ERP Requirements Gathering Process: Template & Guide

Successful ERP strategies begin with a thorough, laser-focused ERP requirements gathering process.

This process involves some next-level investigation.

You’re identifying and documenting your org’s unique mix of needs, challenges, pain points, and objectives. That includes both immediate, mundane improvements and the pie-in-the-sky stuff vaguely mentioned in your long-term plans.

You’re also sizing up functional requirements, estimating costs, and looking for budget-friendly ways to fill gaps and tap niche capabilities.

There’s a lot more to it than that. But, the point is that, without the right guidance, this process can be overwhelming and time-consuming. Worse, it can lead to bad decisions that will impact your business for years to come.

To help you navigate this process, we’ve put together a guide outlining key steps to include in your own strategy, along with several templates you can use to work through each step effectively.

Start with the “Basics”

The first step in the ERP requirements gathering process is establishing a clear picture of your org. Before engaging vendors – or even researching on your own – you’ll need to nail down some basic facts about your business. Think – who you are, what you do, how much money you can spend, etc.

This will help you identify which terms you should Google to kick off your search, and later, help you quickly weed out any obvious “bad fits.” Say, ERPs that don’t serve your niche or aren’t compatible with your current stack. A few things you might include on your list:

Size

How many employees do you have?

How many legal entities/companies are in your portfolio?

How many locations do you have?

What is your company’s annual revenue?
What is your budget?

Industry

What industry are you in?

What types of products or services do you offer? Physical products or provide services that use raw materials or parts?

If you sell digital products or knowledge-based services, how are those packaged and sold?

Do you operate in a complex regulatory environment (i.e.: financial services, healthcare, life sciences, etc.)?

Do you need advanced track-and-trace, inventory management, or quality assurance & control capabilities?

Do you need specialized financial capabilities (i.e. global tax reporting, multi-currency conversions, custom billing models, project accounting)?

System

What systems are you currently using?

What systems are you planning on keeping?

What functionality is required?

How many system users are required?

How many different user roles will be active in the system?

Would you prefer a cloud or an on-premises solution?

Are there localization requirements for companies in different countries? (i.e. taxes, data center location, etc.)

What systems are you currently using?

What systems do you plan on keeping?

How many users need access?

How many different user roles will be active in the new system?

Core Capabilities & Non-Functional

Here, your goal is identifying the core capabilities and general characteristics you’re looking for in an ERP. These might include things like appearance, usability, navigation, and the learning curve new users might expect from the new tech.

Reporting & Analytics

Customizable dashboards & reports

Multiple reporting formats

Role-based reporting

Ability to export data to multiple formats (XLS, PDF, CSV, etc.)

Productivity

Compatibility with existing apps & tools

Ability to design automated flows/streamline processes

Built-in AI capabilities – i.e. chatbot-based support, intelligent search, predictive insights

Flexibility

Ability to customize/extend platform

Low-code development tools – part of vendor ecosystem or available via 3rd-party provider?

ISV/partner network & available solutions (i.e.: how many tech partners are in the vendor’s network? Do they have an app store/marketplace?

Add-ons & integrations

Line-of-business solutions (i.e. CRM, project management, marketing solutions)

Document Functional Requirements

Next, you’ll want to document all functional requirements. Below, we’ve included some of the questions we ask new Velosio clients as part of the intake process.

We’ve organized those questions into a basic checklist covering common activities, processes, and built-in capabilities you might look for in an ERP by function.

Feel free to reuse and customize this list, so you can use it to document and track functional ERP requirements.

Finance & Accounting

Do you have multiple business units (i.e. departments, locations, legal entities)?

Do these units have their own reporting requirements?

If multiple legal entities do the entities have different reporting currencies? If so, what are those currencies?

Are different localizations required?

Are transactions processed in multiple currencies?

Are there allocations? Within the company? Across companies?

Does the company operate on a calendar year or some other fiscal timeframe?

Do all business entities operate on that same timeframe?

What financial statements are required?

