and CRM in Switzerland explains what to check, and S/4HANA Public Cloud and Sales Cloud V2 as one stack shows how the two fit together.

What are the common ERP selection mistakes?

Choosing the vendor before defining requirements. “We are going with SAP” or “we want Dynamics” before anyone has mapped the processes. The vendor should follow from the requirements. This is the most expensive mistake in ERP selection, and the most common one.

Ignoring total cost of ownership. Comparing licence prices without implementation, extensions, training and five years of operations. Procurement tends to optimise the number that is easiest to compare.

Underestimating change management. An ERP changes how people work. Without end users in the selection, you can pick a system that fits on paper and fails in daily use.

Scope creep during selection. “Finance and procurement” becomes “and HR, CRM and warehouse in phase 1”. More scope means more time and more risk. Start lean and add later.

Skipping the partner evaluation. The product is only as good as the team configuring it. Check references, team composition and whether the partner can also carry the neighbouring systems. A good partner makes a decent product work. A weak one can spoil a great product.

FAQ

How long does ERP selection typically take?

For a mid-sized company, a structured selection usually takes three to six months: requirements first, then RFI and shortlist, then scripted demos and reference calls, then negotiation. It gets shorter when requirements are written down before anyone talks to a vendor, and longer when the scope keeps growing during the process.

Should I hire a consultant for ERP selection?

For a first ERP or a platform change, outside help pays off, mainly to structure requirements and script the demos. Be clear about the role: an independent advisor helps you compare vendors, an implementation partner like Spadoom helps you test whether a specific product such as S/4HANA Public Cloud fits your processes. Both are legitimate, as long as you know which one you are talking to.

How do I compare SAP, Oracle and Microsoft?

Compare them against your own scenarios, not against each other’s feature lists. SAP is strong in multi-entity, multi-country manufacturing and distribution. Oracle is strong in finance. Microsoft Dynamics fits companies deeply invested in the Microsoft stack. The better question is which product runs your ten most important processes in its standard, and which partner will be accountable for the result.

What does an ERP implementation cost?

It depends on process scope, number of entities and countries, data quality and how many integrations the ERP has to carry. Licences are often the smaller part; implementation, data migration, testing, training and the first year of support make up the rest. Get a scoped estimate for your processes rather than relying on industry averages.

When should I replace rather than upgrade my current ERP?

Replace when the vendor no longer develops the product, your business has changed fundamentally, or modifications block every upgrade. For SAP ECC the calendar decides too: mainstream maintenance ends in 2027 and optional extended maintenance in 2030, so the question is less whether to move than how, as a conversion or as a new implementation on S/4HANA.

Should ERP and CRM be selected together?

Where possible, yes. Most problems appear at the seam between the two: the order that will not post, the price the quote cannot resolve, the customer who exists twice. Choosing both with the integration in mind, and ideally with one team accountable for it, removes the most expensive surprises.