Dominik Mayer Product & Technology
Basel,
Selection
8 criteria to consider when choosing an ERP system
Between 2018 and 2023, worldwide revenue for enterprise resource planning (ERP) software rose by 30 percent. Analysts say companies are adopting ERP systems more often because they provide an efficient, integrated way to manage a wide range of business processes. Growth-oriented firms look for solutions that help them improve operational efficiency, cut costs, raise customer satisfaction, and stay competitive. A solid ERP system can do all of that.
In this article, we look at what strong ERP software looks like, which types of ERP solutions exist, and how you can approach selecting an ERP for your business.
Highlights
- There are industry-specific, on-premises, and cloud ERP systems
- An ERP solution makes sense when your systems and processes need to keep pace with company growth.
- Scalability, future-proof design, mobile-first design, and integrations are key ERP criteria
- When selecting, start with the best-known ERP vendors
- Your challenges, requirements, budget, and customer references matter most in the selection
Dominik Mayer Product & Technology
Basel,
The basics
What does ERP stand for?
ERP stands for enterprise resource planning and describes software that integrates and manages a company’s core business processes from one place. At their core, ERP systems help optimize processes across finance, supply chains, HR, production, and customer management. All data and workflows are consolidated so every part of the company can access real-time information.
The central goal of an ERP system is to make information available seamlessly across departments. That increases efficiency and improves decision-making, because as a leader you can rely on consistent, up-to-date data.
Types of ERP
What kinds of ERP systems are there?
Size, industry, and individual requirements all shape which ERP system is the right fit. The right choice depends on what your company needs, which functions you require, and how flexibly you want to adapt the software. There are three main types of ERP systems:
Industry-specific ERP systems
An industry-specific ERP system makes sense when your company has specialized requirements. Manufacturing companies, for example, often need a solution that optimizes inventory and production processes, while retail tends to focus on stock management and logistics. Service companies frequently need features for managing projects and resources.
On-premises ERP
Traditionally, ERP software was installed on company-owned servers — that is, on premises. That option gives you a high degree of control over your data and can be customized extensively, but the high upfront investment in servers and IT infrastructure is a significant cost factor.
Maintaining such a solution also often requires a large internal IT team to handle software updates and data security. For those reasons, companies increasingly prefer cloud ERP systems today.
Cloud ERP
Cloud ERP systems, by contrast, offer a scalable, flexible, and more cost-effective alternative. The software is delivered over the internet, which means lower upfront investment and simpler maintenance, because the vendor handles updates and security measures. You can access it from anywhere, which is especially useful for companies with multiple sites or remote teams.
For more on cloud ERP systems, see our article Cloud ERP compared: The best solutions for Swiss companies.
Taking stock
When do I need an ERP system?
The right time to implement an ERP system in your company depends on several factors. Here are some typical signs that point in that direction:
Company growth and scaling challenges
As your company grows, business processes become more complex. Managing orders, inventory, finance, and HR becomes harder when you rely on manual processes or separate systems that are prone to errors. An ERP system lets you consolidate all data in one central system, which simplifies management and reduces errors.
Operations across multiple sites
Once a company is spread across multiple sites or departments, it needs a central system that connects every area efficiently. ERP software lets you manage data in real time across locations and improve collaboration.
Rising compliance and reporting requirements
Regulatory requirements such as data protection law or industry-specific rules increasingly require companies to produce detailed reports and evidence of their operations. ERP software helps you meet those requirements by capturing all relevant data centrally and generating reports automatically.
Checklist
What makes a good ERP system?
A good ERP system stands out for the range of functions it offers and for how well it adapts to a company’s needs. Here is a selection of the most important characteristics a high-quality ERP solution should provide:
Integrated data and real-time information
The ability to consolidate all company data in one system and access it in real time is one of the greatest strengths of an ERP system. Finance can see immediately how many invoices are outstanding, while sales can see which products are available.
Scalability
Your ERP software should keep pace with your company’s growth — for example, when you open a second site. Cloud-based solutions such as Microsoft Dynamics 365 Business Central are well suited here, because they offer flexible infrastructure that can adapt quickly to changing requirements.
Mobile access
In a digitally connected world, access to company data from anywhere is essential. Mobile ERP solutions let employees access customer and order data whether they work in the office, from home, or on the road.
Interfaces and API integrations
Modern ERP software should be able to integrate seamlessly with other tools such as CRM systems, e-commerce platforms, or accounting software. That usually happens through APIs that enable smooth communication between the different systems.
Future-proof technology
An ERP system should be built on future-proof technologies so it stays competitive over the long term. In particular, that means it is cloud-ready and supports new technologies such as artificial intelligence or automation.
Established players
Examples of ERP systems
Different ERP systems have a proven track record in different markets and industries. Here are some of the best-known examples:
SAP
SAP is one of the largest ERP software vendors worldwide. With SAP S/4HANA Cloud it mainly targets large companies with complex business processes, while SAP Business One is a solution developed for SMEs. SAP offers comprehensive functions tailored to industries such as manufacturing, finance, and retail.
