On what basis do you sign a ten-year ERP contract?

Key points Evaluation matrices with weightings often confirm a preliminary decision that has already been made; the choice becomes reliable through knockout criteria, justified point allocations and a sensitivity check of the weights.

By Dr. Harald Dreher Published: Aug 11, 2026 7 min read

Key points

Evaluation matrices with weightings often confirm a preliminary decision that has already been made; the choice becomes reliable through knockout criteria, justified point allocations and a sensitivity check of the weights.
Stage gates are pre-agreed checkpoints with the options to continue, renegotiate or cancel – agreed before the contract is signed, not during the running project.
An ERP contract should include acceptance criteria drawn from your own test cases, change-request rules with an approval procedure, exit options for each project phase and conclusively described client obligations.
A documented decision paper with options, criteria and assumptions makes the ERP decision verifiable for the advisory board, bank and your own organisation – even years later.
Dreher Consulting has supported ERP decisions on a vendor-neutral basis since 1992: over 1,200 projects in the DACH mid-market, without implementation revenues and without vendor commissions.

Series "ERP Decision Confidence", Article 2 of 3 · By Dr. Harald Dreher · Last updated 4 August 2026

What goes wrong with the ERP decision and contract signing?

How much control a company retains in its ERP project is decided between vendor selection and signing the contract. In practice, the choice is justified with an evaluation matrix whose weights no one has checked, and the vendor's draft contract is signed largely unchanged. Termination points, acceptance criteria and change-request rules remain undefined – until they are missing in the project.

The study "ERP in Practice 2024/25" (Trovarit AG, 2024) names a lack of budget adherence as one of the biggest problems – budget adherence is determined by contractual rules, not by good intentions.

A common misconception is: "The vendor's standard contract is typical for the market and little can be changed about it." Before signing, almost everything is negotiable – afterwards, almost nothing.

Why do evaluation matrices often confirm the preliminary decision?

Evaluation matrices appear objective, but they are easily steered: whoever selects the criteria, sets the weights and awards the points determines the result. If the criteria catalogue is taken from the preferred vendor's template, the matrix confirms the preliminary decision. A ranking that flips with small changes in weighting cannot carry a million-euro decision.

Vendors produce the documents on which the buyer bases the ERP decision: the draft contract, the price list and often the criteria template for the matrix. They are paid for closing the deal, not for the accuracy of their forecasts. This structural asymmetry of incentives is not dishonesty. But it explains why convincing decision papers and disappointing project outcomes so often describe the same project.

How we made ERP decisions robust in client projects

Two projects illustrate Dreher Consulting's approach in the decision and contract phase – one in the food industry and one in manufacturing. Both practice cases follow the same pattern: situation, findings, approach, result, our own misjudgement and the consequence for the methodology. We do not disclose client names for confidentiality reasons.

Both practice cases follow the same pattern

Situation

Findings

Approach

Result

Misjudgement

Consequence

Practice case 1: An evaluation matrix crowned the vendor that was already decided

A food-industry company in Italy had compared two ERP vendors using a weighted evaluation matrix; the project management's preferred vendor won by a narrow margin. The advisory board doubted the derivation and demanded an auditable decision paper. Dreher Consulting reviewed the matrix, rebuilt the evaluation and documented the decision.

Situation. Food industry, around 600 employees. Phase: vendor decision before approval by management. Trigger: management and the shareholder refused approval on the basis of the selection matrix.

What we found. Parts of the criteria catalogue came from a template provided by the preferred vendor. The sensitivity check showed that small changes to individual weights reversed the ranking. The point allocation was nowhere justified.

What we specifically did. Criteria checked for origin, knockout criteria from the requirements catalogue added; each point allocation justified in writing; sensitivity documented; a decision paper with options, assumptions and risks produced – carried out within just under six weeks.

What came of it. The ranking remained the same, was now justified and withstood the advisory board's review; approval was granted with conditions. Key figures for inventory and packaging management were incorporated into the contract with cost reductions of 17 % and 21 % respectively and defined as a deliverable and service for process optimisation by the software vendor.

What we initially misjudged. At first we thought the matrix could be repaired. In fact the criteria catalogue itself was the weak point – we spent too long fine-tuning instead of rebuilding from scratch.

