Select Your ERP Requirements (Free Checklist and Template)

Spreadsheets everywhere, insights nowhere? ERPs promise to be the answer, but diving headfirst into the wrong one can create a whole new set of headaches.

That’s why choosing the right ERP software is crucial for simplifying operations and ensuring long-term success. Even the most advanced solutions can fall short without clear pain points to address. So, let’s start with the basics: locking down your ERP requirements.

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ERP Requirements Checklist

Here’s what you’ll get from this post:

• A handy checklist to ensure you don’t miss any essentials.
• Steps to create a template that captures your ERP software requirements.
• Tips from ERP experts to get the most out of your requirements-gathering process.

We’ve onboarded over 100,000 users into our software selection platform. This has given us a wealth of insights into their usage patterns based on industry, company size and user persona. By leveraging this data, we’ve identified key requirements you should consider to minimize the risk of selecting the wrong software.

Our goal is to empower you to benefit from the collective experience of your peers who’ve embarked on the same journey before you.

Create a custom ERP requirements list to find the right fit for your business needs.

Key Requirements

No matter what your company does, there’s an ERP for you. So, with all this variety, what are the essential ERP software requirements every system needs?

Here’s the good news: This is what we do. Our dedicated research team specializes in learning about software — what’s the norm, the top benefits and any deal breakers.

Let’s look at the top ERP requirements to consider:

1. Analytics and Reporting

ERP systems can collect tons of information, but if you can’t understand it, what’s the point? Kevin Miller, a digital marketing expert, says,

… While having data collection capabilities is important, making certain that your ERP software can report it in a manner that is understandable and actionable is just as critical to your success.”

Kevin MillerDigital Marketing Expert, Entrepreneur and Angel Investor

Analytics and reporting provide real-time and historical data insights across all departments, from sales figures to inventory levels. Create custom reports and dashboards that track key performance indicators (KPIs) necessary for specific business goals.

Make data-driven decisions, identify trends and optimize operations for improved efficiency and profitability.

Most folks we talk to are used to doing things with Excel. If that’s your team’s go-to tool, you’ll want an ERP system that lets you export reports straight into Excel. It’s a smooth way to blend your spreadsheets with new tech without missing a beat.

An example of SyteLine’s reporting tools.

2. Asset Management

We’ve all seen those movies where a crucial piece of equipment malfunctions at the worst possible time. Asset management tools understand this pain point.

Track the full asset lifecycle from acquisition to disposal, manage maintenance schedules, monitor depreciation and stay compliant with regulatory standards to stay on top of your game.

Kankana Kalita, Senior Research Analyst at SelectHub, adds that enterprise asset management integration also optimizes asset-related expenses:

Real-time monitoring identifies underutilized assets for redeployment, helps capture tax savings through accurate depreciation tracking, and facilitates shared visibility, which avoids unnecessary purchases.”

Kankana KalitaSenior Research Analyst, SelectHub

An example of Acumatica’s asset management dashboard. Source

• Asset Audits
• Asset Downtime Tracking
• Create and View Asset Hierarchy
• Develop Asset Profiles
• Asset QR and Barcode Assets
• Linear Asset Management
• Multi-Site Asset Management

3. Customer Relationship Management (CRM)

Next, consider CRM module capabilities. A built-in CRM helps you manage all customer or client communications with automated marketing tools, robust analytics and lead management.

This tool helps you manage the customer experience from start to end and increase retention rates and sales tools that enable users to manage sales orders across all channels.

Steve Pogson, founder of First Pier, breaks it down for us,

It’s not just about managing interactions; it’s about leveraging data from those interactions to provide personalized shopping experiences”

Steve PogsoneCommerce Marketing Specialist

With data on every customer and lead interaction, you can target your marketing like a laser, recommend products your customers will love and provide relevant support.

An example of the CRM overview page in Oracle Fusion Cloud. Source

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4. Finance and Accounting

Every company needs a firm grasp on its finances. Track every penny coming in and going out with features for accounts payable, receivable and general ledgers. Stay on top of tax regulations and filing deadlines.

