Did you know? 75% of ERP projects fail due to poor planning. With ERP costs averaging $9,000 per user, getting your requirements right is critical.
Key Steps for ERP Success:
- Involve Stakeholders: Build a team with executives, department heads, IT, and end users to ensure all needs are covered.
- Map Current Workflows: Document processes, identify inefficiencies, and focus on business needs – not just replicating old systems.
- Prioritize Features: Focus on production planning, inventory control, and compliance to enhance efficiency and meet industry standards.
- Set a Budget & Timeline: Allocate 1-2% of annual revenue and plan for a 4-8 month implementation process.
- Evaluate ERP Options: Compare solutions using a requirements matrix and ensure vendor support aligns with your goals.
Quick Tip: Use your checklist to align ERP features with measurable goals like reducing manual data entry by 50% or cutting inventory costs by 75%.
Start with these steps to avoid delays, budget overruns, and poor system fit. Your ERP success begins with proper planning.
How to Build an ERP Requirements Gathering Document | FREE TEMPLATE
Step 1: Select Project Stakeholders
Building the right team is crucial when defining ERP requirements. By involving key stakeholders early, you increase the chances of a successful project rollout [3]. Here’s a breakdown of the roles you’ll need and how they contribute.
Who Should Be on the Team?
To gather well-rounded input, your ERP requirements team should include members from all corners of the organization. Below is a suggested team structure:
| Role | Responsibilities | Key Contributions |
|---|---|---|
| Executive Sponsor | Oversees the project and allocates resources | Ensures strategic alignment and approves budgets |
| Project Manager | Manages daily tasks and timelines | Coordinates the team and documents requirements |
| Department Heads | Represent the needs of their business units | Share workflows and highlight pain points |
| IT Team Lead | Handles technical requirements and integration | Focuses on system compatibility and infrastructure |
| End Users | Provide insight into daily operations | Identify practical functionality needs |
| Change Management Lead | Develops user adoption strategies | Addresses training needs and resistance |
Once the team is in place, the next step is to align everyone on the project’s goals for a smooth and effective requirements-gathering process.
Setting Goals for the Team
Clear goals and communication can increase user adoption rates by up to 20% [3]. To get everyone on the same page, follow these steps:
- Define Specific Objectives: Set measurable targets for each department to guide their input.
- Establish Communication Protocols: Schedule regular meetings and set up clear reporting structures.
- Create a Decision-Making Framework: Decide how to resolve conflicts and prioritize requirements.
- Document the Process: Keep everything transparent by recording how requirements are collected and validated.
Here are a few ways to avoid miscommunication during the process:
- Hold weekly cross-functional meetings to keep everyone updated.
- Use shared documents that allow real-time input and collaboration.
- Set up feedback channels to gather insights from all team members.
- Schedule regular check-ins with department heads to address concerns early.
The key is to select team members who not only understand their department’s needs but also have a company-wide perspective. This balance ensures that the ERP system serves the organization as a whole [2].
Step 2: Map Current Workflows
Once you’ve identified your project stakeholders, the next step is to map out your current workflows. This process helps you clearly understand how things operate today and what your ERP system will need to address. Visual tools are especially helpful here, as they make it easier to grasp the complexities of your processes and pinpoint areas for improvement [4].
Production Process Mapping
To start, document your core manufacturing workflows. Here’s a quick guide to help you break it down:
| Process Stage | Key Activities | Documentation Focus |
|---|---|---|
| Primary Operations | Order fulfillment, procurement | Task sequence, handoffs, timelines |
| Support Functions | Inventory management, quality control | Dependencies, resource allocation |
| Management Tasks | Reporting, oversight | Decision points, approvals |
| Integration Points | Data flows, system connections | Input/output requirements |
When creating these maps, prioritize these three steps:
- Current State Documentation: Lay out what’s happening now. Include details like who performs each task, what actions are taken, and how long everything takes. This will serve as your baseline.
- Cross-Functional Input: Work with teams from different departments to ensure your maps are accurate and to uncover any inconsistencies.
- Technology-Agnostic Approach: Focus on the business functions themselves, not the tools you currently use. This helps you identify what’s truly needed, rather than just replicating old systems.
These maps are essential for spotting inefficiencies and setting clear goals for improvement.
