Questions to Ask ERP Vendors Before Signing

Choosing the right ERP system can make or break your financial operations. A well-suited ERP system streamlines accounting, automates tax compliance, and simplifies financial reporting. But selecting the wrong system could lead to costly mistakes, delays, and inefficiencies. Before signing with any ERP vendor, here’s what you need to know:

• Understand Your Needs: Identify must-have features like multi-currency support, real-time financial reporting, and compliance with US GAAP or international tax laws.
• Evaluate Costs: Look beyond software fees - factor in implementation, training, support, and potential customization expenses. Always request a detailed cost breakdown.
• Assess Vendor Stability: Check financial health, long-term viability, and customer retention rates. A reliable vendor ensures consistent support and updates.
• Implementation & Training: Ask about timelines, methodologies (e.g., agile vs. waterfall), and post-go-live support. Effective user training is critical for success.
• Technical Fit: Decide between cloud and on-premise deployment. Confirm scalability, integration options, and security standards.
• Review Contracts: Scrutinize renewal terms, data ownership, and hidden costs. Negotiate trial periods or proof-of-concept agreements.

Quick Tip: Use a checklist to compare vendors side-by-side, focusing on functionality, costs, and long-term value. This ensures an objective decision that aligns with your business goals.

Financial Functionality and Compliance

Core Accounting Features

Your ERP system must handle the essential accounting tasks that keep your business running smoothly. Start by confirming whether the system includes general ledger management, accounts payable and receivable, cash management, and fixed asset accounting. These are the building blocks of any functional ERP solution.

For US-based companies, compliance with Generally Accepted Accounting Principles (GAAP) is a must. Ask vendors directly if their system supports GAAP and how they maintain compliance as standards evolve. For businesses with multiple entities or subsidiaries, ensure the system supports multi-entity consolidation, allowing for distinct charts of accounts and reporting structures across units[2].

If your business operates internationally, multi-currency support is critical. Find out how the system manages transactions in various currencies and whether it can perform automatic conversions using current exchange rates. Request a demonstration tailored to your actual use cases to see this in action.

Intercompany transactions can be complex. If you operate multiple entities that transact with each other, the ERP should automatically record these transactions and eliminate intercompany balances during consolidation. Be sure to ask about the typical time required for the consolidation process[2].

The system should also support different accounting methods. Verify if it accommodates both accrual and cash basis accounting, and whether it allows switching between them for reporting purposes. Industries with specialized needs - like job costing in manufacturing or time and billing for service firms - should confirm that the ERP addresses these requirements explicitly^[4].

Real-time account reconciliation is another key feature to look for. Manual reconciliations not only waste time but also increase the risk of errors. A strong ERP system should immediately flag discrepancies between subledgers and the general ledger, rather than waiting until the end of the month when you're rushing to close the books.

Once you've confirmed these core accounting capabilities, ensure the system can meet tax and regulatory requirements across all regions you operate in.

Tax and Regulatory Compliance

Navigating tax compliance across the US can be challenging, with varying sales tax rates, income tax rules, and payroll regulations in each state. Ask vendors how their system automates tax calculations for sales tax, use tax, and income tax withholding across all 50 states[2].

Find out how often tax tables are updated. Tax rates change frequently, so your system must keep pace. Ask if updates occur quarterly, annually, or as regulations change, and whether these updates are included in your standard maintenance agreement or require additional fees.

For businesses operating in multiple states, nexus determination can get complicated. Confirm whether the system can handle multi-state income tax allocation and generate quarterly estimated tax payments automatically. If you use tax preparation software, ensure the ERP integrates with it or exports data in the required formats for state and federal tax filings.

If your company has international operations, you'll need to address additional complexities. Ask how the system handles foreign tax compliance, particularly for regulations like FATCA (Foreign Account Tax Compliance Act) if international financial transactions are part of your business^[3].

Audit trail functionality is a must for compliance and fraud prevention. The ERP should automatically log all changes to financial records, including details about who made the change, when it occurred, and what the previous value was. This becomes especially critical for companies subject to Sarbanes-Oxley (SOX) or similar regulations^[1].

