Understanding ERP Systems

Navigating ERP systems can be a complicated process if you go at it alone. This guide will help you increase your understanding of ERP systems. 

What is an ERP System?

ERP is an acronym that stands for Enterprise Resource Planning.  An ERP software system is a suite of business applications used to automate business processes and manage resource data across the entire enterprise, hence the name ERP system! Any organization across all  industries can use ERP systems, from for-profit  wholesale distributors, manufacturers, technology and services firms to nonprofit organizations  and government agencies and beyond.  ERP systems work across the organization but many have adapted specializations, providing deeper functionality for industry-specific functionality. 
In this guide you will find information about:
  • Benefits of an ERP System
  • How to decide when to upgrade your ERP system
  • Prevalent ERP systems vendors
  • Selection criteria for ERP systems 
  • How to overcome ERP system implementation challenges
ERP systems are very powerful and can truly make or break a business. Implementing or upgrading an ERP is risky, but the investment has the potential to dramatically increase the performance of your organization for decades to come.

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Benefits of an ERP System

Organizations receive significant benefits by migrating to modern, well-designed ERP systems.

A new ERP system provides an opportunity for staff to develop the optimal solution for the future state of the business. It is a chance to leverage newer technologies like cloud, process automation, modern user experiences, more access to data for reporting and analytics, app to app integration, etc.

In surveying many of our clients’ projects, we find most companies receive these typical benefits from upgrading to a new ERP:


  • Visibility into pipeline and upcoming projects.
  • Increase sales by automating and forecasting sales and improving visibility.
  • Standardize customer related data and track all interactions in one single repository.
  • Analytics and Reporting information within the CRM System.

Purchasing and Inventory

  • Real time inventory information for better purchasing decisions.
  • Gain visibility into all purchases across the entire company.
  • Better predictability for ordering long lead inventory items i.e. no rush orders or need to borrow parts from other jobs.
  • Accessibility to inventory shipping tracking information.
  • Increased efficiency of the overall inventory system.
  • Computerized 3-way matching.
  • Accessibility of information in a centralized location.

Customer Support

  • Better ability to service warranty customers.
  • Ability to track warranty information such as part numbers, labor, and timing.


  • Reduce errors by automating tracking of key accounting documents.
  • A single, centralized system eliminating the need for manual work.
  • Provide more beneficial financial reporting to improve decision-making. 
  • Provide executive team with more real-time reporting and analytics. 


  • Increase manufacturing productivity with automated resource management and near real-time visibility and controls.
  • Improved tracking of manufacturing process. 
  • Improved communication with sales about manufacturing schedule. 

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How to Decide When to Upgrade Your ERP System

Not sure if the time is right to upgrade your ERP system? Here's our list of top reasons to upgrade:


Regarding ERP systems, the term upgrading has two different means. "Upgrading" typically refers to going from the existing application version to the most up to date version with the same vendor. However, some use the phase "Upgrading" to  describe the process of migrating from an existing application to a completely new package from a completely new vendor. Often organizations don't upgrade and are on older versions and their legacy vendors force them to upgrade to a new version.  When this happens, it's a great time to consider all of the options in the market. But no matter the reason for upgrading your ERP System, an upgrade is disruptive so gaining consensus and cooperation across leaders throughout your organization is key to gaining support and needed resources to perform the upgrade.

The top reasons to consider an upgrade to your ERP system are: 

  • Growth — there is an increase in the flow of data and transactions that need to be tracked, which leads to manual processes  that are prone to errors, revenue leakage, broken spreadsheets, and excessive time for closing the books or creating key reports for management
  • New Products and Services — the product portfolio is diversifying and expanding which is difficult to track in the legacy software or spreadsheets
  • Selling to New Markets — customers and clients reside in new geographical locations; legacy software can't segment customer bases for your salesforce
  • New Business Lines — brand new products or services create strain on legacy software systems which cannot accommodate multiple streams of work
  • Sunsetting Software — legacy software will no longer be supported; users lose access to annual updates for critical functions like taxes and tax reporting forms
  • Regulatory Reasons — new industry regulations mandate compliance and ways to track transactions or create reports that legacy software cannot comply with
  • New Leadership — ownership brings a new executive on board to bring sophistication to the company's operations by implementing a new ERP

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If you suspect you need an upgrade you will need buy-in and support from others.  Here are brief points to consider for putting together the business case for upgrading, which will boost internal support:

