How to choose an ERP system for a small or mid-sized company: from need to go-live

The most common mistake is to begin by watching product demos. Every system looks excellent in a demo its seller runs on tidy data. Begin with a sheet of paper: which processes run with difficulty today? Write five of them step by step as they really happen, with who does each step and where it stalls. For example: from customer order to collection, and from purchase request to receiving the goods and paying the supplier.

Then write next to each process what you want to change once the system is in. "We want an ERP" is not a goal. "We want the invoice to come from the sales order without re-entry, and the salesperson to know the stock level before promising the customer" is a goal you can test. This sheet is what you will measure every system and every implementer against, and it is what stops you buying a large system to use two screens of it.

An ERP is a set of modules sharing one database: sales and invoicing, purchasing, inventory, accounting, HR, projects, manufacturing. Its value is in the links between them, since a transaction is entered once and its effects show everywhere. That does not mean switching on every module together.

The working rule for small and mid-sized companies: start with the module that touches money directly, usually sales and invoicing with accounting, then inventory and purchasing, then the rest. Every module needs clean data, training and a change in people’s habits, and switching on seven modules in one month is the shortest road to everyone going back to Excel. Ask each implementer what order of phases it proposes, and why.

The Zakat, Tax and Customs Authority (ZATCA) introduced e-invoicing in two phases: generation and storage, then integration with the Fatoora platform, which businesses are brought into in groups set by the authority. What applies to your business, and when, is something you confirm with ZATCA or your accountant. We give no regulatory advice here.

What matters when choosing a system is three questions. Does it cover the phase that applies to you today and the one that will apply later? Is that coverage in the plan you will pay for, or in a higher one? And who carries the cost of updating the system if the technical requirements change? With ready-made systems the vendor normally does. With a custom system the integration is a part that is built and tested, so write it explicitly into the scope. And if you have an existing system you want to keep, connecting it to Phase 2 costs SAR 9,500 to 18,000 in the market for a business with one system.

If your processes look like everyone else’s, subscribe to a ready-made system. Cloud accounting and invoicing software starts in the market at SAR 19 a month and goes up to SAR 999 depending on plan and users, it works within days, and its vendor takes care of updates. That is the right decision for most small businesses, and building them their own system is spending without return.

A custom or configured system makes sense when your core process is your own, such as compound pricing, contracting progress claims or make-to-order production, or when user fees climb with every hire. Between the two sits a middle path: a ready-made system that can be modified, with limited changes added. The detailed comparison has its own guide. What matters here is not to settle this question before you have written your processes and tried them on a ready-made system.

Do not accept a general presentation. Send the vendor your five processes and ask to see them run in front of you on the system with data from your side: five real items, two customers, a supplier, and an invoice with a discount and tax. Then ask for a trial account and let the employee who will use the system daily run the processes personally. That opinion matters more than the manager’s.

During the trial, note these points:

Choosing the system is half the decision; running it is the other half. Most ERP projects that stall do not stall because of the software but for reasons visible early: old data that is not clean, requirements that change mid-way, staff who were not trained, and no one inside the company who owns the decisions.

Appoint an internal project owner with the authority to decide and time set aside. Clean your item, customer and supplier data before migration; do not carry the mess into the new system. Switch on one module first, and set a day on which work in the old way stops, because a long period of running both wears everyone out. And have management reports come from the system only, since what management does not ask the system for, nobody will enter.

Ask the implementer for its plan on exactly these points: who migrates the data, how many training sessions per role, and who answers staff questions in the first weeks. An implementer with no answer will hand you a system nobody uses.

Compare the options over three to five years. For ready-made: the subscription multiplied by the expected number of users, setup and training fees, and the cost of any modification. For custom: the build cost, yearly maintenance that runs in the market at 15% to 25% of the implementation cost, and hosting. In both cases add your staff’s time during the project, the line that is always forgotten.

At Fortune Code we build custom ERP systems for companies in Saudi Arabia and the Gulf, starting with the module that hurts most. If we find a ready-made system is enough for you, we will say so. What we commit to: a written quote within 24 hours, a written delivery date, code and accounts in your name, and fast technical support after go-live.