Microsoft Dynamics 365
Microsoft Dynamics 365 also offers several ERP solutions, including Business Central and Finance. The former is aimed specifically at SMEs and gives users a comprehensive, scalable, cloud-based platform. Dynamics 365 Finance also targets small and medium-sized enterprises, but with a focus on financial management.
Nexova Dynamics is your specialized ERP partner. We help you implement Microsoft Dynamics 365 Business Central and make sure you can put the software to effective use in your business.
Oracle ERP Cloud
Oracle offers a powerful ERP solution for large companies with complex requirements. The cloud-based software lets you manage processes from finance and HR through to procurement and supply chain management.
In our article 10 popular ERP systems in Switzerland compared you will find an overview of the best-known ERP systems, including their pros and cons.
Making the choice
How do I find the right ERP system?
Now that you know when ERP software makes sense for your company and what a good ERP looks like, it is time to select the right system. There are several points to keep in mind, because the market offers a wide range of options. They can all look equally strong, but they are not necessarily a fit for your company.
With a structured approach, you can find the best solution for your business. Start by identifying challenges, requirements, and budget, then compare vendors.
Analyze company needs
Start by identifying your company’s specific requirements. Which departments does the system need to support? Which processes are especially time-consuming or error-prone? What goals do you want to achieve with the ERP software? These are key questions you need to answer to determine what your ERP system must cover. Capture the requirements in your requirements document.
Budgeting and resource planning
An ERP system is an investment you should plan for carefully. Alongside license costs, factor in the costs of implementation, training, and ongoing maintenance. Cloud ERP systems have the advantage that you do not need expensive hardware or a large upfront investment, and the vendor handles updates and maintenance.
Compare vendors
You should shortlist several ERP solutions and compare their offerings. Alongside functions and costs, also consider support and case studies from other companies.
Narrowing the field
8 criteria for selecting the right ERP software
Once you have defined your requirements and know your goals and budget, you can get more specific in your selection: What matters most to you in an ERP solution — support, flexibility, or usability? Do you want an industry-specific system or a cloud-based ERP? The more specific you get, the better the fit will be.
Here are some of the most important criteria you can work through to make ERP selection easier:
- Software type: Start by defining which type of ERP software your company needs. Do you need an industry-specific solution, a classic on-premises system, or flexible cloud ERP software?
- Functionality: Consider which functions your company needs and which business areas the system must support. Can the ERP system you are considering cover all business processes?
- Adaptability: A good ERP system should adapt to your company’s specific needs. When selecting, look at which customization options are available.
- Usability: The ERP system’s user interface should be intuitive and easy to use so you minimize training time and increase employee adoption. Software that nobody can use efficiently will hinder productivity rather than improve it. Many ERP vendors offer a free demo so you can put the interface through its paces.
- Cost–value balance: Alongside license costs, factor in one-time implementation costs and long-term maintenance. Make sure the system you choose delivers strong value over the long term.
- Support and maintenance: Technical support is a critical factor in ERP selection. The ERP vendor should provide reliable, fast assistance — especially during implementation. References are especially helpful here. Free support can also help you avoid unexpected costs.
- Data security and compliance: The ERP software must meet legal requirements, especially data protection law. It should also include advanced security features such as data encryption and access controls to protect your company data. That matters especially with cloud-based solutions.
- Future-proofing and flexibility: When selecting an ERP system, think not only about today’s requirements, but also about the future. Where should your company be in the next few years? Does the ERP system you are considering already have the functions you will need, or can the software be extended easily? An ideal ERP system should also meet future requirements and grow with you.
ERP selection checklist
With countless systems on the market, ERP selection can feel overwhelming at first. Our tip: Start with the best-known vendors and define the criteria that matter most for your company.
Use this five-step checklist to find the right ERP software:
- Demo phase: Once you have chosen a system, test it in a demo environment to confirm it meets your requirements.
- Challenges: Note your challenges and match them against the ERP system you are considering.
- Needs: Clearly define the requirements and processes the ERP system should cover.
- Budget: Account for one-time and ongoing costs for implementation, licensing, and maintenance.
- Reviews: Check the vendor’s experience, support quality, and references from other customers.
Choose with confidence
Nexova Dynamics helps you select and implement an ERP system
ERP selection is a critical step toward optimizing your business processes, increasing efficiency, and supporting your company’s long-term growth. A good ERP system is scalable, future-proof, integrates seamlessly, and is accessible on mobile devices.
When selecting an ERP, keep several points in mind: functions, budget, adaptability, flexibility, support, customer reviews, security, technologies, and more. A needs analysis can help you decide how much weight to give each of these factors.
Need help making the decision? As a Microsoft Dynamics 365 Business Central partner, we have extensive experience with the cloud ERP solution and can work with you to determine whether the software fits your business needs.
