Selection

ERP selection checklist for small and medium businesses

A practical checklist to align scope, business outcomes, demos, and decision controls before you shortlist vendors.

Most ERP shortlists go wrong long before contract signature. The problem is rarely that teams did not work hard enough; it is that they evaluated products before agreeing how success would be judged.

For a small or medium business, the cost of a weak shortlist is high. You lose months in demos, absorb avoidable consulting spend, and often end up choosing the partner who sounded safest rather than the platform that fits your operating model.

A strong checklist should help the team slow down in the right places: scope, commercial assumptions, data quality, operational constraints, and ownership of decisions.

The questions to answer before you talk to vendors

• What are the top business outcomes the programme is meant to deliver in the next 12 to 24 months: better stock control, faster close, cleaner project billing, lower manual rework, or better reporting confidence?
• Which processes are truly in scope for phase one, and which are being left out on purpose so the project remains executable?
• Which current pain points are process problems rather than system problems, and therefore should not be solved by software alone?
• Which constraints are non-negotiable: existing Microsoft stack, Australian reporting requirements, group structure, warehouse complexity, CRM dependency, or project accounting needs?

What a useful vendor scorecard should include

• Operational fit: order-to-cash, procure-to-pay, warehouse flow, production, project delivery, or service coverage based on your real scenarios.
• Finance and reporting fit: management packs, approvals, audit trail, close effort, dimension model, and group visibility.
• Delivery risk: data migration difficulty, integration count, change management load, testing effort, and internal team readiness.
• Partner confidence: relevant industry experience, realistic scope assumptions, governance method, local support strength, and reference quality.
• Commercial clarity: software, implementation, support, enhancement, and hidden future costs rather than headline licence price alone.

Common small-business selection mistakes

• Letting a polished demo outweigh the evidence from real operating scenarios.
• Treating implementation partner choice as a later commercial step instead of part of the product decision itself.
• Trying to include every process pain point in phase one because leadership wants “one big reset”.
• Ignoring master data quality and assuming the new system will solve it automatically.
• Failing to document why the losing vendors lost, which weakens internal alignment when commercial pressure starts.

A practical selection rhythm

• Week 1 to 2: agree business outcomes, shortlist criteria, and phase-one scope boundaries.
• Week 3 to 4: run targeted demos using your own scenarios and edge cases.
• Week 5: compare delivery assumptions, partner quality, and commercial model side by side.
• Week 6: run reference checks and a final decision workshop with named sign-off owners.

FAQ

• How many vendors should we shortlist? Usually two or three. More than that creates noise and slows decision quality.
• Should we run an RFP? Only if the business already understands its real requirements. Otherwise, a lighter scenario-led process is usually more useful.
• How early should we involve finance? Immediately. Finance structure, control needs, and reporting expectations shape the whole selection outcome.