ERP selection and vendor criteria for core financials

Capability gaps that existed between cloud ERP solutions a few years ago are shrinking. This is the time to revamp your evaluation framework for ERP selection and adjust your “scale” to select the right ERP for you. There are multiple dimensions that should be factored into your decision-making criteria, weighing each criterion according to what’s most important to you. When you choose your ERP, you’re not just buying software, but also signing up for a long-term relationship with your vendor, something that is even more important than the actual cloud delivery model being employed.

External polling from our recent webcast highlights two factors that are top of mind for finance organizations: extensibility and user experience.

While these factors are at the top of the list for most participants, customers must look beyond the product itself and weigh the breadth and quality of their ERP vendors’ services and talent that wrap around the platform, including culture, customer experience, and technical architecture and data compliance.

Read more about the importance of each of these areas by downloading the PDF.

According to a Gartner study² on the sales cycle of technology solutions, customers typically spend 16.3 months to seek, evaluate, and make a purchase, engaging with the vendors’ sales teams for about seven of those months.

By following a structured approach, you can evaluate multiple ERP vendors and decide on a best-fit platform in less than three months. This involves three stages—preparation work, vendor demos, and post-vendor demos—in which decision-makers are identified early on, priorities are clearly defined, dependencies are accounted for, and there is clear communication with the ERP vendors.

Defining an exhaustive set of requirements can be time-consuming and involve large swaths of stakeholders. Rather than listing out hundreds of requirements, you should focus on a handful of use cases that underline your unique business outcomes. It’s not about replicating today’s activities. Instead, these signature use cases will ask vendors to weave multiple capabilities together and show how they can be orchestrated by finance users.

Explore tips and tricks for accelerating your decision-making by downloading the PDF.

Modern ERPs unleash large-scale transformation across multiple finance functions (for example, controllership, treasury, and financial reporting). It’s critical to draw feedback and insights from diverse stakeholder groups, including those that interact with the platform every day, as well as finance partners who might only be utilizing the data and reports stemming from the ERP.

It can be tempting to pick your next ERP on broad consensus. This approach generally works if you have a longer evaluation period and your organization has the resources to run multiple cycles of internal socialization, negotiation, and alignment. Tackling these cultural dynamics and arriving at a consensus may take an additional three to four months.

The key to breaking this endless cycle is concentrating decision-making on a smaller group of stakeholders, who can champion change and drive consensus. This decision-making body needs to be clearly defined at the onset of the evaluation. In the Gartner study mentioned above, technology-buying teams consisted of 12–14 participants.³ The broader finance community should participate in the vendor demonstrations and share their perspectives and scores based on the evaluation framework. This will help inform and validate the decision of the few, support overall acceptance of the solution, and pay dividends during the actual implementation.