If you’re looking to adopt a complete ERP software suite that can help optimize and manage your every business need, you’re probably aware of how overwhelming the market can look at first glance. With so many options and features available, how do you identify which ones are right for your needs?

Whether it’s a new software or an upgrade to your current system, putting together a requirements checklist helps you know exactly what you’re looking for. To help you build your ideal ERP requirements template, we’ve made a list of some of the most common ERP software requirements and features.

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What This Article Covers

• Key Requirements/Features
  • Analytics and Reporting
  • Asset Management
  • Customer Relationship Management (CRM)
  • Finance and Accounting
  • HR Management
  • Inventory Management
  • Manufacturing
  • Order Management
  • Procurement
  • Project Management
  • Service Management
  • Supply Chain Management (SCM)
  • Warehouse Management
• Crafting an ERP Requirements Template
• Purchasing Considerations
• How To Choose the Right ERP System
• Next Steps

Key Requirements and Features

Here’s a list of several of the most common ERP software modules and capabilities that are worth considering when seeking out a new or updated platform. Use this as a starting point when crafting your requirements template.

1. Analytics and Reporting

According to digital marketing expert Kevin Miller,

You can have the greatest collection of data, but if you do not have any way of conveying what it means, then it will do little good… 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.”

All areas of a business benefit from ERP software with solid reporting and analytical capabilities. Using these platforms to handle your business data lets you craft personalized dashboards, export reports and data in several file formats, and compose several documents. Some example reports include:

• HR
• Financial Management
• Environment, Health and Safety
• Inventory Management
• Manufacturing
• Sales
• And more!

Documents and analytical data also help you create reliable paper trails for auditing and inspection purposes.

For example, you may manufacture home furniture and want to ensure that your products meet regulatory compliances. Your documentation can demonstrate your adherence via quality metrics, reviews, team member comments and more.

2. Asset Management

ERP software with an optimized asset management module lets you maintain and confirm assets according to locations, categories or company departments. You can also input bulk audit plans for repetitive audits with audit names, start dates, types, end dates and more.

This module also allows you to sort and organize asset data, including manufacturers, serial numbers, vendors, warranties, BOMs, facilities, KPIs and more. You may also add manuals, images and videos.

• Asset Audits
• Asset Downtime Tracking
• Creating and Viewing Asset Hierarchy
• Creation of Asset Profile
• Generate QR Codes or Barcodes for Assets
• Linear Asset Management
• Multi-Site Asset Management

3. Customer Relationship Management (CRM)

ERP software offers many valuable CRM software capabilities, including automated marketing tools for different campaigns, robust analytical tools that help businesses improve the customer experience from start to end and increase retention rates, and sales tools that enable users to manage sales orders across all channels.

According to Steve Pogson, founder of First Pier,

It’s not just about managing interactions; it’s about leveraging data from those interactions to provide personalized shopping experiences…This data-driven approach enables targeted marketing, personalized recommendations, and improved customer support—factors that directly influence customer retention and sales growth.”

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4. Finance and Accounting

According to James Cunningham, Complete Health Optimization Coach at Total Shape,

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.”

Without a software system, your team can spend dozens of hours monthly on tedious tasks like payroll, invoicing and budgeting. But when these processes are automated, you enable your staff to shift to a more advisory role.

ERP software aids in this adjustment further by providing analytical tools. The system’s quick yet accurate analysis reduces errors and allows organizations to perform proper financial health gauging across all departments.

5. HR Management

HR management helps you handle employee training and protocols while ensuring workers are happy with their jobs. HR associates also serve as talent scouts to recruit top-notch workers who meet the company’s goals.

With an HR management module, you can stow away all employee data in one centralized place, enact benefit programs, leverage payroll quickly and precisely, and regularly adhere to tax and employment compliances.

The proper accessories or standalone HRIS platform streamlines tasks and ensures the company and employees have a healthy relationship.