As James Cunningham, Complete Health Optimization Coach at Total Shape, aptly states:

Accounting modules within ERP suites function as a one-stop shop for all of your business operations…This interconnectedness improves collaboration and data accuracy across departments, resulting in more informed decision-making.”

James CunninghamAuthor and Dietary Supplement Connoisseur, Total Shape

5. HR Management

Don’t forget the employees that make things possible.

We found mounting scientific data showing a direct link between strong employee management and retention. A recent LinkedIn report even found that 94% of employees stay for skill development opportunities.

Learning management is only one HR feature. Other HR management tools in ERPs include employee training, payroll and time tracking.

Sure, standalone HR platforms exist, but an integrated module within your ERP is like having all your HR tools in one place.

Oracle Fusion Cloud’s HR module supports hiring and onboarding. Source

• Absence Management
• Benefits Administration
• Employee Profile Centralization
• Content Builder
• Employee Engagement Surveys
• Employee Onboarding
• Employee Self-service
• Global Employee Management
• Payroll Management
• Performance Measurement
• Succession Planning
• Time-Tracking Methods

6. Inventory Management

The next module on our ERP requirements checklist is inventory management. It includes many key features that focus on one key aspect: current stock visibility.

Adding inventory management to your ERP system requirements checklist lets you know which products are on hand or en route to a customer at any given time.

Real-time notifications keep you informed on stock levels, so you know exactly when to reorder. Plus, setting minimum quantities ensures you never run dry.

Barcodes let you scan items in a flash, and linking data with your CRM tools helps you understand what’s flying off the shelves and what’s collecting dust.

NetSuite’s inventory management dashboard. Source

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7. Manufacturing

Whether you run a small job shop or a bustling enterprise, manufacturing can tackle almost any production challenge and reduce mistakes. These tools make it easier to control production, analyze quality, manage compliance and orders and address several other supply chain aspects.

As we delve further into ERP functions, here’s why manufacturing deserves a prime spot on your ERP checklist:

• Manufacturing tools automate specific supply chain processes to save time and resources.
• They free up your staff to handle higher-level tasks.
• This module also helps you pinpoint slowdowns and eliminate bottlenecks.

We recommend manufacturing ERPs if your company specializes purely in manufacturing. These ERPs are specifically designed to manage the complexities of various manufacturing models, ensuring optimal efficiency and resource allocation.

If a manufacturing ERP is more up to your speed, we’ve got resources for that, too. Our manufacturing software requirements checklist will help you get started.

Visibility ERP’s schedule advisor tool lets you manage workstations and production schedules.

8. Order Management

From handling customer inquiries to ensuring on-time deliveries, managing various orders can quickly become a snarling beast.

Order management tools can help you supervise all stages of the ordering process, from checking out to reviewing product information and distribution to the vendor or customer. These tools also make it easier to pick, pack and ship products while automatically updating quantities and processing payments.

SAP S/4HANA Cloud notifies when changes are made to the project start or end dates. Source

9. Procurement

Ever felt buried under mountains of paperwork while trying to find the best suppliers? Many businesses do (we’ve heard stories). Procurement tools, whether dedicated software or features within your ERP system, can improve supplier selection operations, reduce costs and govern vendor performance.

They also automatically create purchase orders, help you draft and allocate RFQs to suppliers, and bill vendors while processing payments.

Microsoft’s Dynamics 365 ERP lets you manage vendors and review order placements. Source

• Automatic Creation of Purchase Orders
• Vendor Contract Creations
• Request for Quotation Creations
• Creating and Submitting Purchase Requests
• Maintaining Vendor Record
• Create Purchase Orders Manually
• Multi-Subsidiary Vendors
• Three-Way Match

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10. Project Management

If your business has to track multiple long-term tasks, your ERP requirements list should include project management tools. They can help you allocate proper materials, maintain project budgets, organize assignment details, and boost team and client collaboration.

