ERP Evaluation Document – Essential for your next ERP

How to build ERP Evaluation Document
to your rate an ERP?

How to you evaluate an ERP?

What do you need to do to make sure you choose the best system?

To evaluate correctly each vendor you’re going to meet, you need to build an ERP evaluation document.

Why build an ERP Evaluation Document

Yes, it will take you a bit of time to build the ERP evaluation document. But the benefits are so worth it! It will help you:

  • objectively rate every ERP you see
  • make sure you don’t forget anything important
  • choose the ERP with the best ROI
  • increase employees’ satisfaction with the software

How to build an ERP evaluation document

The business analysis you did previously comes very handy here! You’re going to build the evaluation document with the needs & processes found earlier.

No guesswork. No feeling. Just plain old logic!

Now it’s time to review the requirements found earlier and create a checklist (do it in Excel).

1 – List the needs by department

By department, list everything the ERP must do. For example:

  • Manage multiple manufacturing lines
  • Manage the inventory in FIFO & LIFO
  • Automatically replenish stock according to current consumption and inventory levels
  • Automatically create and send POs to suppliers when inventory levels are low

List everything, small and little. And I mean everything!

You’ll see, it will be a long list. It does take time, but it’ll allow you to easily evaluate the ERP and make sure you don’t forget anything.

2 -What’s essential, what’s not?

There are requirements that are going to be essential and others that are just nice-to-have.

No ERP will answer all your needs, so you need to rate them to have an objective score at the end.

Core features – What’s essential?

The core features are the ones that are essential to run your business.

You absolutely need those in the business software you purchase. An ERP has to answer those needs.

Examples of core features
  • Create & send a PO
  • Manage inventory in LIFO
  • Manage Shipping & Receiving
  • Manage patients’ scheduling
  • Save X-Rays in systems & easily access them

All lot of things are required for the activities of a business. Does it mean your future ERP will necessarily answer all? Maybe not.

You might have to find a workaround for one or two… but if one ERP answers everything while others don’t, it’s going to make your choice much easier!

3 – Secondary features – Nice-to-Have

A secondary feature is a ‘nice-to-have’. You’ll still be able to run your business without them, but you might have to find a workaround.

You’ll see that with every ERP, you’ll have to give up some features. These are the ones where you’ll want to compromise. You still want your ERP to answer most, but it won’t be every of them.

Examples of secondary features
  • An alert is automatically sent to accounting when a client has reached its credit limit.
  • The salesmen can see all the past interactions with a client on their phone.
  • The system automatically optimizes the shipments to reduce shipping costs.

You’ll see the real value of an ERP in those nice-to-have. All ERP will allow you to create a PO, but not all will remind you automatically when there’s an issue with the items received.

Those ‘little’ things quickly add up. It will increase efficiency and employees’ satisfaction.

More importantly, it shows the quality of the vendors’ team. Do they really know what they’re doing? Are they able to build a software that goes beyond the obvious? Do they really care about their customer?

4 – Reports & Dashboards

Reporting is sometimes overlooked when evaluating a program. While it’s not as important as the core and secondary features, it still the way users are able to work with the data and make good decisions.

The information an ERP provides is very valuable.  Make sure it’s easy to process for employees.

The reporting module should provide a way for users to easily create new reports and customize existing one. Ideally, the reporting module should allow a very wide range of customization tools to the employees.

The need for information is never-ending and the more the employees will use the system, the better they’ll be in using the data. Give them the option.

Example of reporting needs
  • A dashboard shows the inventory levels in real-time
  • Dashboards & reports are easily customized
  • Must be able to connect the data to Excel to create pivot tables

Give a score to each & every requirement

Now go again through the list and rate everything from 1 to 5, from less important to the most important stuff.

We’ll use this to compare and evaluate the ERP software.

No ERP software will answer all your needs. By rating them like that, it’ll be easier to decide which software is the best.

This way, you’ll make sure that you get the best one for your needs and don’t fall into the trap of buying an ERP because it looks good or the vendor is a good salesman.

What’s next?

Great, now you have a complete ERP evaluation document that you can use to select the best ERP for your company!


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