ERP Systems Compared: How to choose the right solution for your business

What are the differences between ERP-systems – and how can you find the right solution for your company? This blog highlights the most important diversification factors and provides concrete decision-making aids.

Ten years ago, the ERP market consisted of just a few dominant providers. Today, the range of products on offer is more diverse than ever before. New technological possibilities, changing regulatory requirements and more differentiated demand have led to ERP systems differing significantly from one another – not only in terms of technology, but also in terms of strategy, structure and target group. This poses a challenge, especially for medium-sized companies: how can the right solution be identified among the numerous options? The days when ‘one ERP for all’ was sufficient are over. Instead, individual selection criteria are becoming increasingly important. Gartner in MyFactory predicts that by 2025, around two-thirds of all companies will be relying on modular and adaptive ERP solutions. The focus is therefore shifting from standard to fit – and this makes it essential to take a close look at the so-called diversification factors.

The term ‘diversification factor’ describes the characteristics that fundamentally distinguish ERP systems from one another. According to a recent survey, 75% of ERP strategies are not closely aligned with the overall business strategy, leading to confusion and mediocre results. That is why Gartner predicts that by 2027, more than 70% of all ERP projects will not fully achieve their originally defined business goals – often because the systems are not flexible enough to respond to changing business requirements. This puts flexibility and modularity at the centre of the selection process. It is not just a matter of technical details, but also of functional, strategic and economic aspects that have a major impact in practice. For companies, this means that an ERP system is not a generic tool, but a solution that can be tailored specifically to certain conditions – or not. Important diversification factors include the technological platform, the degree of customisation, industry-specific orientations, integration options into existing IT landscapes, licensing and pricing models, and user-friendliness. Depending on the business model, company size and degree of digitalisation, each of these factors can become a decisive selection criterion.

One of the fundamental differences between ERP systems lies in the question of where and how the system is operated. While classic on-premises solutions are still in demand in certain industries such as finance or manufacturing, many companies today rely on cloud models. The main reason for this is flexibility: cloud-based ERP systems enable faster rollout, lower entry costs and easier scaling. Companies also benefit from automatic updates and continuous development. According to NetSuite, the market for cloud ERP will grow from $72.2 billion (2023) to $130.5 billion by 2028 – a strong signal of the significant shift towards more flexible, scalable ERP models. Nevertheless, the cloud is not always the best solution. Companies with strict data protection requirements or special system requirements often opt for hybrid models, in which sensitive data remains in their own data centre while other functions are provided via the cloud. The choice of operating model should therefore always be in line with the IT strategy and compliance requirements.

A key aspect when selecting an ERP system is its suitability for the industry. This is because the requirements of a manufacturing company differ fundamentally from those of a service provider or a trading company. Good ERP providers respond to this reality with industry-specific templates, modules and configurations. This allows processes to be mapped without the need for complex custom developments. The value of these specialisations is particularly evident in medium-sized companies. An ERP system developed for mechanical engineering, for example, contains standardised modules for production planning, parts list management and maintenance – functions that are hardly needed in an agency. Industry focus not only reduces implementation effort, but also increases system acceptance among employees.

According to a publication by SoftwareAdvice, over 90% of ERP users state that user-friendliness is crucial for their acceptance and productivity. Technical performance alone is not enough. No matter how powerful an ERP system may be, if it is complicated and confusing in everyday use, it will not be used productively. In practice, this means that user-friendliness is not a ‘nice-to-have’ but a critical factor for success. Modern ERP solutions rely on a clear, intuitive user interface, role-based dashboards and mobile accessibility. Experience shows that a positive user experience not only increases efficiency, but also significantly increases acceptance within the company. Especially in the context of self-service functions, such as controlling or human resources management, a well-designed UX is essential today.

Pricing is one of the most visible diversification factors. While some providers rely on classic one-time licence models supplemented by maintenance fees, modern providers are increasingly moving to subscription or usage-based models. These offer the advantage that costs are more closely aligned with actual usage and are easier to plan. There are also differences in the type of licensing – for example, between named user, concurrent user or module-based billing. Companies should pay particular attention to scalability and transparency here. A seemingly inexpensive basic model can quickly become a cost factor as the number of users grows if the licence structure does not grow with it. A report by the Panorama Consulting Group shows that setting up and implementing an ERP project costs up to $625,000; a project whose costs can be accurately estimated and adhered to.

ERP providers work with very different licensing models – and each has its own strengths and weaknesses. While traditional one-time licences offer long-term stability, modern subscription models score points for flexibility and predictable monthly costs. Growth-oriented companies in particular should also consider usage-based models that scale dynamically. The following infographic provides an overview of the most important licence types – with typical advantages and disadvantages as well as a quick comparison to help you make your selection:

No ERP system stands alone today. The ability to connect seamlessly with other systems - be they CRM tools, document management systems or business intelligence platforms - is crucial for process consistency. Modern ERP systems impress here with open interfaces, standardised APIs and a modular architecture. The more open an ERP system is, the easier it is to maintain existing workflows and integrate new applications. This not only reduces project effort, but also increases the future viability of the system. Companies that already pay attention to interoperability today are ensuring long-term flexibility.

An often overlooked but highly relevant diversification factor is compliance with legal and industry-specific requirements. In Switzerland, for example, compliance with the GeBüV (Business Records Ordinance) is a key aspect, while in Germany the GoBD applies and in the EU the GDPR. In addition, there are industry-specific certifications such as ISO 27001, TISAX or GDP (for pharmaceutical companies). An ERP system must either natively meet these requirements or be adaptable via extensions. It is not only the technical implementation that is important here, but also the auditability and traceability of the processes – especially with regard to audit security and data storage.

The search for an ERP system should not begin with the question of which system is ‘best’ – but rather which one ‘fits best’. The diversification factors provide the decisive compass for this. Those who know which criteria are important for their own company can systematically compare, evaluate and decide. A structured approach – for example, using an ERP scoring model – makes this selection process much easier. The most important factors are weighted and compared with the company's requirements. This creates a well-founded picture that provides guidance for decision-makers.