Project management tools also let you bill assignments and govern important project attributes to minimize costs and account for expenses.

The real magic lies in data integration. Since these tools live in your existing ERP system, they can pull data from every corner of your business — inventory levels, resource capacity, labor distribution and even past projects.

A preview of a project management module in Odoo.Source

11. Service Management

Service management systems (SMSs) consolidate all company management processes, including planning, objectives, policies, documentation and more.

Put this feature on your ERP requirements checklist if your priorities include crafting service requests and managing product parameters and deliveries. Additionally, it enhances preparations and links installation materials and services to projects.

Kalita also notes the specific challenges SMEs face in implementing effective service management:

SMEs often deal with fragmented data, limited resources, and insufficient product documentation, which can lead to miscommunication and inconsistent service quality. Additionally, scalability and tracking limitations can hinder visibility and growth.”

Kankana KalitaSenior Research Analyst, SelectHub

However, with ERP-backed service management, SMEs can gain a single source of truth, streamlined tracking and support for scalable processes, enabling smoother service delivery as the business grows.

Dynamics 365 lets you review appointment bookings. Source

• Appointment Booking
• Call Center Management
• Create Service Requests
• Customer Service Contracts
• Define Billing Rules
• Installation Management
• Map Route and Resource Tracking
• Technician Portal
• Warranty Management

12. Supply Chain Management (SCM)

Ever been frustrated by a package that seems to disappear in the shipping process? SCM tools ensure that doesn’t happen with your entire supply chain.

This module tracks everything from raw materials to final delivery, so you’re always in control. Manage logistics, track orders and optimize inventory levels all in real time.

The real benefit? Analytics and forecasting let you spot potential issues before they become problems and make smarter decisions to keep everything on track.

A preview of Rootstock’s material requirements planning tool. Source

• AI-Based Disruption Mitigations Recommendation
• Automate Logistics Operations Capability
• Collaborative Supplier Portal
• Control Tower Dashboard
• Creation of Supplier Scorecard
• Pricing Analysis or Strategy

13. Warehouse Management

Now let’s talk about warehouse management systems (WMS). If you want to get a handle on your warehouse space and inventory, boost client relationships and simplify your transportation system, a WMS should be on your radar.

This module focuses on tracking containers, managing proof of delivery and planning labor.

Access warehouse management details in Acumatica. Source

14. Integration and Extensibility

If you’ve ever felt like your different tools don’t play nice together, you’re not alone. Integration ensures that your ERP system connects seamlessly with other systems.

With an ERP system, everything is designed to work together. This consolidation means the folks over at sales, finance and inventory all share the same data in real time.
When a sale happens, your inventory updates automatically — no more manual entries or mismatched information.

However, it’s not just about connecting the dots. Having an ERP that can grow with you is indispensable. It means your system isn’t just a static tool but a dynamic platform that evolves with your business.

This adaptability allows you to integrate new technologies, scale effortlessly and respond to market shifts

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Why Is Requirements Gathering Important for ERP Selection?

Effective requirements gathering is the foundation of a successful ERP selection. According to Kalita, the biggest mistake buyers can make is failing to involve stakeholders at all levels—from strategic leaders to individual contributors.

It’s essential to get input from all departments and functions to ensure the ERP system meets everyone’s needs. Neglecting this can lead to misalignment between the software and the organization’s goals.

