Picking the wrong cloud ERP solution provider can cripple a growing business. But choosing wisely empowers your business to achieve greater levels of success.
The tricky part is knowing what matters most when evaluating cloud ERP solution providers.
Here’s the brutal truth: Most software failures don’t have to do with choosing a “bad” software package. They fail because they never knew what to look for.
With that in mind…
Let’s go over:
- Why ERP evaluation has never been more important
- 5 Critical Factors Growing Companies Should Consider
- A step-by-step process for evaluating cloud ERP solution providers
- Common ERP Evaluation Mistakes that Spell Project Failure
Why ERP Evaluation Has Never Been More Important
The ERP landscape is dramatically different than it was just 5 years ago.
Cloud ERP solution providers now account for the majority of all ERP deployments. In fact, recent statistics show 70.4% of ERP installations were cloud-based in 2024. That number is growing year after year.
This evolution of ERP presents both opportunities and new challenges for growing companies.
On one hand, cloud ERP solutions:
- Cost less money upfront
- Implement much faster
- Scale easier as your business grows
- Provide automatic upgrades and new features
But with so many cloud ERP solution providers fighting for your attention, how do you know who is legit?
How do you accurately compare features, Oracle netsuite pricing, and overall fit before making a commitment?
Most companies never get past the shiny object syndrome…
They get caught up in comparing point features and lose sight of how well a given solution actually fits with their business.
5 Critical Factors Growing Companies Should Consider
Successful companies take the time to understand exactly what they need from a cloud ERP solution provider.
Whether we’re talking about pricing models or implementation services – knowing what matters most makes evaluating vendors that much easier.
Scalability & Future-Proofing
Your business is growing (otherwise you wouldn’t be reading this) which means you need technology that grows with you.
But how long should your ERP solution meet your company’s needs? Ten years? Twenty years? Forever?
Pick any cloud ERP solution provider and look at their scalability options. How well does the system support growth in transactions, concurrent users, features, business units, etc?
Can the software scale with your company’s growth projections? Or will you be forced to switch systems in the next few years?
Total Cost of Ownership
Ah, the age-old cashflow topic of nerd talking.
When budget is tight, it’s tempting to go with the cloud ERP solution provider that offers the lowest monthly fee.
But don’t forget about implementation fees. Customisation costs. Training expenses. Integration headaches. And any other hidden costs that come along with switching systems.
Take the time to calculate total cost of ownership over a 5-10 year period. That gives you a much better idea of the financial commitment you’re really making.
Industry Specific Functionalities
Every industry has unique needs that require specialized functionality.
Manufacturing companies need strong production planning, distribution requires robust inventory management, and retail needs seamless point-of-sale integration.
Look for cloud ERP solution providers with industry-specific solutions or highly customizable platforms that can be tweaked to fit your exact needs.
Implementation & Support Services
“Garbage in, garbage out.”
Even the best cloud ERP solution provider is only as good as the people implementing it.
According to recent research, ERP projects have a 50% failure rate the first time around. Why do so many ERP implementations fail?
Poor quality support from the cloud ERP solution provider is one of the biggest reasons.
Do your homework before selecting an ERP vendor. Look for providers with dedicated implementation teams that have a proven track record of success.
Cloud Migration Services
Moving from an on-premise solution to the cloud? Make sure your selected cloud ERP solution provider offers solid migration services.
While a good portion of cloud vendors support data migration, not all take the time to ensure a seamless transition.
Ask potential vendors about their migration process. How much will it cost? How long will it take? What’s their success rate? What happens if something goes wrong?
You get the idea.
How to Evaluate Cloud ERP Solution Providers
Knowing what matters most is one-half of the battle. Creating an ERP evaluation process that simplifies decision making is equally important.
Outline your Current and Future Needs
Take stock of your current business processes. Where are the pain points? What areas of your business are you hoping to improve with a new ERP solution?
Don’t forget to look ahead. What does your company hope to achieve in the next 5-10 years? Where will you be doing business? How many customers will you have? How many employees?
Having a clear idea of your current and future state will help immensely when speaking to vendors.
Request a Custom Demo
Nothing wastes a sales team’s time like a generic demo script that doesn’t apply to your business.
Do your homework before meeting with cloud ERP solution providers. Identify a few daily business tasks that are painful, then ask the vendor how their solution fixes those specific pain points.
This concept applies to product demonstrations and sales calls. Only discuss features that pertain to your company’s needs.
Stay firm on this point. Vendors who try to upsell you on needless features and capabilities are simply not interested in your best interest.
Ask for References
This point cannot be stressed enough.
Always ask for references. Specifically, references that are currently using the ERP solution in a similar capacity as you are.
The right cloud ERP solution provider will have no problem providing you with the contact information of happy customers.
Once you get the green light to contact references, here are some questions you should ask:
- How long did implementation take?
- Were there any unexpected challenges?
- How responsive is support?
- Would you work with this cloud ERP solution provider again?
Research Vendor Stability
Your chosen ERP solution is going to be a long-term partnership. Like marriage, you want to make sure it’s something that can last.
If a cloud ERP solution provider is constantly struggling to stay afloat, support and innovation will suffer. Worse yet, they could go out of business altogether.
Take some time to look into financials of any vendors you are seriously considering.
ERP Evaluation Mistakes that Guarantee Failure
If you’re like most business owners, you are constantly looking for ways to improve your operation.
While few would ever admit it, many ERP implementations fail for the same reason poor planning.
Avoid these common ERP evaluation mistakes to set your implementation up for success from day one.
Making Rushed Decisions
There is no “best” time to evaluate cloud ERP solution providers.
The reality is that ERP software can be evaluated at any stage of your business. With that being said, don’t let yourself get rushed into making a decision.
If you’re feeling pressured to “just pick something,” walk away.
Neglecting Change Management
New technology does not automatically fix problems.
No matter how robust or intuitive your new ERP solution is, there will be employees resistant to change and adopting new processes.
Put a solid change management plan in place from day one. Your ERP implementation will be thank you later.
Having Too Many Requirements
Features. Features. Features.
Too many companies get caught up on how many shiny new features their ERP solution has.
But here’s the thing. Implementing software that checks every box on your requirement’s list probably isn’t the best use of your money.
Organisations with successful ERP implementations stick to the must-haves vs nice-to-haves. It simplifies the buying process and prevents you from getting bogged down in unnecessary details.
Underestimating Data Migration
Data migration is often overlooked during the ERP evaluation process.
But migrating data from your old system to the new cloud ERP solution is one of the biggest hurdles of any ERP implementation.
Taking the time to identify any data quality issues before handing your information over to your vendor can save you a ton of headaches down the road.
Final Thoughts
Selecting the right cloud ERP solution provider isn’t easy. But by knowing what matters most and creating a structured evaluation process, you dramatically increase your chances of making the right decision.
ERP implementations fail because companies lack direction. When shopping for a cloud ERP solution provider, know what you need from the start.
Remember:
- Know your requirements before talking to vendors
- Don’t compare point features
- Understand total cost of ownership
- Get references from similar customers
- Understand how well the software will scale with your business