    • Clarify needs — let your company know why an upgrade is the right thing to do. Not everyone understands the need to invest in good software, particularly if the software doesn’t directly benefit them or their department, so it is your job to educate employees.
    • Confront the issue of cost — be honest about the necessary financial resources for this project. There are many buckets of costs for a project of this size. Software contracts and implementation resources are the big ones.  But don't underestimate data migration, customizations, integrations, and external resources to help, like an ERP project manager.
    • Create a benefit analysis — sometimes benefits are not quantifiable, in the case of unsupported software. But identifying benefits can still make a better case for a software strategy which is in the company's best interest.  Ownership or management will get behind your project more readily if you can identify an improvement to top line sales, decreased costs of good sold, or improved profit.
    • Create a risk mitigation analysis —  make sure there is a plan to mitigate risks that possibly can derail your project.  If not, re-evaluate your upgrade until you can mitigate those risks.
    • Be sure that the benefits outweigh the costs — upgrading a system is rarely an easy venture, but the advantages should outshine the challenges.

Lessons to keep in mind:

  • Don’t change software unless you absolutely have to.
  • Be sure you know exactly what you want before you start the process.
  • Be a helpful and active participant in selecting your ERP system. You know your company’s needs best, so drive the process, don't expect the ERP system vendor to drive it.

NOW start the selection process.

The Needs Assessment wasn’t just a gloss-over; it was a very detailed, intimate look into our organization that resonated with the decision and policy makers outside the fire department, which is really where that leverage had to come from.

Holger Durre

Deputy Fire Chief, Boulder Fire-Rescue

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Prevalent ERP Systems

As with most purchases, you have options when it comes to ERP. There are dozens of vendors in the market, each with their own unique offerings. Use this guide to familiarize yourself with the most prevalent ERP systems.


Tier Grading System

We have established a tier system for understanding ERP systems that is based on size of an organization.

  • Tier 1: Large Enterprises
  • Tier 2: Medium Enterprise
  • Tier 3: Small to Medium
    •  Examples:
  • Tier 4: Small
    • Integrates accounting processes with other departments
    • Maintains books for a single company
    • Examples:
      • Freshbooks 
      • QuickBooks
      • Sage 50cloud
      • Xero

ERP Advisors Group was excellent through the whole process and was able to give it a degree of attention that we didn’t have the bandwidth to do ourselves.
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Brandon McNeil

Vice President, Lightning eMotors

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Selection Criteria for ERP Systems

Selecting an ERP system is no easy feat. You'll need help. Luckily, that's what we're here for. Years of experience has brought about a tried-and-true method of selection, and we're about to share it with you. 


After making the decision to embark on an ERP journey, your first priority should be to pinpoint the areas of the business that need better automation with a new ERP system by determining the following: 

  • Examine your business process: what works and what doesn't work? 
  • Make a roadmap from the beginning of the project all the way to the end.
  • Identify pain points of your company and determine which of these areas can be fixed with software. 
  • Meet with end-users of the software to understand their unique requirements for software. 
  • Make your own demonstration script based on what the software should include.
  • Ensure software vendors demonstrate definitively their software can meet your requirements, or don't move forward with them.

Going through these steps should provide an answer to the following question: can the product that we are evaluating accomplish what we need it to or not?

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Now, you have to set a standard by which you will judge ERP software. The following list is our tried-and-true software selection criteria:

  • Application usability and functionality: assess the key capabilities of the software. Is it easy to understand? Do you like the look and feel of it (user experience)? Without this criterion, the rest become irrelevant, because an ERP system will fail without usability and good functionality.
  • Technology platform: look for differentiators between your finalists. Will you have access to developer tools for custom workflows and scripts as you grow as an organization? Do you have to contact the software publisher directly to access it? Does your company have criteria for data center locations? Do you need access to the backend of the data tables? Can the vendor accommodate your transaction volume? Drill into these technology considerations before signing on the dotted line.
  • Cost: this one is tricky; you never truly know the price until you know what modules, integrations, customizations, user counts and third-party solutions you will need to purchase. While cost isn't the most important criterion, you also don't want to vet products that are the wrong order of magnitude of cost for your needs.  For instance, don't put the "Cadillac" of ERPs, like SAP S4/HANA, that can do everything and anything in front of your team if a robust implementation and sizable recurring software cost is out of the question.  You can demoralize your entire team if you tell them "no" after they have grown to love the product during the sales process.
  • Software vendor fit: look at the software vendor’s customer base, revenue, size, and functionality fit. Comparing these factors is a good way to narrow down finalists.  A viable company will stand out well against a minimally viable one.
  • Implementation resources: consider level of engagement, understanding of client needs, and executive support.  You may have clicked very well with the sales team, but they will drift off to work on the next deal, and not be part of your implementation, so make sure to meet resources who reasonably would be assigned to your team, and that you click as well with them, too.
  • Gut feel: trust yourself; your instincts are often right. 