Role-based access controls are another important feature. These ensure that users can only access what they need for their role. For example, accounts payable clerks shouldn't have the ability to modify the chart of accounts. Ask vendors to demonstrate how the system restricts access and flags unusual activities, such as large payments or transactions outside normal business hours^[5].

Once you've addressed tax automation and compliance, focus on how the system supports financial reporting and forecasting.

Financial Reporting and Forecasting

The next step is evaluating the system's ability to meet your financial reporting and forecasting needs.

Pre-built financial templates can save significant time. Check whether the system offers standard reports like balance sheets, income statements, and cash flow statements that align with US standards. Also, ask how flexible these templates are - can your finance team create custom reports without relying on IT?[2]

Drill-down capabilities are essential. When reviewing a summary report, you need to quickly access the underlying transactions if something looks off. During a vendor demo, ask them to show how easily you can navigate from a summary figure to detailed data. If it takes more than a few clicks, the system could slow your team down.

Real-time reporting is another critical feature. Reports based on current data allow for faster decision-making compared to batch reporting, which often generates overnight. For companies growing quickly, waiting until the next day for updated reports isn't an option[2].

Integrated forecasting tools can streamline budget planning, variance analysis, and scenario modeling, eliminating the need for external spreadsheets. Check if the system allows you to compare actual results to budgets and forecasts easily. Can you model different scenarios - like best case, worst case, or most likely - without complex spreadsheet work?^[3]

Automated report distribution is another time-saver. Ask if the system can generate reports in multiple formats - such as PDFs for presentations, Excel for in-depth analysis, and interactive dashboards for daily monitoring - and distribute them to stakeholders on a set schedule^[3].

If your business deals with revenue recognition under ASC 606, the system must be able to handle this complexity. Ask if it can automatically recognize revenue based on performance obligations and contract terms. Also, find out how it handles contract modifications, returns, and refunds. Request examples of how the system has managed complex revenue scenarios for companies in your industry^[4].

Finally, budgeting features should align with your planning process, whether you use bottom-up budgeting (where departments create budgets that roll up to the company level) or top-down budgeting (where corporate targets are allocated to departments). Ask if the system includes variance analysis tools that automatically highlight significant differences between actual results and budgeted figures[2].

Implementation, Training, and Support

Implementation Process and Timeline

When evaluating ERP vendors, it’s critical to understand their deployment process and timeline to ensure it fits your organization’s needs. Vendors typically rely on waterfall, agile, or hybrid methodologies. Waterfall offers a structured, predictable approach, while agile allows for iterative adjustments as the project progresses^[9].

Ask for a detailed timeline broken down into clear phases: discovery and requirements gathering, system configuration, data migration, testing, training, and go-live support^[7]. Most mid-market ERP implementations take between 6 to 18 months, though this can vary depending on factors like the number of modules, system complexity, historical data volume, and customization needs^[7][8]. To avoid surprises, request examples of past projects, comparing actual timelines to initial estimates for implementations similar to yours.

It’s also a good idea to speak directly with the project lead overseeing your deployment^[8]. Ask about their industry experience and how they’ve handled challenges in similar projects. If the vendor works with third-party implementation partners, ensure their credentials and stability. Questions to ask include: How long have they been working with this ERP product? How many customers do they support? What’s their staff turnover rate? Frequent turnover among consultants can lead to delays and inconsistencies^[8].

Discuss the cost structure of the implementation. Some partners offer fixed-price quotes, which provide budget clarity but may limit flexibility. Others use time-and-material billing or recurring service models, which allow for adaptability but can lead to cost overruns^[8]. Also, clarify how the vendor handles delays or scope changes. A solid contingency plan for unexpected challenges can save you headaches later.

Once the implementation plan is clear, shift your focus to how your team will adapt to the new system.

Training and Change Management

Effective training and change management are vital for a successful ERP rollout. A robust training program should include instructor-led sessions, online courses, detailed documentation, and hands-on workshops tailored to specific user roles. For example, executives may need training on dashboards and reporting, while accounts payable staff will require detailed guidance on transaction processing. Consider train-the-trainer programs to prepare internal staff for ongoing user support[2].

