Implementing an ERP system is a strategic decision for many companies, directly affecting process management efficiency, data access, and business flexibility. Choosing the right system is not easy—it requires analysis, planning, and a well-informed approach. This article provides a step-by-step framework guide to help avoid common mistakes and facilitate the right decision.

Table of Contents:

1. How to assess your company’s needs before choosing ERP
2. What criteria to consider when choosing the most popular ERP systems
3. How to choose ERP and avoid mistakes
4. Differences between on-premise and cloud ERP systems – ERP system ranking
5. Licensing models and ERP implementation costs

How to Assess Your Company’s Needs Before Choosing ERP

Every company is unique, so selecting an ERP system should begin with a thorough analysis of business needs. At this stage, gather input from key departments such as finance, production, logistics, and sales—each may have different expectations from the ERP system.

A good starting point is to conduct workshops with future users of the system. This will help gather both functional and technical requirements. Then, a document should be created outlining expectations for the system. This document should include a list of required modules, expected number of users, anticipated data volumes, and reporting needs.

Future growth plans should not be overlooked. An ERP system is a long-term investment and must be scalable and ready to adapt to changing needs. Also consider your current IT infrastructure to determine whether your company is prepared for cloud-based solutions or prefers an on-premise system.

What Criteria to Consider When Choosing the Most Popular ERP Systems

The popularity of an ERP solution may indicate its functionality, stability, and user support. However, the most popular ERP system isn’t always the best fit for every organization. The system must be tailored to individual company needs.

Key aspects to consider include:

• Functional scope: Does the system offer all the required modules, such as accounting, inventory, production, or project management?
• Industry specificity: Is the system designed for your industry? A manufacturing company will have different needs than a service provider.
• System flexibility: Can the system be customized without constant involvement from the vendor?
• Technical support: Is local support available?
• Integration capabilities: Can the ERP connect with your existing systems?

It’s also wise to consult user reviews and case studies from similar companies to better understand real-world performance and vendor reliability.

How to Choose ERP and Avoid Mistakes

ERP selection is fraught with potential costly mistakes. One of the most common is the lack of clearly defined requirements. Companies may purchase an overly complex system or, conversely, one that is too limited.

Another pitfall is ignoring total implementation costs. Often, attention is focused solely on licensing fees, overlooking expenses for configuration, training, and ongoing maintenance. A complete Total Cost of Ownership (TCO) analysis should be conducted, covering the entire lifecycle of the system.

Employee involvement is also crucial. Decisions made solely by IT or senior management without user input often result in low adoption rates.

To avoid these mistakes, we recommend a structured methodology that includes:

• Requirement analysis
• Demo testing
• Detailed comparison of multiple vendors

Differences Between On-Premise and Cloud ERP Systems – ERP System Ranking

One of the key choices during ERP selection is the deployment model: on-premise or cloud. Each has its pros and cons, and the best option depends on factors such as IT strategy, budget, and security requirements.

• On-premise ERP systems are installed on a company’s internal servers, giving full control over data and infrastructure. They are often chosen by organizations with strong IT capabilities or legal obligations around data storage. Downsides include high upfront costs and the burden of maintaining the infrastructure.
• Cloud ERP systems offer flexibility and access from anywhere. Subscription models reduce initial investment, and the vendor handles updates, security, and maintenance. However, they require stable internet access and may involve dependency on the service provider.

When reviewing the ERP system rankings, consider:

• Functionalities
• Deployment options
• Flexibility
• Technical support
• Scalability and industry reputation

Licensing Models and ERP Implementation Costs

Costs are often a decisive factor in choosing an ERP system. Total expenses include multiple elements that should be carefully analyzed.

Start by selecting a licensing model. The two most common are:

• Perpetual license (on-premise): A one-time payment for lifetime use of the software.
• Subscription model (cloud ERP): Ongoing payments, typically monthly or annually.

In addition to license costs, consider:

• System configuration
• Data migration
• Employee training
• Customization

Costs also continue after implementation and include:

• Updates
• Technical support
• Future system enhancements

Prepare a detailed cost breakdown for each option to evaluate the long-term financial impact and choose the most cost-effective solution.