For a growing SME, an ERP is the way to bring work that runs on spreadsheets and disconnected programs under one roof. But ERP selection for SMEs carries different risks from large companies: budgets are limited, few internal people can be spared for the project, and a wrong choice disrupts daily operations directly.
1. Define the problem, not the product
Instead of "we need an ERP", start with concrete problems such as "we want to see stock differences in real time, not at month end" or "data is entered three times between quote, order and invoice". This list is the basis for selection and for measuring success later.
2. Prioritise critical processes
Every SME has two or three must-have processes: currencies and export documents for exporters, bills of materials and costing for manufacturers, warehousing and shipping for distributors. Weight the selection towards these. The fit-gap analysis approach also works at a smaller scale.
3. Cloud or on-premise?
- Cloud (SaaS): low upfront cost, infrastructure and updates handled by the provider. Customisation is limited, which is actually an advantage for most SMEs.
- On-premise: more control and customisation, but servers, backups, security and updates are your responsibility.
Look not only at licence fees but at your internal IT capacity and data requirements.
4. Calculate the total cost of ownership
Licence or subscription fees are only part of the cost. Over five years, include implementation services, data migration, training, integrations (e-invoicing, banks, e-commerce), annual maintenance and support, and the time your own team spends on the project. The lowest bid is rarely the lowest total cost.
5. Ask for scenario-based demos
Ask for a demo of your processes, not the vendor's standard demo. Give every candidate the same scenarios: "Quote this customer in foreign currency, convert to an order, ship partially, invoice, process a return." That way systems are compared on the same yardstick.
6. Choose the solution partner too
In SME projects, success often depends more on the team implementing the software than on the software itself. Ask about the solution partner's references in your industry, project methodology, post-go-live support model and who exactly will be on the team. Support from an independent ERP consultant during selection closes the knowledge gap between vendor and company. The article on choosing an ERP consultant also helps with criteria.
The most common SME mistakes
- Choosing for the company as it is today, ignoring growth over the next three years
- Trying to carry every habit from the old program into the new system through customisation
- Not naming an internal owner (an ERP manager or key user)
- Not budgeting for data cleansing and training
A well-chosen ERP is the backbone that carries an SME's growth. Spending a few more weeks on selection creates an efficiency gap that lasts for years.