How are financial statements distributed? How would you like them to be distributed?

How do you handle budgeting?

Are budgets managed centrally or siloed off in different platforms?
Do you need variable allocations or statistical reporting?

Banking

How many banks? How many bank accounts?

Can banks provide electronic files for reconciliation?

Are all accounts reconciled monthly?

Are there separate bank accounts established to handle different currencies?

Are funds transferred between accounts?

Are funds transferred between accounts in different companies?

Do you pay or receive funds from vendors via ACH?

Do you want to do cash flow forecasting?

Assets

How many assets are in inventory?

What depreciation books are maintained?

Do you maintain assets and master assets?

Can multiple vendor invoices be applied to a single asset?

Can assets be transferred between a single company’s locations?

Can assets be transferred between legal entities?

How are assets retired or disposed of?

What depreciation methods are used?

Are depreciation accelerators necessary?

Are audits performed to assure accuracy? If so, how often?

Are serial numbers tracked?

Is maintenance tracked?

Are assets categorized for reporting purposes?

Do you track leased assets?

Accounts Payable

Do any vendors offer payment schedules to allow payment over time?

Are any vendors also customers?

Are activity metrics reported by vendor category?

Do any vendors impose credit limits?

Is there a formal vendor onboarding process?

Are vendors categorized? What are those categories?

Are any vendors associated with specific GL accounts and business units within the organization?

Is 1099 processing required?

Are there times when a vendor or vendor invoice is put on hold?

What is the Account Payable to General Ledger reconciliation process?

Are invoices paid from more than one bank account?

What is your payment cycle? Daily? Weekly?

If paying via ACH is a payment remittance document sent to the vendor? How is the document sent? Email? Mail?

If there are multiple legal entities under the corporate umbrella are there purchasing arrangements between those companies?

Do they have separate contracts with vendors?

Accounts Receivable

How many customer invoices do you process each month?

How are collections managed? Is there a collections team within the organization?

What are common customer payment terms? Are there standard terms assigned or does it vary based upon the customer? Billing schedules?

How many active customers are managed?

Are statements produced? How are they distributed? Are there different frequencies?

What payment methods do your clients use? Check? ACH? Credit Card? Wire?

How are invoice and credit documents distributed to customers? E-Mail? Mail?

Is electronic funds transfer required for any customers?

Are there customers that are also vendors?

Are there customer categories or groups that are required for reporting and management considerations?

Are there different invoice formats required for different customers? For different services?

Do you need consolidated invoices for the same client?

Do you have any parent / child relationships within invoicing?

Inventory

How many items are maintained in inventory today?

Do any items require serial or lot number tracking?

How are items replenished? Explain your criteria.

Is cycle counting a part of the current process?

Are items single sourced or are they purchased from multiple vendors?

What costing method do you use? FIFO? LIFO? Average? Standard?

How many inventory locations are managed?

Are items tracked by location and/or bin?

Are items transferred between locations and/or bins?

Does the firm utilize 3rd party warehouse services?

Do you track customer owned/consignment inventory?

Do you track items by category?

Are there specific attributes that are assigned to items to expedite searching and reporting?

Are there any inventory forecasting needs?

Procurement

How do you make purchasing decisions?

What does your purchasing process look like?

Do you buy outside the country?

Is landed cost functionality required?

Do vendors offer any discounts (i.e.: volume, early pay)?

Do vendors offer rebate programs?

Does your firm issue blanket POs? If so, what does that process look like?

Who in the organization issues PO’s? Are there designated buyers or a centralized purchasing department?

What products do you purchase via PO? Inventory? Supplies? Services?

If purchasing inventory are those items single or multi-sourced?

If multiple legal entities within the organization do those companies buy from each other?

Are item numbers cross-referenced with vendor systems?

Does the vendor you choose depend upon the ship-to location?

How do you select qualified vendors?

Is there a requisition process required? If so, what does that workflow look like?

Are RFQs sent to vendors?