How To Evaluate ERP Software

Selecting the right ERP software is crucial for meeting your organization’s needs. Here are some key steps to follow:

• Select Vendors: Before searching for vendors, clarify your goals. Do you want to simplify operations or improve inventory management? Knowing what you need will help you find the right vendors. Make a list of reputable ERP providers known in your industry. Consider how each vendor’s offerings match your goals.
• Choose Selection Criteria: Calculate your annual costs by multiplying users by the monthly cost per user, plus additional expenses like implementation and training. Consider the ERP deployment timeline—quicker may be essential. Ensure it integrates with current systems and supports needed customizations.
• Create a Scorecard: Develop a scorecard to rank each vendor based on important criteria and assign scores based on how well each vendor meets them. You can also use comparison platforms to view multiple products side by side based on your requirements.
• Conduct Demos: Sign up for live demos of the shortlisted ERP systems to see how they work. Involve team members from different departments during the demos to get varied feedback on functionality.
• Analyze Total Cost of Ownership (TCO): Look at all potential expenses related to the ERP over its lifespan, not just the initial costs. This includes upgrades, training and support. Make sure the TCO fits your budget while giving you a clear view of long-term financial commitments.

Kalita also adds:

Our top piece of advice is to use software selection tools and engage consultants or subject matter experts (SMEs) to conduct a comprehensive evaluation process. This approach helps ensure that no future-ready features or emerging technology trends are overlooked.”

Kankana KalitaSenior Research Analyst, SelectHub

Compare ERP products based on your unique requirements.

A Real-World Example of Successful ERP Implementation

Before ERP Integration

Fulton & Roark used spreadsheets to manage inventory and Sage Live to manage their financial records. As their sales doubled yearly, they started noticing problems with these systems.

Spreadsheets made it hard to track changing inventory costs, and their accounting software couldn’t handle the proper tracking of the cost of goods sold (COGS), which is important for financial reports.

Requirements Gathering and Implementation

• Understanding the Needs: The company leaders saw that their current system couldn’t keep up with their fast growth. They needed one system that could manage both inventory and financial records.
• Choosing an ERP Solution: After reviewing different options, they decided on NetSuite ERP. This system could combine many business functions into one place.
• Quick Implementation: The new system was set up in just three weeks. This fast change allowed the team to move quickly from their old systems to the new ERP.

Results

The benefits of switching to an ERP system were clear right away:

• Better Accuracy: The new system helped them find and fix errors in their inventory and bookkeeping.
• Cost Savings: They didn’t need outside accountants anymore, which let them increase their unit and dollar sales without hiring more staff.
• Sales Growth: Sales went up by about 50% year-over-year, thanks to improved inventory and financial management.
• Smarter Decisions: With more accurate data on profit margins and inventory, the company expanded its online sales successfully.

Impact

• Leadership Involvement: The co-founders’ support was key in getting employees to agree to the ERP project, which is often important for success.
• Fast Implementation: This case shows that ERP systems can be set up quickly so companies see the benefits sooner.

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Building an ERP Requirements Template

Imagine navigating a new city. You’d grab a map or use GPS. The same logic applies to ERP selection. You can’t skimp this process.

We spoke directly to ERP experts. Here, we’ll break down their advice into what to do and what not to do when creating an ERP requirements template.

Best Practices

1. Capture Your Business Requirements

First, understand the core issues holding your business back.

Assemble your squad from finance, operation, sales and other key areas. You’ll need their expertise to identify your business needs.

Lisa Anderson, President and Founder of LMA Consulting Group Inc., emphasizes the importance of being thorough.

It is vital to create a template to ensure you have captured a comprehensive set of business requirements and have incorporated input from all business process owners.”

Lisa AndersonPresident and Founder, LMA Consulting Group Inc.

2. Maintain a Structured Approach

Without structure, the whole process can become chaotic and important details might slip through the cracks.

Remember, your ERP requirements template isn’t just for you; it’s also a blueprint for potential vendors to know exactly what your business needs.

Anderson advises,

Questions to ask internally:

• Business Objectives: What are you aiming for?
• Problem Areas: What’s causing you headaches?
• Key Requirements: Which are the features you can’t live without?
• Bonus Add-Ons: Which features are amazing extra additions but not deal breakers?
• Integrations: What other tools do you need to connect?
• Scalability: Can the ERP scale with your business?
• Training and Support: Is your internal IT enough to support a new system? Is outsourcing support required?

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3. Rank Your Requirements

Not all requirements carry the same weight. Having a clear system to rank and score them can make a world of difference.

