Selecting an ERP system is a pivotal step in your business's growth journey. For Canadian SMBs looking to move beyond spreadsheets or manual processes, this article will outline key considerations to help you make an informed decision. Whether you're managing finances with basic tools or working with third-party services, the insights here will help you through the ERP selection process.

Now, before we get started, let’s be upfront: this isn’t a sales pitch. We’re not here to push any ERP systems or services on you. Instead, we’re here to genuinely help answer the questions SMBs typically have when choosing an ERP.

Assess your business needs

The first step in choosing the right ERP is understanding your core business needs. Take time to evaluate your current workflows - where are the bottlenecks slowing your team down? Perhaps it's hours spent on manual data entry, or invoice approvals getting stuck in endless email threads.

These pain points will help identify which ERP features are truly essential for your organization. Rather than trying to solve every operational challenge at once, focus on your most pressing issues first, whether that's streamlining accounting processes or getting better control of inventory. As your business evolves, additional modules can be added to meet growing needs.

According to a recent study, the top motivations for implementing an ERP system include the need for better features, automating processes, and improving efficiency.

Planning your investment

When establishing your ERP budget, consider the full scope of the investment. Costs often vary based on factors like user types, number of modules needed, and whether the system is cloud-based or on-premises. For growing businesses, cloud-based ERP solutions often prove more cost-effective due to lower initial costs and scalability. They allow you to expand as your business grows without requiring significant hardware investments. Consider both immediate costs and long-term factors like maintenance, support, and potential customization needs.

💡 Important findings: Most ERP implementations cost three to four times the initial budget, and can take 30% longer than anticipated.

Technical requirements

The technical aspects of an ERP system directly impact its effectiveness. Look for solutions offering intuitive interfaces and customizable workflows - even the most sophisticated system won't deliver value if your team struggles to use it. Consider how the ERP will integrate with your existing tools like CRM or payroll software.

Many businesses already rely on specific tools, making seamless integration crucial for preventing redundant data entry and ensuring real-time information sharing across departments. Additionally, while your business may be small now, choose a system that can scale with you. Many modern ERPs offer modular approaches where you can start with core features and add capabilities as your business grows.

Choosing the right vendor

Selecting the right vendor is just as crucial as choosing the right software. Look for partners with proven experience serving Canadian SMBs and a strong track record in your industry. Research vendor reviews thoroughly on platforms like G2, Gartner Peer Insights, and Capterra to understand their performance and reliability.

Speaking with professionals in similar roles - accountants, controllers, or bookkeepers - who have gone through this process can provide invaluable insights into what working with different vendors is really like. Strong vendor support during and after implementation often makes the difference between success and frustration.

Prioritize data security and compliance

Data security should be a top priority when choosing an ERP system. Your solution will house sensitive financial and operational data, making robust security features and compliance with Canadian privacy regulations essential. Look for systems offering strong encryption, user access controls, and compliance with privacy regulations like PIPEDA.

When planning the move from your current systems, treat it like relocating to a new office - it's an opportunity to organize and clean up your data. Taking time to eliminate outdated or duplicate records before migration will save countless hours of troubleshooting later.

Implementation strategy

For smaller teams, implementation success comes down to setting realistic expectations and timelines. Consider taking a phased approach - start with core functionalities that address your immediate needs, then gradually expand as your team becomes comfortable with the system. Determine who will lead the project internally, what kind of vendor support you'll need, and what training will be necessary. Some businesses choose to hire ERP consultants to help guide the implementation, which can free up internal resources and ensure a smoother transition.

Did you know? A 2023 survey of retailers, manufacturers and distributors found businesses that hired a software consultant to implement their new ERP or business system achieved a success rate of 85%.

Some of the top ERP solutions with significant market shares in North America include NetSuite, Microsoft Dynamics 365, Infor, Sage, Workday, Epicor, and Acumatica, known for their comprehensive features tailored to diverse business needs.

Selecting the right ERP system is a critical decision that can have long-term benefits for your business. By assessing your needs, setting a budget, and considering factors like usability, scalability, and data security, you can find an ERP that not only meets your current needs but also supports future growth. Take the time to thoroughly evaluate your options, and you’ll set your business up for success.