Problem Areas Analysis
Once your workflows are mapped, use them to identify where things are going wrong. Visualization makes it easier to zero in on problem areas. Here’s what to look for:
- Bottleneck Identification
Pinpoint where things slow down. Common culprits include:- Delays in handoffs between departments
- Limited resources causing backups
- Information not flowing smoothly
- Manual data entry slowing processes
- Waste Detection
Examine your workflows for inefficiencies like:- Tasks that are repeated unnecessarily
- Approvals that don’t add value
- Duplicate data entry
- Long wait times that hold up progress
- Process Validation
Use your findings to structure improvements by:- Categorizing tasks (essential, useful, optional, or unnecessary)
- Identifying the root causes of inefficiencies
- Documenting areas where changes could make a difference
- Prioritizing improvements based on their potential business impact
Step 3: List Manufacturing Features Needed
Identify the ERP features your manufacturing operation needs. With the right ERP system, manufacturers can cut lead times by up to 95% and significantly boost efficiency [6].
Production Management Needs
Your ERP system should cover the entire production lifecycle. Here’s what to prioritize:
| Feature Category | Key Requirements | Business Impact |
|---|---|---|
| Production Planning | • Bill of Materials (BOM) management • Capacity planning • Work order management |
Cuts planning time and improves accuracy |
| Shop Floor Control | • Real-time production monitoring • Quality checkpoints • Machine utilization tracking |
Boosts operational efficiency by up to 30% [6] |
| Maintenance | • Preventive maintenance scheduling • Repair activity tracking • Spare parts management |
Reduces downtime and extends equipment lifespan |
| Quality Management | • Quality control automation • Compliance tracking • Inspection checklists |
Maintains consistent product quality |
An ERP system should also allow for flexible scheduling and process adjustments to respond to changing demand levels [5]. For example, Hammond Group, a chemical manufacturing firm, reduced IT costs by 39% in their first year after implementing an ERP solution tailored to these production needs [5].
To complement production management, robust inventory control features are essential.
Inventory Control Requirements
Efficient inventory management is critical to maintaining smooth production. Focus on these key features:
- Real-Time Tracking Capabilities
Gain instant visibility into inventory across all locations, including raw materials, work-in-progress, and finished goods. Companies often report a 75% drop in inventory costs after adopting ERP inventory controls [6]. - Automated Alerts and Reordering
Your system should:- Automatically trigger reorders
- Monitor stock levels
- Send low-stock alerts
- Calculate optimal order quantities
- Batch and Lot Control
Look for tracking features such as:- Serial number tracking
- Expiration date management
- Batch genealogy
- Quality hold capabilities
- Recall management tools
ERP systems that provide real-time data and seamless coordination between production and inventory management help eliminate waste and improve overall efficiency [5].
"An ERP system is a critical part of any manufacturing business" [6]
These outlined requirements will guide you in evaluating ERP options effectively. For manufacturers seeking an integrated solution, Procuzy (https://procuzy.com) offers tools to streamline operations and enhance productivity.
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Step 4: Define Tech and Compliance Specs
Once you’ve outlined your production and inventory needs, it’s time to tackle the technical and compliance specifications. This step is crucial to ensure smooth operations and regulatory adherence.
Focusing on both technical requirements and compliance standards is essential. Poor system integration can lead to data silos and inefficiencies, which can disrupt manufacturing workflows [1].
Software Integration Needs
For your ERP implementation to succeed, it must seamlessly integrate with your existing technology stack. Integration touches various components, each with specific requirements and operational impacts:
| Integration Type | Key Requirements | Impact on Operations |
|---|---|---|
| Equipment Integration | • IoT connectivity • Real-time data processing • Structured input channels |
Enables real-time production monitoring |
| Business Software | • API capabilities • Native connectors • Middleware support |
Simplifies data flow across systems |
| Data Management | • High-volume data ingestion • Event-driven architecture • Customizable response logic |
Improves system responsiveness and adaptability |
ERP platforms like Procuzy come equipped with tools such as built-in APIs, native connectors, and middleware to facilitate real-time data exchange.
For instance, Zebra Technologies implemented an integrated ERP solution in 2023, automating 90% of their orders. This move saved them 20,000 hours annually and cut freight costs by $2 million by optimizing transportation management [7].
"A structured and granular set of requirements allows for defining and scoping techno-functional needs. It also enables the assignment of multi-level priorities and weightage to each requirement or group of requirements." – Kankana Kalita, Research Analyst, SelectHub [7]
Additionally, your ERP should align with industry-specific compliance standards to meet regulatory requirements effectively.
Industry Standards Checklist
In the U.S., manufacturing regulations are frequently updated [9], making automated compliance management a must-have for staying on top of these changes.
