What to consider when choosing an ERP system

Before you start booking demos or comparing feature lists, there’s a more important first step to take: understanding why you’re considering a new ERP in the first place.

For most companies, the ERP journey doesn’t start because they’re excited about new software. It starts because something no longer works. Maybe the current accounting system can’t keep up with growth. Maybe multiple entities are being managed across separate tools. Maybe group finance is struggling to centralize reporting, standardize processes, or get timely visibility across countries and currencies. Or maybe the business has simply outgrown a local accounting setup that was never designed for scale.

These are practical problems, not technology ambitions. And they matter, because the reason you start looking for an ERP should shape every decision that follows.

This is where many teams go wrong.

Instead of grounding the search in those underlying needs, they jump straight into demos.

And that’s where choosing an ERP can start to feel a bit like buying a house. You walk through the demo and everything looks perfect. The layout makes sense. The features shine. The sales pitch promises faster closes, fewer errors, total visibility, and a smooth path to growth.

And on paper, it all checks out.

But then you move in.

A few months later, the cracks start to show. The setup isn’t as practical as it first appeared, and everyday tasks take more effort than expected. That “future-proof” functionality turns out to depend on additional modules or tailored configurations, often requiring support from implementation partners to make the system fit the business properly. And somehow, the system feels most fragile right when you need it most—during month-end, audits, or periods of growth.

That’s the ERP trap. It’s easy to be impressed by a polished demo. It’s much harder to understand what it’s like to live with the system day after day.

Because once you commit, you’re not just buying software. You’re deciding how information flows through the business, how approvals happen (or don’t), how quickly finance can report with confidence, and how well your operations scale as the organization grows. An ERP becomes the operating system of your company.

When it fits, everything runs more smoothly without anyone needing to “try harder.” When it doesn’t, friction shows up everywhere—extra steps, extra spreadsheets, and endless “can you just export that again?” messages.

So let’s keep this practical. This isn’t a vendor love letter or a buzzword-filled pitch. It’s a real-world guide to choosing an ERP that works in reality—not just in the demo.

Start with the “why” before the “what”

Before you compare platforms, modules, pricing tiers, and feature checklists, pause and ask the most important question:

Why are we doing this at all?

Not in a philosophical way. In a very real, operational way.

Because if the “why” is fuzzy, the project becomes a magnet for everyone’s wish list. Finance wants better close. Ops wants better inventory. Sales wants faster order processing. Leadership wants dashboards. IT wants fewer tools. Suddenly your ERP selection turns into a buffet plate piled too high and you don’t even know what you’re trying to taste.

Here’s the uncomfortable truth: if you can’t clearly explain the “why,” your ERP will quietly turn into an expensive digital filing cabinet. It will store data, yes. But it won’t improve the business. It won’t fix broken workflows. And it definitely won’t deliver the outcomes you told leadership to expect.

So instead of starting with “which ERP is best?”, start with questions like:

• what’s currently slowing us down the most?

• where do errors happen repeatedly and why?

• what work do we do manually that we shouldn’t be doing manually?

• what decisions are we making too late because reporting takes too long?

• what risks are we carrying because processes aren’t controlled or auditable?

A strong “why” keeps you grounded. It stops you from buying features you’ll never use, and it forces the selection process to focus on what actually matters: making the business run better.

Think of it like house hunting again. You don’t start by choosing the fanciest kitchen taps. You start by deciding what you need: more space, safer structure, better location, fewer repairs. Then you choose a house that supports that life.

Same with ERP.

Define the problems you’re actually trying to solve

An ERP should fix real pain not hypothetical problems you might have “one day” if everything goes wrong. This sounds obvious, but it’s where many ERP projects quietly go off track.

Before you talk features or platforms, take a hard look at how work actually gets done today. Not how it’s supposed to work on paper, but how it really works on a busy Tuesday when someone is on holiday, a deadline is looming, and data needs to move fast.

Ask yourself, and your teams questions like:

• are teams drowning in spreadsheets just to keep processes moving?

• is month-end close painfully slow, stressful, or dependent on a few key people?

• do approvals get stuck in inboxes, lost in email chains, or bypassed altogether?

• is reporting inconsistent, delayed, or mistrusted by leadership?

• is growth starting to expose cracks in processes that used to “work fine”?

Pay attention to the quiet frustrations. The repeated manual checks. The reconciliations no one trusts. The shadow systems people build because “it’s faster this way.” Those are signals. And they matter far more than shiny feature lists.