Timing is everything when it comes to training. If it happens too early, users may forget what they’ve learned by the time they need to apply it. Late training, on the other hand, can leave users unprepared when the system goes live. Ask whether the vendor offers post-go-live training refreshers to help reinforce key concepts after users gain initial experience with the system.

Inquire about the resources provided to support ongoing learning. These might include knowledge bases, video tutorials, in-system help features, or searchable documentation[2]. These tools empower users to troubleshoot independently when they encounter unfamiliar tasks.

Change management is another crucial aspect to address. Ask vendors how they plan to help your organization adapt to the new system. Do they assist in communicating the reasons for the change to employees? Do they offer strategies for identifying and addressing resistance? Additionally, do they provide guidance on updating business processes to align with the new system[2]?

Finally, determine how the vendor measures training success. Do they track completion rates, conduct proficiency assessments, or monitor adoption metrics? Vendors with well-established training programs often have data showing how their approach improves user adoption.

Be sure to confirm whether training is included in your license fee or if it’s an additional expense. Some vendors bundle training with implementation, while others charge per session or user.

Post-Implementation Support

Post-go-live support is essential for maintaining system performance and addressing any issues that arise. Verify the vendor’s support availability - 24/7 support is often ideal for critical operations. Look for documented response time commitments, such as 1 to 2 hours for critical issues and 24 to 48 hours for non-critical ones. Critical issues, like payroll disruptions or delays in financial closings, require immediate attention^[3][6].

Ask if the vendor provides a dedicated account manager as your primary point of contact^[7]. This person can escalate issues more efficiently since they’ll already understand your system configuration and business needs.

Clarify the pricing structure for support. Is it included in your license fee, or is there an extra charge? Some vendors offer basic support as part of the package but charge additional fees for premium options, such as faster response times or dedicated resources^[6].

Find out how long the vendor provides intensive post-go-live support. Many offer a stabilization period of 30 to 90 days, during which they allocate extra resources to address issues promptly^[7]. Some vendors also include a hypercare phase, where they focus on resolving critical issues immediately after go-live^[7].

Ask how the vendor monitors system performance and user issues during this period. Do they conduct regular check-ins to identify and resolve problems proactively? Also, learn how they transition from intensive support to standard ongoing support.

Lastly, discuss the vendor’s upgrade and update process. How often are updates released? Are they mandatory or optional^[10]? Do updates typically require downtime? Confirm whether they provide sandbox environments for testing updates before applying them to your live system^[8]. Understanding these details ensures your system stays current without disrupting your operations.

Technical Architecture and Scalability

Deployment and Integration Options

Choosing between cloud-based and on-premise ERP deployment can have a big impact on your financial operations. Cloud systems are known for their flexibility, automatic updates, and reduced IT infrastructure costs, making them a great choice for businesses aiming to scale without heavy upfront investments. On the other hand, on-premise solutions offer more control over data and customization but come with higher initial costs and ongoing maintenance requirements.

For financial operations, cloud deployments are generally quicker, taking about 3 to 6 months to implement compared to the 6 to 12 months often needed for on-premise systems. However, if your industry has strict compliance needs or handles highly regulated transactions, the tighter control provided by on-premise systems could be essential.

When evaluating deployment options, ask vendors about their system's ability to handle peak transaction loads. For instance, during month-end closings, your team might process thousands of transactions - does the system have auto-scaling capabilities to manage this? Also, request benchmarks on how many users and transactions the system can handle simultaneously.

Integration is another key factor. Confirm whether the ERP offers RESTful APIs, SOAP protocols, or pre-built connectors for commonly used financial tools like accounting software, payment processors, and banking systems. Real-time data synchronization is critical for accurate financial reporting, so ensure the ERP supports this feature. Request API documentation and ask about rate limits, webhook functionality, and sandbox access for testing. If your business relies on specialized accounts payable or receivable systems, verify that the ERP integrates seamlessly to avoid manual data entry.

Data Migration and Security

Data migration is often one of the riskiest parts of ERP implementation. It's important to have a detailed migration plan that includes timelines, data validation steps, and rollback options. Ask vendors how they plan to transfer historical financial records, account balances, and transaction histories while ensuring data accuracy and maintaining audit trails.