• Absence Management
• Benefits Administration
• Centralize Employee Profiles
• Employee Engagement Surveys
• Employee Onboarding
• Employee Self-service
• Global Employee Management
• Performance Measurement
• Succession Planning
• Time-Tracking Methods

6. Inventory Management

Managing your distribution and supply chain requires a solid inventory management module so you know what materials and products are on hand at any given time. You can receive real-time notifications and establish minimum quantity levels to know when it’s time for replenishment.

This module also lets you set up barcodes to quickly scan items and link your data with CRM tools to understand the supply and demand of particular objects. Inventory management tools also allow you to immediately locate any item in your warehouse, streamlining order processing.

For example, if you own a grandfather clock company with raw material storage, you may find suitable wood, hands, faces and more to produce the ideal product.

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7. Manufacturing

ERP systems can manage manufacturing processes, saving time and money by automating parts of the supply chain and freeing up your staff to handle higher-level tasks. This module also helps you pinpoint slowdowns and eliminate bottlenecks.

Manufacturing tools make it easier to control production, analyze quality, manage compliance and orders, as well as several other supply chain aspects.

8. Order Management

ERP software with 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.

9. Procurement

Whether you use procurement software or integrated ERP features, having procurement tools on hand allows you to elucidate supplier selection operations, reduce costs and govern vendor performance.

An ERP module dedicated to procurement can also automatically create purchase orders, help you draft and allocate
RFQs to suppliers, and bill vendors while processing payments.

• Automatic Creation of Purchase Orders
• Contract Creation With Vendors
• Create a Request for Quotation
• Creating and Submitting Purchase Requests
• Maintaining Vendor Record
• Manual Creation of Purchase Orders
• Three-Way Match

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10. Project Management

If your business has to keep track of multiple long-term tasks, your ERP requirements list should include project management toolsThese 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.

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, administering service requests and deliveries, or linking installation materials and services to projects to enhance preparations.

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

12. Supply Chain Management (SCM)

SCM tools help govern procurement, distribution and resources, making them ideal for retailers, manufacturers and distributors’ ERP requirements checklists.

As with procurement and order management tools, SCM modules help automate tedious tasks within your supply chain. This feature enables businesses to spend less time on repetitive work, which results in higher productivity levels and increased speed of operations.

Additionally, automation reduces the risk of human error by decreasing the amount of user intervention needed to complete an order.

• 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

Warehouse management systems (WMS) are another kind of distribution module that allows you to sort and manage warehouse spaces and inventory, boost client relationships, simplify your transportation management system and more.

You should have this capability in your ERP requirements checklist if you need to record and track containers and proof of delivery, implement labor planning to predict resource requirements, or employ scheduling to forecast better numbers.

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Crafting an ERP Requirements Template

Like searching for a new destination with a map or GPS, you can’t find suitable modules without an effective ERP template. You can’t skimp this process.

Lisa Anderson, president and founder of LMA Consulting Group Inc., sat with us to explain the importance of a thorough template.

She said:

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.

“A business requirements template keeps software providers on track and answering questions that are relevant to the client’s needs. [The template] will provide a methodology for ranking functionality and ERP suppliers.”

Principal consultant of ElevatIQ Sam Gupta conversed with SelectHub on how an ERP checklist maintains structure throughout your company.

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.”

Anderson discussed how the template should capture every critical part of your business.

The most important features of a requirements template include the business requirements, categories for the business requirements, a way to capture critical success factors for the ERP implementation, a ranking methodology for the requirements and a scoring mechanism for the business requirements.”

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

Most companies mis-assume that ERP is the default choice for all processes, [but] that is rarely the case. Identify the appropriate boundaries for each system involved to determine the scope of the ERP.”

Lastly, Anderson stressed some common ERP requirements template mistakes that companies should avoid.

One pitfall is to have too generic a list of business requirements for a specific client. Although the best approach is to start with a comprehensive list of requirements, it must be tailored to the business.

“Another mistake is to not have a clear ranking and scoring methodology for the requirements.”

Gupta also weighed in on mistakes he sees.