Anderson shares her insights:

We also conversed with Sam Gupta, Principal Consultant of ElevatIQ. According to him, a good ERP checklist maintains structure throughout your company, ensuring no details slip through the cracks.

The ERP requirements template provides a structured approach to capturing all requirements pertaining to each stakeholder and function. Without a structured matrix, you are likely to miss critical requirements because of the overwhelming and competing priorities.

Sam GuptaPrincipal Consultant, ElevatIQ

Here’s where we can help. Our ERP requirements template is fully customizable and completely free! Add the finer details of your business and let the built-in frameworks generate a ranked list of features to consider.

Here’s a sneak peak:

A preview of our free requirements template.

4. Identify Process Boundaries

ERP isn’t a one-size-fits-all solution. Knowing the limits of your processes ensures you don’t overextend your system.

Gupta explained that buyers should be aware of process boundaries in their templates.

In other words, this means understanding where ERP can help and where it might not be the best fit. Not all processes need to be — or can be — managed by an ERP system. Some tasks are more easily managed by specialized software or tools outside the ERP.

It’s crucial to know where ERP fits in and where it doesn’t so you can use it effectively without expecting it to do everything.

Now that you know what you should do, let’s switch gears and talk about what you should avoid. Mistakes can be costly, and knowing these pitfalls can save you a lot of headaches down the road.

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Mistakes To Avoid

1. Don’t Make a Generic List

A generic list won’t capture the unique aspects of your business. Anderson warns,

Start with a broad list, but be sure to tailor it specifically to your business needs. Customization is key — your template should reflect your unique challenges and organizational needs.

2. Don’t Overlook the Need for Expertise

We can’t stress this enough: You can’t build a template alone. Get key people from across departments to share their expertise.

Gupta weighs in on mistakes he sees.

3. Don’t Focus Solely on ERP Lenses

Broaden your perspective. Looking at your needs solely through an ERP lens can be limiting. Gupta advises:

Prioritize what truly matters. Gupta cautions that getting bogged down in non-critical details can dilute your focus and effectiveness.

This means distinguishing between must-haves and nice-to-haves and keeping your attention on the factors that will drive success.

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FAQs

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Next Steps

By now, you should have a solid understanding of how to select ERP software for your business needs. If you need more assistance, SelectHub offers a free ERP requirements template helps you prioritize which software modules and features you care about to find the best-matching products.

Which ERP requirements are most important to you? Let us know in the comments.

Contributing Thought Leaders

Lisa Anderson is the founder and president of LMA Consulting Group Inc., a consulting firm specializing in manufacturing strategies and supply chain transformation that optimizes customer experiences and initiates profitable, extendable business growth.

James Cunningham is an author and dietary supplement connoisseur at Total Shape with a BSc in Sport & Exercise Science from the University of Hertfordshire. His marketing experience stems from promoting his own coaching services since 2012.

Sam Gupta has been a thought leader in the digital transformation space for almost 20 years, emphasizing financial systems and ERP. He is a principal consultant at ElevatIQ, a digital transformation consulting firm dedicated to business process automation, customer experience, ongoing enhancements and marketing automation.

Kevin Miller is a digital marketing expert, entrepreneur and angel investor who was named Entrepreneur of the Year in the 2021 American Business Awards. He is the co-founder and CEO of GR0, a digital marketing agency with a people-first approach to improving brand reach.

Steve Pogson is an eCommerce marketing specialist who founded First Pier, a marketing organization, in 2009 to help local businesses with their digital needs. In the last ten years, the company has grown from an in-home operation to a full-service digital marketing agency based in Portland.

A seasoned business and research analyst, Kankana Kalita specializes in ERP, CMMS, manufacturing, construction, supply chain, HRMS and CRM. Prior to joining SelectHub, she earned a Bachelor’s degree in Computer Science and Engineering, an MBA in Operations and Marketing, and worked in email marketing and logistics.