Security during migration is critical. Look for encryption standards like AES-256 for data in transit. Ask vendors if they perform data reconciliation after migration and how they address discrepancies between the source and the destination data.

For financial operations, preserving General Ledger integrity is non-negotiable. Ensure the ERP has processes to classify transactions correctly and maintain the audit trails needed for financial reporting and tax compliance. Verify whether test migrations are conducted before the actual cutover and if the original data will be securely archived for a specified period.

Beyond migration, ongoing security measures are equally important. Ask how data at rest is protected, where backups are stored, and whether they are geographically redundant to prevent data loss during regional outages. For disaster recovery, inquire about Recovery Time Objective (RTO) and Recovery Point Objective (RPO). For financial data, an RTO measured in hours and an RPO under one hour are ideal. Additionally, confirm the backup frequency, retention period for compliance, and whether the vendor has successfully tested their disaster recovery plans.

Finally, ensure you retain control of your data. Ask if you can export your data at any time and in what formats, so you're not locked into the vendor's system.

Scalability and Customization

Your ERP system should grow alongside your business. Request performance benchmarks to understand how the system handles increased transaction volumes and user growth. For example, ask about database size limitations, the number of concurrent users it supports, and how performance holds up during a 300% increase in transaction volume. Look for a Service Level Agreement (SLA) that guarantees at least 99.9% availability and provides clear response times.

Performance is key for financial tasks like closing books or generating reports. Ask if the ERP includes tools to monitor performance and alert you to potential bottlenecks. Check whether performance tuning services are available in case of slowdowns.

Customization plays a big role in the total cost of ownership. It's essential to distinguish between configuration (adjusting built-in settings) and customization (modifying code). Configurations are usually easier to manage and maintain, while extensive customizations can lead to higher costs and complications during future upgrades. Ask if the system includes low-code or no-code tools for customization, or if custom coding will be required. Keep in mind that customizations can increase implementation costs by 20% to 40% and add ongoing maintenance expenses.

Request examples of financial customizations, such as specialized revenue recognition processes or unique reporting formats, and find out if these are available as standard configurations. Also, look into the vendor's process for managing customizations during updates. Ask how often updates occur, whether they are mandatory, and how they handle security patches. For financial systems, ensure updates won't disrupt critical operations like month-end or year-end closing.

At Phoenix Strategy Group, we know how crucial a solid technical foundation is for protecting your financial data and supporting your business as it grows. This technical analysis is designed to align with your financial goals and prepare you for the next step: evaluating cost transparency and contract terms in your ERP selection.

Cost Transparency and Contract Terms

Upfront and Recurring Costs

When evaluating the total cost of ownership (TCO) for an ERP system, it's essential to account for every expense. This includes licensing, implementation, training, support, customization, data migration, and any required hardware costs[2]. Don’t overlook indirect costs like employee time, productivity losses, and consultant fees, as these can add up quickly.

Ask vendors for a detailed, itemized cost breakdown covering 3–5 years. This should include all categories - licensing, implementation, training, support, customization, and data migration - broken down annually to give you a clear view of the financial impact and help forecast ROI[2].

Licensing fees can vary depending on the pricing model. Vendors typically offer three main options:

• Per-user licensing: Costs increase as more users are added.
• Consumption-based pricing: Charges depend on usage levels.
• Concurrent user licensing: A fixed number of simultaneous users are allowed^[8].

Make sure to clarify what’s included in the base price, such as training hours, delivery methods, ongoing support, and any additional post-go-live assistance that could affect ROI. These details are critical for negotiating vendor commitments and reviewing contract terms.

Contract Flexibility and Renewal Terms

Flexibility in contracts is key to protecting your business from vendor lock-in. Ask about the contract length, renewal conditions, exit clauses, and options for renegotiation if your needs or service level agreements (SLAs) change over time^[8].

Another vital aspect is data ownership. Understand what happens to your data if you switch vendors. Ensure the vendor provides clear options for data export or API access so you maintain full control over your business information. Also, clarify any penalties for early termination and how those fees are calculated.