Here are some key compliance requirements based on different manufacturing sectors:
| Manufacturing Sector | Required Standards | Key Features Needed |
|---|---|---|
| Pharmaceutical | GMP, FDA requirements | Batch validation, quality control |
| Chemical | REACH, GHS documentation | Safety data management |
| Aerospace | ISO 9001, AS9100 | Quality management system |
| Food & Beverage | HACCP, FSMA | Food safety tracking |
| Electronics | IPC, RoHS | Component traceability |
| Medical Devices | ISO 13485 | Risk management |
An effective ERP system should automate tasks like documentation, quality management, and traceability. This minimizes manual effort and ensures that your operations consistently meet industry standards [8].
Step 5: Set Budget and Timeline
Research shows that many ERP projects fail due to inadequate planning [15]. To avoid this, make sure your budget and timeline align with the goals you’ve already established. Start by breaking down your costs and creating a realistic schedule.
Cost Breakdown
A good rule of thumb is to allocate 1-2% of your annual revenue for your ERP budget [14]. Here’s a closer look at the main cost components:
| Cost Category | Typical Range | Includes |
|---|---|---|
| Software Licensing | $120/user/month | Core ERP features, modules, and user access |
| Implementation Services | 100-200% of license fee | Configuration, data migration, testing |
| Training & Support | 10-15% of total budget | Employee training, ongoing technical support |
| Infrastructure | Varies by deployment | Hardware, networking, and security measures |
| Contingency Fund | 10-15% of total budget | Unplanned costs, scope changes |
For mid-sized businesses, ERP costs typically range from $150,000 to $750,000 [10]. Here’s the average budget per user based on company size:
- Small businesses: $7,143 per user
- Mid-sized businesses: $8,542 per user
- Large businesses: $7,257 per user [11]
"Implementing a new ERP system is one of the most extensive – and expensive – projects you can take on as a manufacturer." – Genius ERP [14]
Once you’ve outlined your costs, focus on building a timeline that fits your project milestones.
Project Schedule Planning
On average, ERP implementations take about 4-8 months to complete [12]. For example, the City of Tampa managed to finish their implementation in 10 months by opting for an out-of-the-box system, which eliminated 8,500 customizations from their previous setup [13].
Here’s a typical timeline breakdown:
| Implementation Phase | Duration | Key Activities |
|---|---|---|
| Pre-Implementation | 1-2 months | Requirements gathering, vendor selection |
| Core Implementation | 3-4 months | System configuration, data migration |
| Testing & Training | 1-2 months | User acceptance testing, staff training |
| Go-Live & Stabilization | 1-2 months | System launch, initial support |
To keep your timeline on track:
- Set a clear go-live date and allow time for thorough testing.
- Build in buffer time to handle unexpected challenges.
- Ensure resources are available during key phases.
- Avoid scheduling transitions during high-demand production periods.
With proper budgeting and scheduling, you’ll set the foundation for a smoother ERP implementation process.
Step 6: Review ERP Options
Once you’ve finalized your budget and timeline, it’s time to assess ERP solutions against your specific needs. This step connects the dots between what your business requires and what the software can deliver.
Manufacturing Features Review
Start by building a detailed evaluation matrix using the requirements you’ve gathered earlier. This helps you systematically compare features and their relevance to your operations:
| Feature Category | Critical Requirements | Verification Method |
|---|---|---|
| Production Planning | • Material requirements planning • Capacity scheduling • Work order management |
Test through live demos using your production scenarios |
| Inventory Control | • Real-time tracking • Multi-location support • Batch/lot tracking |
Run tests with sample inventory data |
| Quality Management | • Quality control checkpoints • Compliance tracking • Version control |
Examine regulatory compliance capabilities |
| Supply Chain | • Purchase order automation • Supplier collaboration • Demand forecasting |
Simulate processes using sample procurement data |
"A structured and granular set of requirements allows for defining and scoping techno-functional needs. It also enables the assignment of multi-level priorities and weightage to each requirement or group of requirements."
