6 Costly ERP Selection Mistakes
So. Many. Choices! Choosing the right ERP software can feel overwhelming – especially with all the options now available. The wrong choice can have serious consequences: 60% of ERP implementations go over budget, and more than half fail to deliver in the first year.
To help lessen the burden and help you avoid common pitfalls, here’s what to watch out for.
Chasing Big Brand Names
Just because an ERP system is well-known doesn’t mean it’s the best choice for your business. Names like Dynamics 365 Business Central, Sage, or QuickBooks come with credibility, but what really matters is how well the software fits your unique needs.
Many ERP systems are modular and customizable, meaning the best option depends on:
- How well it supports your operations (finance, inventory, HR, customer service)
- Whether it solves your specific pain points
- How easily it integrates with existing tools
✔ What to do instead: Identify must-have features first, then evaluate ERP solutions against this list.
Letting One Department Decide
ERP software impacts your entire business - not just IT. Finance needs budgeting and reporting tools; operations rely on supply chain management; and HR requires payroll and employee data integration. Yet too often, ERP selection is left solely to the tech team.
✔ What to do instead: Form a cross-departmental team to evaluate ERP options and ensure every stakeholder’s needs are considered.
Focusing Only on Cost
ERP implementation isn’t cheap. But, picking the lowest-cost option often leads to higher expenses later on. Choosing an ERP based purely on price can mean hidden costs for upgrades and integrations; a system that doesn’t scale as your business grows; and paying for unused features if you go too big.
✔ What to do instead: Look at total cost of ownership over the long term. Factor in upgrades, training, and ongoing support.
Not Being Transparent with Vendors
ERP software is highly adaptable with AI, automation, and real-time analytics, but only if vendors know exactly what you need. Many companies provide limited details, leading to:
- Overestimated costs because vendors don’t have enough information
- Misalignment between software capabilities and business needs
- Customization issues after implementation
✔ What to do instead: Be upfront about your current challenges and workflows - good and bad - so your ERP provider can tailor the best solution.
Choosing an ERP Based on a Demo Alone
Demos look great, but they’re controlled environments. They won’t show you how the ERP handles real-world scenarios, whether it integrates seamlessly with your existing tools, nor the potential gaps or limitations.
✔ What to do instead: Request a sandbox environment where your team can test the software with actual business data before committing.
Skipping Industry-Specific References
No two businesses are alike, which means an ERP that works for one company may not work for yours. Failing to check references - both for the software and the implementation partner - can lead to surprises about system limitations; integration challenges; and costly mistakes from choosing an inexperienced partner.
✔ What to do instead: Ask for references from companies in your industry and of similar size. Find out how the ERP performs in real-world use cases.
Choosing the Right ERP Software Should be Simple
The best ERP solution is the one that fits your business - not just today, but long-term.
We take the guesswork out of ERP selection. Through our Business Impact Assessment, we work with you to identify the right ERP for your needs, streamline the selection process, maximize your investment and reduce risks.