Consider negotiating a trial period or proof-of-concept (POC) before committing to a full-scale implementation^[5]. SLAs are another critical area to address. These agreements define the vendor’s commitment to system uptime and support quality. For instance, many vendors guarantee 99.9% availability or higher^[3]. Ask about remedies like service credits or refunds if these targets aren’t met. Clarify which support services are included in the base license fee and which require additional payment. Also, inquire about support tiers (e.g., standard, premium, 24/7 support) to better understand your options.

Hidden Costs and Pricing Models

Hidden costs can quickly derail your budget, so it’s vital to identify them upfront. Start by asking if any add-ons or third-party integrations are required and who owns the code for these customizations^[8]. Determine what level of customization is needed to align the ERP with your business processes and how those costs are structured^[8].

Be sure to ask about potential charges for data migration, integration, API access, or additional training. Costs associated with system upgrades, patches, or new features should also be clarified. Find out if support and maintenance fees increase annually and whether there are extra charges for hosting, cloud infrastructure, or data storage in cloud-based solutions.

Implementation partners and system integrators can also add to overall costs. Ask how these partners price their services - whether through fixed-quote pricing, time-and-material billing, or a recurring subscription model^[8]. It’s also worth investigating their track record. Ask how long they’ve been in business, the number of customers they’ve supported for this ERP product, and their employee attrition rate over the last five years. These factors can significantly impact project continuity and quality^[8]. Speaking directly with the project lead can also help you assess their commitment and ensure a good working relationship.

Vendor pricing history is another area to explore. Ask how much their prices have increased over the last five years and whether they offer pricing locks for 3–5 years to protect against unexpected hikes^[8]. Monthly payment options can also be helpful for managing cash flow, especially during the implementation phase. Additionally, inquire about license audit procedures - what triggers an audit and how adjustments are handled if your user count changes - to avoid surprise compliance costs.

Finally, evaluate whether the vendor’s pricing model aligns with your growth plans. Ask how costs will scale if you add more users, increase transaction volumes, or expand into new regions. Request a cost projection for the next 5–7 years based on realistic growth scenarios, and check if volume discounts or enterprise pricing options are available^[8]. This forward-looking approach ensures your ERP investment remains manageable as your business evolves.

At Phoenix Strategy Group, we specialize in helping growth-stage companies make informed financial decisions, including ERP selection and implementation. Our fractional CFO services and financial planning expertise provide a clear picture of costs, ensuring you can evaluate vendor stability and long-term value with confidence.

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Vendor Stability and Future Outlook

Vendor Financial Health and Reputation

When choosing an ERP vendor, you're not just selecting software; you're entering into a long-term partnership. Beyond features and pricing, the financial stability of the vendor plays a critical role in ensuring your investment remains secure. A financially unstable vendor can lead to issues like discontinued support, abandoned products, or forced migrations that disrupt your business operations^[1].

To gauge a vendor's financial health, review their revenue growth over the past 3–5 years, profitability margins, cash flow consistency, market share, and customer retention rates (aim for above 90%)^[1][2]^[4]. For publicly traded vendors, dive into SEC filings and analyst reports. For private vendors, ask for details about their funding sources and investor backing. Warning signs like declining revenue, high customer churn, or leadership turnover may indicate potential risks down the road^[1][2]^[4].

Another key step is researching the vendor's reputation. Check independent review platforms like G2, Capterra, or Gartner for customer feedback. Consistently positive reviews across these sources suggest reliability, while a trend of negative feedback or shrinking customer numbers should raise concerns.

It’s also worth asking about the stability of the vendor’s leadership team. A steady executive team often reflects organizational stability. Ensure their support and implementation teams are well-staffed to avoid delays. Finally, confirm they have experience in your industry and understand the specific challenges you face^[4].

Once you've assessed the vendor's stability, it's time to evaluate their future vision, starting with their product roadmap.

Product Roadmap and Updates

A vendor's product roadmap offers a glimpse into their priorities - whether they’re focused on innovation or simply maintaining the status quo. Your ERP system needs to grow with your business, and the vendor should demonstrate a clear plan for adapting to market trends and regulatory changes. Request a 3–5 year roadmap that outlines planned features and updates to see how they align with your future needs^[3].