Most importantly, be honest. This isn’t about writing a polished business case or justifying a decision that’s already been made. It’s about identifying the problems that genuinely hurt day-to-day operations, create risk, or slow the business down. An ERP that doesn’t address those problems will only digitize them and make them harder to undo later.

Set measurable success criteria

Once you’re clear on the problems, you need a way to define success that goes beyond vague ambition.

“Modernizing finance” sounds great in a slide deck, but it doesn’t tell you whether the ERP is actually doing its job. If you can’t measure improvement, you won’t know whether the system is helping or just quietly existing.

Instead, translate your pain points into concrete outcomes, such as:

• reducing month-end close from 10 days to 5

• cutting manual journal entries by 40%

• achieving real-time visibility by entity, currency, or business unit

• reducing invoice processing errors and rework

• shortening approval cycles without losing control

These metrics serve two purposes. First, they force clarity internally. Teams align around what “better” actually means. Second, they act as a reality check during vendor demos.

Because here’s what happens otherwise: demos start to feel magical. Dashboards load instantly. Workflows look smooth. Everything seems possible. Without clear success criteria, it’s easy to be impressed by what looks good rather than what moves the needle.

Clear, measurable goals keep you grounded. They help you ask sharper questions, challenge assumptions, and ultimately choose an ERP based on outcomes not promises.

Not all ERPs are built the same and the differences go far beyond feature lists or brand recognition. The type of ERP you choose quietly shapes how much flexibility you’ll have, how complex your setup becomes, and how much internal effort it takes to keep everything running smoothly.

This is where many teams underestimate the long-term impact of early decisions. On day one, several options may look similar. Three years later, the trade-offs become very real.

Cloud vs on-premise vs hybrid

This choice isn’t just technical, it’s strategic. And lately, it’s also being coloured by one big buzzword: AI.

You can’t scroll LinkedIn or attend an ERP webinar without hearing about “AI-native ERPs,” “AI agents,” or promises that artificial intelligence will somehow fix broken finance processes overnight. Boards are asking about it. Vendors are marketing it aggressively. And many finance teams feel pressure to “do something with AI,” even if it’s not entirely clear what that something should be.

A cloud ERP is often where AI conversations start, and for good reason. Cloud platforms make it easier to layer AI on top of existing data: natural-language queries, automated reporting, anomaly detection, or generating standard management packs without clicking through ten screens. This kind of AI doesn’t replace finance teams. It removes friction. It saves time on repetitive work and helps people get answers faster.

But here’s the important part: AI only works if the foundation is solid.

If your core data is fragmented, processes are inconsistent, or entities aren’t properly structured, AI won’t magically fix that. It will simply surface messy data faster. That’s why many experienced finance leaders are cautious about “AI-first” ERPs that look impressive in demos but haven’t yet proven they can handle complex, multi-entity, multi-currency reality at scale.

An on-premise ERP, by contrast, gives you full control over data, customization, and timing but typically makes it harder to adopt new capabilities like AI quickly. Innovation tends to move slower, upgrades require planning, and adding new functionality often means more internal effort.

A hybrid setup sometimes emerges when organizations want the stability of an existing ERP while experimenting with AI tools around the edges using them for reporting, analytics, or data extraction without touching the core. This can be a pragmatic step, but it also increases integration and governance complexity.

So the real question isn’t whether AI belongs in your ERP strategy it probably does.
The real question is where it creates real value today, and where it’s still more promise than payoff.

AI won’t close your books for you. It won’t fix unclear processes. And it won’t replace a reliable core ERP. What it can do, when built on the right foundation is remove friction: fewer clicks, faster answers, less manual reporting.

Which brings the decision back to basics:
Do you want to manage infrastructure or do you want to manage the business, with a stable core and smart innovation layered on top?

Suite vs best-of-breed

The next big decision is architectural: one platform or many.

A suite ERP aims to cover everything in a single system - finance, procurement, inventory, sometimes HR and beyond. The big advantage is simplicity. Fewer integrations mean fewer points of failure. Governance is clearer. Data flows more predictably. For many organizations, especially those prioritizing standardization and control, this approach reduces long-term friction.

The downside? You’re committing to the vendor’s interpretation of “good enough” across multiple domains. Some modules may be strong, others merely adequate.

A best-of-breed approach takes the opposite view. You choose the strongest tool for each function an ERP for core finance, specialized tools for billing, procurement, treasury, or planning, and connect them through integrations. When done well, this creates a powerful, flexible ecosystem that adapts as the business grows.