Manufacturing

What do you produce?

How do you produce?

Does the organization subcontract any or all portions of the manufacturing process?

How long does it take to produce finished goods?

Are there subassemblies? How many levels are in BOMs?

Can you give us samples of routing steps?

Are there quality control measures in place?

Does the plant have more than one shift?

Are items lot tracked? Raw Materials? Finished Goods?

Does the organization produce to stock or for orders?

How many production orders do you process per week?

How are manufactured items costed?

Do you need finite capacity planning?

Do you have any quality tracking needs?

Do you have any compliance needs?

Do you have subcontracting within your manufacturing process?

Warehousing

Does the warehouse have bins or shelves?

Do individual items have assigned spots in the warehouse?

What is the average number of shipments per day? What is peak volume per day?

What are the methods of shipment?

Do you ship outside the country? If so, what paperwork is required from this system?

Explain your pick, pack, ship process.

How many warehouse staff members do you have?

What are their roles?

Do you assign specific individuals to shipping and receiving?

What is your receiving process? Do you have a formal receipt and put away process? Do you have a formal picking/put away process?

How many loading docks are there?

Do you separate loading and shipping docks?

Do you have forklifts? If so, how many? Are they equipped with scanners?

Is there any customer owned stock stored in any of the warehouses? How is it segregated from the rest of the items?

Explain the fiscal inventory count process? What is the frequency? What staff members are involved?

Do you need full wireless scanners?

Do you need quality controls for receiving?

Project Management

How many jobs/projects are active at one time?

What is the typical length of a job/project? Days? Weeks, Months? Etc.

How many resources are assigned on a typical job/project?

Do jobs/projects cross fiscal years?

What are the cost components tracked? Labor? Expenses? Materials?

Is time tracked against a job/project? Is so, how is that time captured?

Is there a time approval process? Is there an expense approval process?

How are resources scheduled for a job/project? Is someone specifically responsible for assigning resources?

Do you need capacity planning / dispatching?

Do you track resource skill sets/resources?

How are jobs/projects estimated for the client/prospect?

How many tasks and/or phases are in a typical job/project?

Is there common structure/tasks across jobs/projects?

How are jobs/projects estimated for the client/prospect?

For those jobs/projects that are billed to a client what billing method is used? Fixed price? Time & Materials? % complete?

How is revenue recognized?

What are specific reporting requirements?

Do you need project budgets?

Do you need project templates?

If they have multiple companies, do they share resources or items between them?

Service

What does your service management process look like?

Do you offer service contracts?

How long do contracts last?

How are service contracts billed?

How are service contracts renewed?

Do you do warranty work?

Do you manufacture or sell physical products?

Do you service other brands beyond what the company sells?

Do you have service technicians in the field?

How do you dispatch technicians?

Do service technicians have specific required skill sets?

Is any repair work outsourced?

Do field technicians carry inventory in their vehicles?

Do you have support or ticket escalations you need help managing?

Sales

Do you sell products, services, or both?

What is your sales team structure? How many reps do you have?

How are they compensated? What is the commission structure?

How many customer sales reps do you have?

Who are your customers? How many are there?

What channels are you selling through?

Do you generate estimates for customers? If so, how?

What methods do you use to receive orders? EDI? Ecommerce? Fax? E-mail? Phone? Excel? Etc.

Do you sell pre-orders?

Do you offer free trials or demos?

How long does it take to ship/deliver orders?

Does your strategy involve dropshipping?

What is your pricing model?

Do you offer discounts?

What is the average order size? How many items? Total value?

Do orders ever change prior to shipping?
Do you need rate shopping for shipping cost within the sales process?

Different ERP vendors and their associated partners evaluate functional requirements in different ways. NetSuite covers a lot of the same ground we’ve covered here, but they organize requirements into different categories.

Final Thoughts

Requirements gathering is not just a checklist activity. It’s a foundational step that will inform your entire ERP strategy — from pre-planning to vendor selection to implementation, go-live, and beyond.