The most common mistake companies make is not understanding the depth of expertise required to weed out assumptions embedded with requirements that you can only detect if you are selecting and implementing an ERP on a daily basis…Other mistakes companies make [are] to look purely from ERP lenses and not considering the enterprise architecture…[and] to focus on too many factors that might not be as critical.”

Purchasing Considerations

As the experts we spoke to mentioned above, it’s a common mistake for ERP software buyers not to spend enough time planning. Here are a few questions to think about that can help you determine business needs and mitigate your ERP software’s total cost of ownership (TCO).

What will our business look like in the future?

When shopping for an ERP solution, you need to think about how your business operations might change over time. Verify that your next system can handle added users when your business grows and you hire more staff. You should also check to see if your vendor offers modules you don’t need now but might later.

What will our vendor look like in the future?

It’s important to look at what your prospective ERP software will look like over time as well. Be sure to examine how your vendor’s support system will help you both during and after implementation. Creating an ERP implementation checklist can help you determine what support you need and at what prices you can reasonably afford.

Who will use the system most often?

Asking your employees how software might help or hinder their workflow is key to figuring out how much of your company will actually make use of it. The number of users can have a significant impact on price and time to onboard.

Which requirements are most important to our business?

If you’re reading this article, you’re already asking yourself this question and should have an idea of which features your business does and doesn’t need. If you need more help, SelectHub offers a free ERP software comparison report to help you directly contrast software platforms’ capabilities.

Does the vendor possess specialized industry knowledge?

Different vendors have experience working in different industries, so you’ll want to choose an ERP software provider that understands what your business must deal with on a daily basis. Some more generalized software needs may help you save money, but in the long run, you’ll benefit more from a platform that meets your industry requirements.

Does the vendor provide adequate post-implementation support?

Many vendors, especially those offering software-as-a-service (SaaS) implementations, provide training resources and external tech support as long as you have a license to their software. On-premise deployment will likely require you to train your own staff, but vendors often have valuable training resources to help with this.

Which deployment option do we want?

Be sure to add the platform implementation – cloud, on-premise, or hybrid – to your ERP requirements checklist, depending on your business needs.

Cloud deployments are hosted on the vendor’s server, but permit you to access them from any connected device with data encryption measures to protect sensitive information. On-premise deployments are installed on a machine in-office, giving you more control over the implementation, and hybrid deployments merge qualities from on-premise and cloud in one package.

How big is our budget?

ERP programs can cost anywhere from $100 to $100,000, depending on the factors listed above. For example, SaaS providers will have a lower cost of entry, but you’ll need to pay a subscription fee over time, which may add up. You should also consider training and integration costs.

Do we need a new system or add-ons for our current one?

If you already have an ERP system in place, opting for add-on modules rather than a whole new system may be a cost-effective upgrade. However, you’ll want to consider whether a new system might be worth the investment in the long run.

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How To Choose the Right ERP System

With your ERP requirements template in place, it’s important to come up with a selection process that helps you narrow down your options. SelectHub recommends using the Lean Selection methodology. These steps give you the proper foundation to pick your ideal ERP.

• Establish: Determine why you need a new solution and take inventory of what your current system does.
• Collaborate: Put together a selection group of relevant people within your company to get a better sense of what you’re looking for in the system.
• Define: Write up a requirements list that suits everyone’s needs.
• Distribute: Score how well potential vendors meet your requirements.
• Justify: Gather the scores in the previous stage and determine whether you want to move forward and get a brand new system, invest in supplemental features that your current system lacks, or stick with your current system and end your search here.
• Prove: Reach out to vendors to test-drive their products.
• Rank: Review and rank vendors according to their requirements and demo scores. You should have at least two to three potential vendors you’re considering signing with and implementing.
• Negotiate: Sit down with your ideal vendor and review their contract. If you can’t negotiate agreeable terms, move to the next vendor on your list.
• Sign: Close the deal, sign the contract, and get started implementing your new software system.

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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