Consider these 3 critical factors when choosing ERP

If you already made the decision to invest in a new ERP system, you’ll find out soon enough that you have plenty of options. Narrowing down the field of vendors is one of the most difficult challenges you’ll face — even before getting to the hard work of implementation.

One of the most avoidable mistakes is choosing an ERP system that doesn’t work for your company from the start, said several experts from Forterro’s global network of ERP companies.

“Unfortunately, this continues to be a risk, as many ERP vendors are motivated to sell more of their product — even if it’s not an ideal fit for your company,” said Forterro CEO Jeff Tognoni.

“Some ERP companies try to generalize their products to increase sales,” Tognoni said. “In doing so, they’re watering down what it was originally intended to do. It’s a little-known fact in the industry. Almost every ERP systems was originally built to serve the needs of a particular industry … even a particular company.”

According to Tognoni, and several other experts throughout Forterro’s global network of ERP companies, when choosing an ERP solution, the 3 most critical factors you need to consider are size, industry and geography.


When choosing a product, ask vendors about the size of the companies they generally service, advised Tove Brodin, a consultant for Jeeves ERP, a company based in Stockholm, Sweden.

“Different systems are designed to fit different sizes of companies,” Brodin said. “You need to think about level of complexity you’re after. A smaller system is often very standardized and they’re easier to start with.”

Brodin also said that, on the other hand, smaller systems can have a lot of functionality but limited flexibility. “You can run into problems when you add a lot of data,” she said.

Mid-market solutions, such as Jeeves are truly in the middle, Brodin said. “They offer deeper functionality and more flexibility. And they’re not as complicated to configure and implement as some of the systems designed for large companies.”

Industry Vertical

Beware of ERP solutions that are designed to serve numerous verticals — instead of your industry specifically.

“If you select an ERP product that is used extensively by other companies in your industry, you likely will run into fewer complications,” Tognoni said. “If a product is not built specifically for your vertical, more than likely, you won’t be able to do automation very well. Your company will be forced to do a lot of things manually. Above all else, choose a solution that fits.”

Tognoni argued that, as a growth tactic, midmarket ERP vendors will expand their target market. Similarly, many of the larger ERP companies will sell their broader ERP products to a lot of different types of companies. “Many vendors will try to ‘verticalize’ their products,” he said. “There won’t be anything substantially different in the product, except maybe a few fields, workflows, or an add-on application, but they will still call it a vertical solution. That’s very different from a product that was built for a vertical from the ground up.”


When choosing an ERP solution, take a look at the geographical location of the customers served by the ERP vendor.

“You want an ERP system that is designed to take into consideration the specific regulations of your country,” said Tognoni. “If these specifications are already addressed, it represents a commitment from the vendor that they will continue to ensure the system remains compliant. What you’re avoiding is the need to make add customizations at a later date, or worse, on a regular basis.”

Tognoni advised to avoid these “localized” products. “A local vendor is much more likely to provide a more complete and simple solution,” he said.

Avoid complications, extra expenses

A product that works the way you do out of the box will produce the lowest total cost of ownership over time.