Ask pointed questions about their investment in emerging technologies. For example, are they incorporating artificial intelligence for forecasting? Are they developing tools for real-time financial analytics or automating compliance reporting? A vendor’s technology strategy should align with your evolving financial requirements.

Also, investigate their update cycle. How often are updates released, and is the schedule predictable? Vendors that prioritize customer feedback and integrate feature requests tend to deliver more meaningful improvements over time^[3].

Security is another critical area. Ask how quickly they address vulnerabilities and whether security measures are included in their standard support package. Reviewing their history of product updates can also reveal their consistency and commitment.

Don’t overlook the vendor’s support lifecycle. Understand how long each software version is supported, their end-of-life policies, and what happens to your data if the product is discontinued. Vendors without a clear development vision or who appear to have stalled their progress may leave you stuck with an outdated system^[3].

References and Customer Success Stories

Direct customer feedback is invaluable when evaluating vendors. Request 3–5 references from companies similar to yours in size, industry, or operational complexity. Speaking with current customers provides insights that go beyond sales pitches^[3][4].

During these conversations, ask practical questions: Did the project stay on schedule and within budget? Was the training effective? Is the vendor responsive to support requests? Does the system meet their financial reporting needs? Dive into any challenges they faced and how the vendor resolved them. Most importantly, ask whether they would choose the same vendor again, knowing what they know now.

Case studies can also be helpful, but focus on those with concrete outcomes. Look for examples of measurable results, such as reduced time in financial close processes, improved reporting accuracy, or cost savings. Avoid generic case studies with vague claims - they don’t provide the evidence you need to make an informed decision^[3][4].

Explore the vendor’s customer success program. Do they assign dedicated account managers? Conduct regular business reviews? Proactively help customers achieve their goals? Vendors who invest in customer success are more likely to provide strong ongoing support. Additionally, ask about customer communities or user groups. Active communities can be a great resource for troubleshooting and sharing best practices.

Finally, look for patterns in the feedback you gather. Consistent praise across multiple references is a strong indicator of reliability, while mixed reviews or reluctance to provide references could signal potential issues^[3][4].

At Phoenix Strategy Group, we specialize in helping growth-stage companies navigate the complexities of ERP evaluations. Through our fractional CFO services and strategic financial expertise, we’ve worked with businesses across various stages of growth. This experience allows us to identify vendors that deliver on their promises - and those that might fall short. Whether you need help assessing vendor stability, evaluating product roadmaps, or conducting reference checks, we’re here to guide you toward a sound long-term investment.

Conclusion

Key Takeaways from the Checklist

Choosing the right ERP vendor is a critical step in safeguarding your financial operations and preparing your business for growth. This checklist highlights five essential areas to focus on, ensuring your ERP investment delivers real value.

Business requirements and functional fit should always come first. Your ERP system needs to align with your financial needs without requiring excessive customization. If a vendor can’t clearly demonstrate how their solution addresses your specific requirements straight out of the box, you’re likely looking at additional costs and delays during implementation[2]^[3].

Total cost of ownership (TCO) goes far beyond the initial licensing fee. Expenses like implementation services, training, data migration, infrastructure upgrades, and ongoing support fees can add up quickly. Be sure to clarify the vendor’s pricing model and request a detailed three-year TCO projection that accounts for factors like user growth and increased transaction volumes[2].

Vendor stability and product roadmap are crucial for long-term success. Look into the vendor’s financial health, including revenue growth, profit margins, and customer retention rates (aim for over 90%)^[1][4]. Ask for their 3-5 year product roadmap to confirm they’re investing in advancements like AI-driven forecasting and real-time analytics^[3]. A vendor lacking a clear vision could leave you with outdated software down the line.

Implementation support and change management play a huge role in staying on schedule and within budget. Investigate the vendor’s training methods, post-implementation support, and how quickly they resolve critical issues^[3]. Reach out to references from companies that have implemented the solution in the past 12-24 months to get a sense of the vendor’s current capabilities.

Contract terms and service level agreements (SLAs) set the foundation for accountability. Make sure the contract clearly defines terms like uptime guarantees, response times, and remedies for service failures^[3]. Also, confirm data ownership terms and ensure you’ll have access to your data when needed^[8].