But there’s a catch. Best-of-breed only works if integration, data ownership, and governance are taken seriously. Without that discipline, you end up with fragmented data, duplicate processes, and a heavy dependency on technical maintenance.

Think of it like cooking. A suite is a set menu: predictable, efficient, and designed to work together. Best-of-breed is a custom tasting menu: incredible when the chef knows what they’re doing, but chaotic if ingredients aren’t coordinated.

There’s no universally “right” answer. The right choice depends on your complexity, your appetite for integration, and how much operational discipline you’re willing to maintain over time.

Map your core processes before you shop

Before you look at a single demo or feature list, take the time to map how work actually flows through your business. Because if you don’t understand your own processes, the ERP will end up defining them for you and not always in ways that make sense.

This is one of the most common (and expensive) mistakes in ERP projects. Teams jump straight into software selection, only to realize halfway through implementation that the system doesn’t match how the business really operates. At that point, you’re stuck choosing between painful workarounds or costly customizations.

Process mapping doesn’t need to be a six-month consulting exercise. It just needs to be honest. Walk through each step and ask: who does what, when, and with which data? Where are decisions made? Where do handovers happen? And where does information get lost, duplicated, or delayed?

Order-to-cash and procure-to-pay

Two workflows deserve special attention because they touch cash, controls, and daily operations more than almost anything else.

Order-to-cash typically looks like this:
quote → invoice → collect → reconcile

Procure-to-pay usually follows this path:
request → purchase → receive → pay

On paper, both flows seem straightforward. In reality, this is where friction tends to hide.

Ask yourself:

• where do things slow down today?

• where do approvals sit waiting without visibility?

• where is data re-entered because systems don’t talk to each other?

• where do errors show up repeatedly, even after checks?

Every manual step is a clue. Every spreadsheet used to “bridge the gap” between systems is a signal. That’s where ERP value lives not in fancy dashboards, but in removing unnecessary effort from everyday work.

A good ERP should support these flows end to end, without forcing teams to invent their own shortcuts just to keep things moving.

Close and reporting

Closing the books isn’t just an accounting exercise. It’s how the business understands itself. If the close is slow, messy, or stressful, leadership decisions are based on outdated or incomplete information and that has real consequences.

When evaluating an ERP, look closely at how it supports close and reporting:

• are audit trails clear and easy to follow?

• are reconciliations automated where possible, or entirely manual?

• are dimensions (entities, cost centers, projects) consistent across modules?

• can reports be generated without complex spreadsheet gymnastics?

Many teams underestimate how much time is lost not in posting transactions, but in explaining them tracking down discrepancies, validating numbers, and rebuilding reports in Excel because the system output isn’t trusted.

A faster, cleaner close doesn’t just save time. It reduces stress, improves confidence in the numbers, and gives the business a clearer picture of reality.

And that leads to better decisions. Simple as that.

Choosing an ERP system isn’t about chasing the most powerful platform or the longest feature list. It’s about finding the system that actually fits your business—the way you work today, and the way you plan to work tomorrow.

The best ERP decisions don’t start with software. They start with clarity. Clear outcomes. Clear processes. Clear ownership of data and integrations. When those foundations are in place, the technology supports the business instead of fighting it.

It also pays to remember that an ERP is something people live with every day. If it’s intuitive, reliable, and aligned with real workflows, it quietly enables better decisions, faster execution, and smoother growth. If it’s confusing or rigid, teams will work around it—and no amount of functionality will fix that.

So take your time. Ask uncomfortable questions. Push beyond polished demos and marketing language. Prioritize usability, integration, and long-term sustainability over short-term impressions.

Get it right, and your ERP won’t feel like a system you have to manage. It will feel like solid infrastructure—something that simply works in the background, giving your business the stability and confidence to grow, adapt, and move faster without unnecessary friction.

Want to find out what Cobase can do for you?

Frequent Asked Questions (FAQs)

1. How long does it take to choose an ERP system?

Typically a few months, depending on complexity, number of stakeholders, and process maturity.

2. What is the most common ERP selection mistake?

Choosing based on demos instead of real workflows and real data.

3. Should we customize the ERP to match our processes?

Light customization is fine, but heavy customization usually signals poor fit or overly complex processes.

4. How do we know if an ERP will scale with us?

Evaluate multi-entity support, pricing growth, performance, and governance—not just features.

5. Who should be involved in the ERP decision?

Finance should lead, but operations, IT, and key end users must be involved early for success.