ERP Selection: Process, Criteria and Example Timeline
Published on October 8, 2026 in RFP Guides
ERP selection means choosing an enterprise resource planning (ERP) system, and the firm that will implement it, before you sign anything. This guide covers when to replace an ERP, the team, the process, criteria, costs and an example timeline. It follows the same steps as RFPhub’s free ERP RFP template.
Signs it’s time to replace your ERP
Replacing an ERP is expensive and disruptive, so be sure you need to. Common signs:
- Month-end close depends on spreadsheets and reconciliations done outside the system.
- The same data is keyed into several systems, and nobody trusts the inventory figures.
- The business has outgrown it: new entities, currencies, countries or warehouses, or a new way of selling, such as subscriptions.
- Your version is out of support, or customizations turn every upgrade into a project.
- Auditors keep raising findings about user access or segregation of duties.
Check the cause first. If the product still fits and the trouble is an old version or heavy customization, an upgrade or re-implementation may cost less. A new ERP won’t fix a process nobody has agreed on.
Who should be on the selection team
An ERP touches most of the business, so the team should too:
- An executive sponsor to approve the budget and settle disagreements between departments.
- A project lead who runs the selection and stays on through implementation.
- Finance (the controller or equivalent), operations, and sales and customer service.
- IT for integration, security and data, plus procurement and legal for the RFP and contract.
- End users from each area, who should attend demos and score ease of use on their own tasks.
Ask internal audit to review the access-control requirements. The RFP process guide sets out what each role owns.
Document your processes, then write requirements
Every vendor will show you how its product works. Know how your business works first, or every demo will look like a fit.
Map each core process as it runs today (record to report, procure to pay, order to cash and, if you make products, plan to produce), noting where it breaks. Then sketch how the work should flow, without rebuilding today’s workarounds. Set the first go-live scope (entities, sites and modules), and record the numbers vendors price against: users by type, entities, countries, items, and monthly order and invoice volumes.
Turn the maps into requirements marked must-have or nice-to-have, keeping the must-haves few. Ask for a response code on every line: standard, configuration, custom, third party, roadmap or not available. The line between configuration and custom matters most, because custom code has to be maintained and retested through every update. How to Write an RFP shows how to word requirements, and the ERP RFP template has paste-ready lines.
Deployment options and what each changes
Decide early which models you’ll accept, because each changes who runs the system, how updates arrive and how you pay.
| Model | Who runs it | What it changes for you |
|---|---|---|
| Vendor-hosted SaaS (multi-tenant) | The vendor, on infrastructure shared across customers, with each customer’s data kept separate | You pay a subscription. Updates arrive on the vendor’s schedule, so ask whether you can defer one. Changes use the vendor’s extension tools rather than edits to the core code. |
| Hosted (single-tenant) | Your own instance in a data center or cloud, run by the vendor, a partner or your IT team | You may get more say over update timing, but someone must plan and test each upgrade. Get responsibility for backups and recovery in writing. |
| On-premises | Your IT team, on your own servers | You own the hardware, backups, security and upgrades. Pricing may be a license with annual maintenance or a subscription. |
Whichever you choose, ask where your data and backups will be stored. If the vendor or a partner runs any of it, ask for independent audit reports on its controls, such as SOC 1 and SOC 2 reports. Your auditors may want the SOC 1, which covers controls relevant to financial reporting.
The software vendor and the implementation partner
ERP vendors sell and implement directly, through partners (often called systems integrators), or both, so the software maker and the implementer are often different firms. The partner’s team configures the system, migrates your data and trains your staff, so it has a large effect on cost, timeline and how well the system fits. Choose it as carefully as the product.
You can ask each vendor for one joint proposal with its partner, as the ERP RFP template assumes. Or you can choose the software first, then run a second, shorter RFP for implementation, which takes longer but lets that product’s partners compete.
Either way, ask for a named team with time allocations, and a commitment that key people won’t be replaced without your approval. Ask what the vendor will do if the project runs into trouble. Interview the partner separately and score it as its own criterion.
The ERP selection process, step by step
- Market scan. Build a long list from peers, industry groups, review sites and existing suppliers.
- RFI, if needed. If the long list has more than five products, or you’re unsure which fit, send a short request for information first. See What is an RFI? and the RFI template.
- Shortlist. Three to five vendors is a workable size for the RFP.
- RFP. Tailor the ERP RFP template with your process maps, volumes and integration list, and ask for joint responses. Score independently against weights set in advance, and pick two or three finalists.
- Scripted demos with your own data. Give every finalist the same scripts and data: real items, a customer order, a supplier invoice with a price variance and a month-end task. Require the proposed implementation team to attend.
- Reference calls. Ask for customers of similar size and industry, including one implemented by the same partner team. The vendor selection guide covers checks beyond the vendor’s own list.
- Proof of concept. Run one where a demo can’t prove a requirement that matters, such as an integration with your warehouse system or a material requirements planning (MRP) run at your volumes. The POC template sets success criteria before work starts.
- Total cost of ownership. Compare every finalist over the same term (see below).