These key points provide a roadmap for evaluating vendors in a structured, thorough manner.

Next Steps for Vendor Evaluation

With these considerations in mind, structure your vendor evaluation to ensure an objective comparison. Use a comparison matrix to assess core features, pricing, implementation timelines, and support offerings[2]. This approach prevents vendors from focusing solely on their strengths while glossing over potential gaps in their capabilities.

Assign weights to each evaluation category based on your priorities. For instance, financial functionality might account for 30%, implementation support for 25%, cost for 20%, scalability for 15%, and vendor stability for 10%[2]. Involve key stakeholders in the scoring process, document all vendor responses, and reconcile any discrepancies to reach a consensus[2].

When checking references, focus on companies similar to yours. Ask about their experiences with schedule adherence, budget management, training quality, and vendor responsiveness^[3]. Pay close attention to how the vendor handled challenges during implementation - this will give you insight into their problem-solving skills and commitment to customer success^[3].

Before finalizing your decision, conduct a thorough legal and commercial review of the contract. Ensure all terms align with your negotiated agreements, and verify that SLAs include clear expectations for uptime, response times, and remedies for service failures^[3]. Secure formal approvals from finance leadership, IT leadership, and your executive sponsor to ensure everyone is aligned.

Phoenix Strategy Group specializes in guiding growth-stage companies through ERP evaluations. From assessing vendor stability and product roadmaps to conducting reference checks, we’re here to help you make a sound, long-term investment in your business’s future. Reach out if you need expert support in navigating this critical decision.

The Ultimate Guide to ERP Vendor Selection Evaluation Criteria & Security #saas #erp #guide

FAQs

What’s the difference between cloud-based and on-premise ERP systems, and how do I choose the right one for my business?

The key difference between cloud-based ERP and on-premise ERP systems comes down to where the software is hosted and how you access it. Cloud-based ERP operates on remote servers and is accessed through the internet, offering perks like easier access, automatic updates, and lower upfront costs. On the flip side, on-premise ERP is installed on your company’s own servers, giving you greater control but often requiring a bigger initial investment and ongoing maintenance.

When choosing between the two, think about your budget, IT infrastructure, and how much scalability you’ll need. If easy access, reduced IT management, and predictable subscription fees are important to you, cloud-based ERP might be the way to go. However, if your priorities include tighter control over data, more customization options, or meeting strict regulatory requirements, an on-premise ERP system could be a better match. Carefully weighing your business needs and long-term goals will help you make the right call.

How can I make sure the ERP vendor I choose will provide reliable support and updates over time?

To gauge whether an ERP vendor is dependable and committed to supporting your business in the long run, consider asking these key questions:

• What is their financial stability and track record? Vendors with strong financial health are more likely to remain operational and consistently support their product over time.
• What updates and improvements are planned for the future? A clear roadmap demonstrates their dedication to adapting and meeting your evolving business needs.
• What support options and service guarantees do they offer? Check for detailed service-level agreements (SLAs) and responsive customer support to ensure reliable assistance.
• How do they handle data security and compliance? Safeguarding sensitive financial information is non-negotiable, so their approach to security should be robust and compliant with relevant regulations.
• What is their customer retention rate? High retention rates often indicate satisfied customers and dependable service.

Collaborating with experienced professionals, like Phoenix Strategy Group, can help you thoroughly assess ERP vendors and ensure the solution aligns with your financial and business objectives.

How can I evaluate the total cost of ownership for an ERP system and avoid unexpected expenses?

When evaluating the total cost of ownership (TCO) for an ERP system, it's essential to factor in both initial investments and ongoing costs. The upfront expenses usually cover licensing fees, implementation, and training. Meanwhile, the long-term costs can include subscription renewals, system maintenance, upgrades, and support.

To steer clear of unexpected charges, make sure to ask vendors about potential fees for additional users, customizations, integrations, or scaling the system in the future. Also, review contract terms carefully - look for details about cancellation policies or penalties for exceeding usage limits. Understanding the full pricing structure upfront can help you avoid unpleasant surprises later.

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