What we changed as a result. Since then we first check the origin of the criteria and only afterwards the weights and points. The sensitivity check has been part of every evaluation ever since – giving the basis and the conclusions a robust foundation for management decisions.

Practice case 2: A signature-ready contract with no acceptance criteria and no exit

A manufacturing company was on the verge of signing: the vendor's draft contract was on the table, and a discount was tied to a deadline at the end of the quarter. Dreher Consulting reviewed the draft on the merits, brought stage gates and acceptance criteria into the negotiation and documented the decision for management and the bank.

Situation. Production and assembly in the building-trades sector with a total of four affiliated companies. Phase: contract negotiation, signing scheduled. Trigger: management's uncertainty about the decision paper (the ERP contract) – it did not want to sign the contract without review.

What we found. The draft contained no measurable acceptance criteria, no change-request process and no exit option after the concept phase. The client obligations were loosely worded – almost every project risk sat with the commissioning company.

What we specifically did. Acceptance criteria linked to the test cases from the decision dossier; a stage gate after the concept phase with a right of exit at limited cost negotiated; a change-request process with approval thresholds defined – handled within three weeks as a self-contained consulting engagement.

What came of it. We recommended letting the time-limited discount deadline lapse – against the resistance of procurement. The contract was signed with gates, acceptance criteria and limited client obligations. After the review by our independent ERP consultants, the one-sidedness to the client's detriment had been eliminated from the contract design.

What we initially misjudged. We had expected the vendor to reject the acceptance criteria. Instead, the resistance came from the client's own procurement, which wanted to secure the time-limited discount.

What we changed as a result. Since then we clarify discount deadlines at the start of every contract engagement. Coordination with procurement has been part of the first week ever since.

How do stage gates and contract rules get in place before signing?

A stage gate is a pre-agreed checkpoint at which the project only continues if named criteria are met – with the options to continue, renegotiate or cancel. Stage gates and contract negotiation are the second and third building blocks of Dreher Consulting's "ERP Decision Confidence" model, alongside the decision dossier, project support and benefit assessment.

Step 1 · Define the decision architecture

With the DAA™ (Decision Architecture Assessment) we clarify who makes the decision, who must approve it and who is consulted. A decision with unclear owners can later be neither defended nor corrected.

Step 2 · Make the evaluation auditable

Separate knockout criteria from weighted desired criteria, justify each point allocation in writing, test sensitivity. Stopping condition: if the ranking flips with small changes in weighting, the matrix does not carry the decision.

Step 3 · Define stage gates

One checkpoint per project phase with named criteria, documents and consequences. A gate without agreed exit consequences is a deadline, not a checkpoint.

Step 4 · Negotiate contract rules

Four regulatory areas determine controllability: exit options, change-request process, acceptance criteria and client obligations – each documented with its purpose and a review question.

Step 5 · Document the decision

The decision paper records options, criteria including their origin, assumptions, risks and justification – auditable for the advisory board, bank and your own management even in three years' time.

Step 6 · Agree how gates are run

The stage-gate protocol defines who convenes gate meetings, which documents must be available and how escalation works. Without a designated operation, gates decay into a formality in day-to-day project work.

Four contract areas that determine the controllability of the ERP project

Exit options

Exit for each project phase at contractually limited cost – especially after the concept phase.

Change-request process

Defined: who approves changes, how they are priced and where they are documented.

Acceptance criteria

Measurable and derived from your own test cases – the basis for proving poor performance.

Client obligations

Conclusively described instead of "appropriate cooperation" with no definition.

Seven review questions: will your ERP decision withstand scrutiny?

Seven review questions show whether an ERP decision will withstand the advisory board, the bank and your own hindsight. The questions cover evaluation, contract and governance. Answer each question in writing and with evidence: every "no" and every "don't know" marks a gap that must be closed before signing.

Could you show the advisory board or bank, with documents, why the runner-up vendor was not chosen?
Does the ranking of your evaluation matrix flip if individual weights are changed slightly?
Do the acceptance criteria in the draft contract come from your test cases or from the vendor's template?
Is it defined who approves change requests, how they are priced and where they are documented?
Can you exit after the concept phase at contractually limited cost?
Are your client obligations conclusively described – or do you owe "appropriate cooperation" with no definition?
Is it recorded in writing who makes the decision and who merely approves it?