- Negotiation. Negotiate the subscription and the implementation statement of work together, because each affects the other. Settle renewal caps, key-person terms, milestone acceptance criteria and exit terms before you sign, using the SOW template for structure.
Public agencies and grant-funded organizations may have rules on advertising and evaluation, which vary by jurisdiction, so check with your procurement office.
Example ERP selection timeline
The ERP RFP template’s example schedule runs about 22 weeks from kickoff to signed contracts. Allow more if you have many entities, countries or plants, or if your processes aren’t documented yet.
| Weeks | Step | What you have at the end |
|---|---|---|
| 1-4 | Map processes, set scope, assemble the team | Process maps, go-live scope and volumes |
| 4-6 | Decide how to involve implementation partners; RFI if needed | A shortlist of three to five vendors |
| 6-10 | Tailor and issue the RFP; four weeks to respond, with written questions in the first two | Joint software and implementation proposals |
| 10-12 | Score independently and shortlist | Two or three finalists |
| 12-18 | Scripted demos, partner interviews, reference calls | A preferred vendor and partner, and a runner-up |
| 18-22 | Negotiate software and services together, then award | Signed contracts |
There are no separate weeks for a proof of concept, so fit one into the demo phase or add time. Implementation is planned separately.
ERP selection criteria
Agree criteria and weights before proposals arrive. This table follows the ERP RFP template’s rubric, whose weights are an example starting point.
| Criterion | Example weight | What to look for | How to check it |
|---|---|---|---|
| Finance functionality | 20% | Ledger, payables, receivables, multiple entities, close and reporting as standard | Scripted demo with your data, through intercompany and consolidation |
| Operations functionality | 20% | Procurement, inventory, order to cash, and manufacturing or distribution | Your scripts run end to end with your items and orders, with little custom code |
| Technology, extensibility and updates | 10% | Extensions that survive updates, a predictable release schedule, enough sandboxes | How a recent update that changed existing behavior was handled |
| Integration and data | 10% | A connector or documented API for each system, bank and tax integration, migration tools | For each integration: vendor-built, partner-built or custom, and who maintains it |
| Security and controls | 5% | Role-based security, segregation-of-duties reporting, a complete audit trail | SOC 1 and SOC 2 reports under NDA; a demo of conflicting-permission reporting |
| Implementation partner, plan and team | 20% | A named, experienced team and a plan with stated assumptions | A separate partner interview; a reference from the same partner team |
| Commercials and five-year total cost | 15% | Transparent pricing, a renewal cap, a ramp during implementation, fair exit terms | Every vendor’s pricing on your form, same scope and term |
Score each criterion on a defined 1-to-5 scale, multiply by its weight and add the results. RFP Scoring Matrix and Evaluation Criteria covers scoring in full, including price.
Total cost of ownership
The subscription is only part of what an ERP costs. Have every vendor price the same scope and term on your form (the ERP RFP template uses five years), and estimate the costs that fall on you.
| Cost item | What to include |
|---|---|
| Subscriptions or licenses | Price by module and user type, renewal increases, and additions mid-term |
| Implementation | Fees by phase, fixed fee or time and materials, and how change requests are priced |
| Data migration | Extracting, cleaning, mapping and loading data, mock loads, and who does each |
| Integrations and customization | Building connectors and extensions, API and EDI fees, and retesting through every update |
| Training | End users, administrators and train-the-trainer materials |
| Internal staff time | People assigned to the project, and backfill for their day jobs |
| Support and upgrades | Support after hypercare; release testing for SaaS, or upgrade projects and servers for hosted and on-premises |
Add sandboxes, storage, add-ons and exit costs. If one implementation estimate is far below the rest, check its assumptions before treating it as cheaper.
Common ERP selection mistakes
- Treating the partner as an afterthought. Its team builds the system you’ll run for years.
- Letting vendors run their standard demo instead of your scripts and data.
- Rebuilding old workarounds as custom code you’ll maintain through every update.
- Underestimating internal effort. Finance and operations experts are needed for demos, testing and migration, on top of their day jobs.
- Signing before the SOW is finished. Gaps in it can come back as paid change requests.
Start your selection with the free ERP RFP template, or browse the ERP and finance RFP templates for related systems.
Frequently asked questions
What is ERP selection?
ERP selection is choosing an enterprise resource planning system, and usually the partner that will implement it, before you sign a contract. It covers process mapping, requirements, an RFP, scripted demos, reference calls and negotiating the software and services together.
What are the most important ERP selection criteria?
Common criteria are finance and operations functionality, technology and updates, integration and data, security and controls, the implementation partner and team, and total cost. Agree the weights before proposals arrive, with the most weight on what would sink the project if you got it wrong.
How long does ERP selection take?
The example schedule in RFPhub’s ERP RFP template runs about 22 weeks from kickoff to signed contracts. Allow more for many entities, countries or plants, or undocumented processes. Implementation comes after and is planned separately.
Should you choose the ERP software or the implementation partner first?
Either can work. A joint proposal from each vendor with a named partner lets you compare software and services together, as the ERP RFP template assumes. Choosing the software first, then running a second RFP for implementation, takes longer but lets that product’s partners compete.