- Kankana Kalita, Research Analyst, SelectHub [7]
Implementation Support Review
To ensure smooth deployment, evaluate the vendor’s expertise and support offerings. Focus on these critical areas:
| Support Aspect | What to Verify | Why It Matters |
|---|---|---|
| Implementation Team | Presence of a dedicated project manager and clear team structure | Ensures consistent communication and accountability |
| Training Programs | Availability of customized training materials and schedules | Helps users adapt quickly and reduces transition challenges |
| Post-Launch Support | Defined response times and escalation procedures | Minimizes downtime and operational hiccups |
| Documentation | Comprehensive user guides and technical manuals | Enables self-service troubleshooting and reduces dependency on vendor support |
Additionally, check how well the ERP integrates with your existing tools, such as:
- eCommerce platforms
- CRM systems
- Quality control software
- Business intelligence tools
- EDI capabilities
Keep in mind that ERP implementations often take 30% longer than planned [16]. Build this buffer into your timeline and lean toward vendors that offer robust support packages, including both implementation assistance and ongoing maintenance.
When choosing an ERP, aim to align your selection with your manufacturing objectives. Cloud-based solutions like Procuzy stand out with features such as real-time inventory tracking, production planning, and integrated procurement. These tools can serve as a solid foundation for more efficient and streamlined operations.
Conclusion: Using Your Requirements Checklist
A well-thought-out ERP requirements checklist can be a game-changer, especially when ERP failure rates hover between 40% and 90% [19].
To make the most of your checklist, consider turning it into an evaluation matrix. This helps prioritize features based on their importance and impact:
| Priority Level | Evaluation Criteria | Business Impact |
|---|---|---|
| Critical | Performance initiatives | Direct impact on core operations |
| Important | Operational efficiency | Streamlines daily workflows |
| Desired | Future capabilities | Supports growth objectives |
Most companies stick with their ERP systems for 5–10 years before considering an upgrade [20]. This means you need to plan for both immediate functionality and future scalability. As Tom Stephenson points out, careful planning during the early stages can save significant headaches later [18].
Here are some strategies to ensure your checklist works effectively:
- Process Alignment
Start by evaluating your current workflows and let them guide your ERP selection. Avoid forcing the software to fit outdated processes. Experts often note that most ERP systems come with built-in best practices, making it smarter to adapt your procedures to the software’s design rather than the other way around. - Future-Proofing
Don’t forget to include scalability in your checklist. Whether you’re looking at industry-specific ERP systems for specialized needs or horizontal solutions for entering new markets, think long-term [17].
Your ERP system should also give you a competitive edge. For example, cloud-based solutions like Procuzy offer modern features such as real-time inventory tracking and integrated procurement – ideal for today’s manufacturing landscape.
Finally, treat your checklist as a living document. Keep updating it during pre-implementation to align with evolving business goals [2]. This approach ensures your vendor selection process stays focused on both current needs and future growth opportunities.
FAQs
Why do ERP projects often fail, and how can gathering clear requirements help prevent this?
ERP implementations often stumble because of vague business requirements, inadequate planning, overly ambitious deadlines, or lack of proper training and support. One of the biggest missteps? Not aligning the ERP system’s features with the organization’s real-world processes. This mismatch can trigger delays, blow through budgets, and leave critical goals unmet.
To steer clear of these issues, it’s crucial to start with clear and thorough requirements gathering. Take the time to analyze your current workflows, pinpoint future needs, and engage key stakeholders in the process. This approach helps you craft a detailed roadmap, ensuring the ERP system is aligned with your business operations. The result? Fewer scope changes and a much smoother path to a successful implementation.
How can I prioritize ERP features to align with my business goals effectively?
To choose the right ERP features, start by pinpointing your main business objectives – whether it’s streamlining operations, cutting costs, or boosting customer satisfaction. Take the time to define these goals clearly and make sure everyone involved agrees on what success should look like.
Once your goals are set, zero in on the ERP features that directly align with them. For instance, if improving inventory management tops your list, look for features like real-time inventory tracking, automated stock alerts, and demand forecasting. It’s also essential to involve teams from across the organization in this process. Their input ensures the system addresses the needs of different departments, making it easier for everyone to adapt to the new system.
By focusing on your business goals and bringing stakeholders into the conversation, you can select an ERP system that adds real value and supports your company’s future growth.
How can we ensure effective collaboration and communication with stakeholders during ERP implementation?
To make sure your ERP implementation runs smoothly, start with a solid communication plan. This plan should detail how you’ll share updates, project goals, timelines, and any changes with everyone involved. Regular updates and chances for feedback are key to keeping stakeholders in the loop and addressing any concerns right away.
Get stakeholders involved early by inviting them to workshops, surveys, or meetings. This not only encourages their support but also lets their input influence the project. Open communication and active involvement help build trust, minimize pushback, and create a more collaborative environment during the implementation process.