Assess your decision situation

If your ERP decision is due in the coming months, we will assess your situation in a 30-minute conversation: where the basis for the decision stands, which contract points are still open, and what remains to be clarified before signing. No presentation, no obligation.

Book a 30-minute orientation call

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What can software and AI do for the ERP decision – and what can't they?

In the decision and contract phase, software and AI improve the information base – they do not automate the consultant's judgement. Tools reliably handle data preparation, completeness checks of draft contracts and pattern recognition in contract data. They cannot weigh conflicting objectives, assess people and organisations, or take responsibility for the recommendation.

For this, Dreher Consulting uses SCOReX®, its own AI model for avoiding risk in ERP projects. Whether an exit clause serves the company's interests is assessed by a named consultant – not by a model.

Where this approach reaches its limits

Stage gates and contract rules reduce risks; they do not eliminate them. The approach assumes that cancelling at a gate is a real option, that there is still room to negotiate before signing, and that a law firm handles the legal implementation. Those who know the limits plan their use realistically.

Gates only work with a genuine willingness to cancel. A company that does not want to cancel at any point agrees deadlines, not checkpoints.
The legal implementation belongs with a law firm. The procedure provides the substantive specifications – criteria, gates and review questions – not the legal wording.

How we are paid

Dreher Consulting is paid exclusively by the companies that commission our work. We receive no commissions from software vendors and no revenue from implementation. The recommendation in the decision paper is therefore free of any economic self-interest in the conclusion of a particular contract. We have worked to this principle since 1992.

What decision-makers often ask before signing the contract

Five questions dominate the conversations shortly before an ERP contract is signed: safeguarding against the advisory board and bank, the necessary contract clauses, the function of stage gates, the question of liability and the right time to negotiate. Each answer stands on its own and can be understood without reading the rest of the article.

How do I safeguard an ERP decision towards the advisory board or bank?

An ERP decision becomes robust towards the advisory board and bank through documentation: a decision paper with options, criteria including their origin, minuted assumptions, risks and a justified recommendation – supplemented by stage gates as later control points. Transparent bases for a decision comply with the guidelines of the Governance Kodex für Familienunternehmen (4th edition, 2021).

Which clauses belong in an ERP contract?

Four regulatory areas are decisive: measurable acceptance criteria from your own test cases, a change-request process with approval rules, exit options with limited cost per project phase, and conclusively described client obligations. Response times and defect provisions should also be included. The legal wording is handled by a law firm – the project provides the substantive specifications.

What are stage gates in an ERP project?

Stage gates are pre-agreed checkpoints between project phases at which a decision is made on the basis of named criteria: continue, renegotiate or cancel. The concept goes back to Robert G. Cooper (Business Horizons, 1990). In ERP projects, gates sit after the concept phase, before data migration and before go-live.

Who is liable if an ERP project fails?

Liability is governed by the contract – and often fails for lack of foundations: without measurable acceptance criteria, poor performance is hard to prove, and without documented cooperation the client is met with a charge of contributory fault. The legal assessment in each case belongs with a law firm. What can be influenced before signing is the evidence: criteria, records, responsibilities.

When is the right time to negotiate the ERP contract?

Negotiation is most effective while competition still exists – before the preferred vendor is announced and before any time-limited discount deadline. Once the choice is public, your negotiating position weakens. Time-limited discounts are a vendor's negotiating instrument: a discount that prevents the contract from being reviewed is no discount at all.

Next steps

If your ERP decision is coming up, it is worth reviewing the basis for evaluation and the draft contract before signing. You will find more information about our approach in our overview of our ERP consulting services.

The "ERP Decision Confidence" series: Part 1 – Why ERP projects fail before the first line of code is written · Part 3 – The contract is signed, now the real risk begins [Unlock links after publication]

The patterns described here come up especially often in the food industry and in manufacturing.

Sources: Cooper, Robert G., "Stage-Gate Systems: A New Tool for Managing New Products", Business Horizons, 1990 · Commission for the Governance Kodex für Familienunternehmen, "Governance Kodex für Familienunternehmen", 4th edition, 2021 · Trovarit AG, "ERP in Practice 2024/25", Aachen 2024 (1,717 user reviews).

Dr. Harald Dreher

Managing Director, Dreher Consulting · Over 33 years of advisory experience in the DACH mid-market · Over 1,200 ERP and digitalisation projects · 100 % vendor-independent · Available in person for an initial conversation with company leadership.

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