How to Evaluate ERP Systems
Selecting an ERP system is one of the most important technology decisions your organization will make. The right platform can sharpen financial visibility, streamline operations, and support long-term growth.
Why a Structured ERP Evaluation Matters
Modern ERP systems go far beyond basic accounting. They touch nearly every part of your organization—finance, operations, inventory, sales, projects, and reporting.
A structured evaluation process helps you:
- Compare ERP systems based on capability, not marketing hype
- Prioritize requirements that matter most to your business and industry
- Identify long-term value rather than focusing on short-term licensing cost alone
- Reduce the risk of costly re-implementation or system replacement down the road
Involve stakeholders from finance, operations, IT, and leadership early in the evaluation process. Their perspectives will help you capture the full picture of what the new system must support.
The Five Core Categories for ERP Evaluation
While every organization is unique, most ERP evaluations come down to a similar set of questions.
Productivity
Will the system actually help your team work faster and smarter?
Functionality
Does it provide the capabilities you need today and in the future?
Technology
Is the platform modern, scalable, and integration-friendly?
Value
Does it deliver a strong return on investment over its useful life?
Risk
Does it reduce, rather than introduce, operational and security risks?
1. Productivity
Key question: Will this ERP system make our people more productive?
ERP systems should remove friction from everyday work. Look for tools that simplify complex processes, reduce manual data entry, and make it easier for users to find the information they need.
What to evaluate
- Overall ease of use and navigation
- Role-based dashboards for finance, operations, and leadership
- Automation for recurring tasks, approvals, and alerts
- Built-in shortcuts such as templates, recurring entries, and copy-from-prior functionality
- Mobile access and support for remote or field employees
Why productivity matters
Even the most feature-rich ERP will underperform if users struggle to adopt it. Systems that are intuitive and thoughtfully designed reduce training time and help your team spend more time on analysis and decision-making—and less time clicking through screens.
- A cluttered or outdated interface that feels difficult to learn
- Heavy reliance on spreadsheets or external tools to "work around" limitations
- Limited automation capabilities or no workflow engine
- Users needing numerous clicks to perform routine tasks
2. Functionality
Key question: Does this ERP system actually do what we need it to do?
Many ERP products advertise similar capabilities, but the depth and flexibility of those capabilities can be very different. Your evaluation should focus on how well each solution supports your real-world processes.
What to evaluate
- Core financials: general ledger, accounts payable/receivable, cash management
- Inventory and warehouse management, if applicable
- Project accounting and job costing
- Fixed assets and depreciation tracking
- CRM and customer management features
- Reporting, dashboards, and analytics
- Support for multi-entity, multi-currency, or multi-company structures
- Configurability: can you adapt screens, workflows, and rules without custom code?
Why functionality matters
Your ERP should support your business as it exists today and as it grows. Choosing a system that barely meets current requirements—or requires heavy customization to do so—can significantly increase cost and risk.
- Critical capabilities require multiple third-party add-ons to fill gaps
- Reporting is limited or relies solely on external tools
- Key processes in your industry require custom code instead of configuration
3. Technology
Key question: Is this ERP technology platform built for where our organization is headed?
Technology underpins how your ERP performs, scales, and integrates with the rest of your ecosystem. Modern cloud platforms make it easier to adopt new tools, support hybrid work, and maintain strong security.
What to evaluate
- Cloud-native vs. hosted vs. on-premise deployment options
- API availability and ease of integration with other systems
- Quality of mobile apps and browser-based access
- Built-in automation, workflows, and event-driven actions
- Update cadence and how upgrades are delivered
- Performance and scalability as transaction volume grows
Why technology matters
Legacy systems can limit your ability to adopt new tools, connect data, or expand into new lines of business. Cloud-based, API-friendly ERP platforms give you a foundation that can evolve with your strategy rather than hold it back.
- On-premise only deployments with no clear cloud roadmap
- Limited integration options or closed, proprietary connectors
- Infrequent updates or manually intensive upgrade projects
4. Value
Key question: Is this ERP system worth the investment over its full lifecycle?
Licensing cost is part of the equation, but it doesn't tell the whole story. Your evaluation should consider total cost of ownership and the efficiencies the system can unlock.
What to evaluate
- Licensing model and how it scales as your team grows
- Implementation and data migration costs
- Training and support costs
- Expected reduction in manual processes and workarounds
- Improved reporting and decision-making capabilities
- Ability to delay or avoid future system replacements
Why value matters
The lowest upfront price rarely represents the best long-term value. Systems that increase productivity, reduce errors, and support growth typically offer a much higher return on investment—even if licensing costs more initially.
- Numerous hidden fees or mandatory add-ons
- Heavy reliance on custom development that will need to be maintained
- Licensing structures that penalize growth
5. Risk
Key question: Does this ERP system reduce risk for our organization—or introduce new risk?
Because ERP systems hold your most sensitive financial and operational data, every evaluation should include a careful look at security, controls, and vendor reliability.
What to evaluate
- Role-based security and user permissions
- Audit trails and change tracking
- Support for multi-factor authentication (MFA)
- Backup, disaster recovery, and uptime commitments
- Financial stability and reputation of the vendor
- Experience and track record of the implementation partner
Why risk matters
ERP downtime, data loss, or security incidents can be extremely costly—both financially and reputationally. A well-designed solution and a proven partner significantly reduce those risks.
- No clear documentation on security practices or certifications
- Limited or no support for MFA and modern access controls
- Unclear backup and recovery processes
Bringing Your ERP Evaluation Together
Evaluating ERP systems doesn't have to be confusing. By scoring each solution across productivity, functionality, technology, value, and risk, you can see clearly which platforms truly align with your organization's needs.
Use this framework to structure demos, ask focused questions, and keep all stakeholders aligned on what "success" looks like in a new ERP system.
Ready to Compare Your ERP Options?
Download the full checklist to use during demos and vendor conversations, or connect with ICS for guidance based on years of experience with cloud and on-premise ERP solutions.