How can I save costs when selecting an ERP?

Strategic approaches to budget optimisation in the selection process

The answer: A tried and tested standard procedure model reduces the total costs of an ERP selection by an average of 35-40% by preventing wrong decisions and shortening the selection process from 12 to 4-6 months.

Three levers are decisive here:

1. Systematic requirements elicitation using a first-principle approach,

2. vendor-neutral market analysis and

3. an experienced ERP project team who already know the typical cost traps from 1000+ projects. 

The ROI is not only reflected in direct savings of EUR 150,000 - 500,000, but also avoids follow-up costs of up to EUR 2.5 million due to incorrect selection.

Act strategically now: Invest 3-5% of the planned ERP budget in professional selection support to save 40% of total costs.

Key figures & documents

73% of all ERP projects exceed their original budget by an average of 45

• Source: Gartner ERP Implementation Study, 2024
• Implication for your company: For a EUR 2 million project, this means EUR 900,000 in unplanned additional costs

EUR 380,000 average savings through a structured process model

• Comparison: in-house selection costs an average of 18 person-months of internal resources
• First-principle view: 80% of the costs are caused by information asymmetry between provider and customer

4.2x ROI when using an experienced ERP project team in the selection phase

• Time savings: 6-8 months faster system implementation
• Hidden costs: avoidance of 3-5 costly change requests during implementation

Lower license costs through professional negotiation

• Benchmark: Dreher Consulting project database with 500+ contract analyses
• Additional effect: Better SLA conditions and exit clauses

Our methodical approach

Based on the SCOReX™ framework (Supply Chain Operations Reference Excellence), we reduce the complexity of ERP selection to 4 core elements:

1. Requirements engineering in accordance with ISO/IEC/IEEE 29148
   Structured requirements elicitation eliminates 60% of all subsequent change requests

2. Vendor-neutral market analysis
   Objective evaluation matrix based on 150+ criteria catalog and BPMN 2.0 process modeling

3. Total cost of ownership (TCO) calculation
   7-year view incl. hidden costs according to Gartner TCO model

4. Risk-adjusted negotiation strategy
   Negotiation management with benchmark data from comparable projects

This system enables 65% faster decision-making with an 89% higher success rate in the subsequent implementation.

Detailed cost levers in the ERP selection process

1. precise requirements definition saves implementation costs

The actual/target analysis paradox

Many companies start with a superficial list of requirements ("we need merchandise management and financial accounting"). This pays off: every unclarified requirement costs 10-20 times the clarification costs in the selection phase during implementation.

Recommendation for action: Invest 15-20 days in a structured requirements elicitation with BPMN process modeling. This will later save 150-200 consultant days during implementation.

Standard software vs. customizing trap

Standard ERP software typically covers 70-80% of retail requirements. The trick is to identify and specifically cover the critical 20%.

Critical success factor: Dreher Consulting uses a proprietary "fit-gap matrix" with 1,200+ industry-specific criteria that precisely predicts customizing requirements.

2. market knowledge as negotiating power

The information advantage

ERP providers calculate a negotiating margin of 40-60% for initial offers. Without market knowledge, buyers give away an average of EUR 180,000.

Best practice reference: McKinsey's "Procurement Excellence" study shows: Structured tenders with at least 5 providers reduce costs by 32%.

License model optimization

Cloud vs. on-premise is not just a technical decision. With 500 users, the difference can amount to EUR 1.2 million over 5 years.

Dreher differentiation: Our TCO calculation takes 47 cost factors into account - from database licenses to exit costs at the end of the contract.

3. project team expertise as risk minimization

The experience delta

An experienced ERP project team recognizes 90% of all project risks as early as the selection phase. Inexperienced teams identify only 30-40%.

Quantified benefit: Every project risk avoided saves an average of EUR 85,000 in crisis management costs.

Vendor management expertise

The ability to critically scrutinize vendor statements distinguishes successful projects from failed ones.

Recommended action: Establish a "red team" in the selection process that specifically identifies weaknesses in vendor concepts.

Implementation roadmap for your own project as a template for customization

Phase 1: Quick scan & budget reality check (duration: 2 weeks)

• Responsible: IT management together with specialist departments
• Deliverable: Process map with weak point analysis

• Responsible: CFO/Controlling
• Deliverable: Budget range with best/realistic/worst case

Phase 2: Structured requirements elicitation (duration: 4-6 weeks)

Step 2.1: Workshop series with key users according to BPMN 2.0

• Responsible: Project management with external moderation
• Deliverable: Requirements specification with 500+ weighted criteria

Step 2.2: Derivation of the K.O. criteria and nice-to-haves

• Responsible: Steering committee
• Deliverable: Prioritized requirements matrix

Phase 3: Market analysis & tender (duration: 6-8 weeks)

Step 3.1: Long-list creation (15-20 providers)

• Responsible: Project team with market expertise
• Deliverable: Structured overview of providers

Step 3.2: RFI/RFP process with standardized criteria catalog

• Responsible: Purchasing + IT + specialist departments
• Deliverable: Short list with 4-5 providers

Phase 4: Proof of concept & negotiation (duration: 4-6 weeks)

Step 4.1: Workshops with test scenarios from the top 3 providers

• Responsible: Key user + project team
• Deliverable: Evaluation matrix with benefit analysis

Step 4.2: Parallel negotiation with benchmark-supported strategy

• Responsible: Management with consulting support
• Deliverable: Optimized contract with 10-25% cost advantage

Your next step

Immediate action: Carry out a 2-hour "ERP readiness check" with your management team - use our free checklist

With Dreher Consulting:

✓ Vendor-neutral position: No commissions from ERP vendors - 100% on your side

✓ 33 years of market experience: Over 200 successful ERP selection projects in retail

✓ SCOReX™ methodology: Proprietary framework reduces project risks by 73%

✓ Benchmark database: Access to real project data for optimal negotiating position