5 Costly ERP Selection Mistakes (And How to Avoid Them)

The High Stakes of ERP Selection

ERP selection is one of the most consequential decisions a growing business makes. Get it right, and you have a foundation for scaling. Get it wrong, and you're stuck with a multi-million dollar mistake for the next decade.

Here are the five mistakes we see companies make repeatedly—and how to avoid them.

Mistake #1: Letting Vendors Define Requirements

What happens: You invite vendors to demo their software. They show impressive features. You get excited and start thinking about requirements in terms of what the software can do.

The problem: You end up with a system optimized for the vendor's strengths, not your business needs.

The fix: Define your business requirements BEFORE talking to vendors. Document your processes, pain points, and must-have capabilities independently.

Mistake #2: Choosing Based on Demo Impressions

What happens: Vendor A has a slick demo. Vendor B's demo is clunky. You pick Vendor A.

The problem: Demos are sales theater. They show best-case scenarios with perfect data. Your reality will be messier.

The fix: Go beyond demos. Ask for reference customers in your industry. Visit their sites. Ask about implementation challenges, not just successes.

Mistake #3: Underestimating Total Cost

What happens: You budget based on license costs. Implementation comes in 3x higher than expected.

The problem: License cost is often 20-30% of total cost. Implementation, customization, training, and ongoing support are the real expenses.

The fix: Budget for total cost of ownership over 5-7 years. Include implementation, customization, training, annual maintenance, and future upgrades.

Mistake #4: Over-Customizing

What happens: The ERP doesn't match your processes exactly, so you customize it heavily.

The problem: Heavy customization makes upgrades expensive or impossible. You're now locked into an outdated version forever.

The fix: Change your processes to match the software where possible. Only customize for true competitive differentiators.

Mistake #5: Ignoring Implementation Partner Quality

What happens: You pick the ERP based on software features, then accept whoever the vendor recommends for implementation.

The problem: Implementation quality varies wildly. The same software can succeed or fail based on implementation partner.

The fix: Evaluate implementation partners as carefully as you evaluate software. Check their track record, team experience, and methodology.

The Selection Framework That Works

1. Document requirements independently

2. Create a structured evaluation scorecard

3. Weight factors based on your priorities

4. Check references thoroughly

5. Evaluate implementation partners separately

The Bottom Line

ERP selection isn't about finding the best software. It's about finding the best fit for your specific business, implemented by a capable partner, at a sustainable cost.

Need help with ERP selection? Talk to us about our vendor-neutral advisory services.