During the process of working with ERP Advisors Group, we learned about solutions and partners that we might not have known. The team at ERP Advisors Group was really responsive to what we wanted. They had a great framework."
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Rebecca Slattery

Controller, Pursuit Collection

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Overcoming ERP System Implementation Challenges

Don't let these common implementation errors hinder the success of your ERP System. Our proven methods for implementation are guaranteed to set your company up for ERP success. 


The biggest ERP system challenges occur during the implementation. These projects are difficult and rarely go off without a hitch — you have to be prepared to confront problems as they come up. 

These are some of the challenges you might face as you go through an ERP system implementation, as well as how you might address them.

Your implementation is over budget but you are not live yet. 

  • If your implementation is already underway, consider having an ERP consultant do an analysis of key factors and present findings on what the problems really are so you can make an informed decision about what really needs to be fixed.
  • Implementation remediations are tough.  Sometimes the right answer is stop all development to analyze what went wrong and strategize on how to re-approach the implementation for a successful go-live.
  • If you haven't started your implementation, overestimate your budget by 40% to hedge against those bad surprises of needing a customization, bolt-on, or module that you hadn't anticipated.
You cannot get the software to work the way you expected it.
  • This point assumes you picked the right software during the selection and the right implementation partner.  If you have the wrong software product or an inexperienced, or unavailable implementation team, few of these other tips will help rescue your project from failure.
  • Next, assuming the product was configured correctly, make sure your users are actually trained to use the software.  If you have savvy users, yet the product still doesn't work, your Project Manager should document every issue and work with the implementation partner to resolve each one.
  • There may be a Change Management issue with users who are accustomed to in-house developers who routinely create user-friendly features and reports at their request. The new ERP will be less custom for them, so you should spend time with unhappy users to make sure they can do their job.  If they really can't do their job, then decide if it is critical functionality that is missing or if it can wait for a future enhancement.  Help the users to navigate the newness of their processes.

You thought the implementation partner was going to be your Project Manager. 

  • The role of an implementation partner is not to manage your team, it is to manage their own developers. Your project will be more successful if you have a dedicated client-side Project Manager who can manage your personnel and report to your Executives on status and issues.  
  • Make sure your people have time available for the implementation -- this is critical to the success of your project.  The best Project Manager in the world can't overcome an implementation team who is missing in action on the client side.  Consider backfilling key people to handle their day job activities, freeing them up to focus more time on the implementation meetings and homework.

You thought the implementation partner was going to migrate your data, but they won't.

  • Many ERP project sponsors find themselves dismayed at the prospect of migrating their own data.  Your professional services statement of work will address data migration, but it is typically confined to loading your clean, extracted and transformed data.

You are frustrated to find out you cannot bring all of your historical data into your new system.

  • Sometimes clients insist on having detailed historical information for data like sales orders or purchase orders.  Other times users assume they need 7 years of historical data to appease their auditors.
  • If you have an on premise, legacy system, you can always revert to checking it for audits.
  • If you are migrating off of a service with a subscription, find out about keeping one read-only user license. This retains access to your historical data while saving your company a huge amount of time and money from moving irrelevant data into your new system. 
  • To get your historical sales or purchasing data, you will need old vendors, old clients, archived items, parts and BOMs.  Consider the value of cleaning, migrating and validating records which you do not need for running the business -- determine if the necessity to have it in the new system outweighs the risk and expense of bringing it over.

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ERP Advisors Group was able to capture the vision that I had for our ERP project and implementation. They were able to fill in the gaps where we might have failed in the execution of our project, and that allowed us to really focus on what we were good at internally. All in all, our ERP implementation turned out really well thanks to ERP Advisors Group.

Chris Carpenter

Director of IT, Epilog Laser

ERP Advisors Group is your independent ERP consulting firm dedicated to objective and unbiased advice for all phases of ERP projects. 

  • We begin by setting the strategy with the Needs Analysis, which makes the case and enlists support for an ERP system.
  • We conduct a diligent Selection process, negotiating the best contract for software and services on your behalf.
  • We ensure you successfully manage your project and migrate your data so you go live with your new software.

Let us know what help you need for your ERP system.

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