ERP RFP Template + Vendor Shortlist: How to Compare ERP Quotes and Avoid Overpaying

When you should use an ERP RFP (and when you shouldn’t)

An ERP RFP is most useful when multiple vendors could plausibly meet your needs and the cost difference will be meaningful.
If you run a simple single-entity business with minimal integrations, you may not need a heavy RFP—an RFI (Request for Information) and structured demos might be enough.

Use an ERP RFP when:

• You expect to spend enough that a 10–20% pricing mistake is painful.
• You have multiple legal entities, multiple locations, or complex manufacturing/warehouse processes.
• You will integrate many systems (CRM, eCommerce, EDI, WMS, payroll, BI, banking, MES, etc.).
• You need compliance controls (audit, segregation of duties, traceability, retention).
• Leadership wants a defensible procurement process.

Skip a full RFP when:

• You already know the platform you’re buying (e.g., corporate standard) and only need implementation partner selection.
• Your main need is a fast “fit-to-standard” deployment with low customization.
• Budget and timeline are tiny and speed matters more than procurement rigor.

Key principle: an RFP is not a document contest. It’s a tool to force clarity:
scope, assumptions, deliverables, and pricing structure.

Vendor shortlist: how to narrow to 3–6 vendors quickly

The fastest way to waste money is to invite too many vendors and end up with shallow demos and vague proposals.
The fastest way to overpay is to invite too few vendors and lose competitive pressure.
For most organizations, 3–6 vendors is the sweet spot.

Step 1: Identify your ERP “lane” (SMB, mid-market, enterprise)

• SMB / mid-market ERP: often prioritizes faster deployment and simpler licensing.
• Mid-enterprise / enterprise ERP: often prioritizes governance, multi-entity scale, complex operations, and advanced planning.
• Project-centric ERP: prioritizes resource management, project accounting, and delivery profitability.
• Manufacturing-heavy ERP: prioritizes BOMs, routings, MRP, scheduling, quality, traceability, and WIP costing.

Step 2: Shortlist vendors by scenario (example list)

Below is a practical shortlist starting point. Treat it as a “where to look,” not a final recommendation.
The best shortlist depends on your industry, geography, and complexity.

Step 3: Filter vendors with “hard constraints”

Before sending an RFP, remove vendors that fail non-negotiables. Examples:

• Deployment requirements (SaaS-only vs on-prem capable, if needed).
• Localization requirements (tax, e-invoicing, statutory reporting).
• Manufacturing mode fit (process vs discrete, lot/serial traceability, compliance).
• Integration ecosystem needs (EDI networks, eCommerce platforms, Microsoft stack alignment, etc.).
• Budget reality (don’t invite enterprise-tier vendors if your budget cannot support them).

Best practice: run a short RFI first (2–3 pages) to confirm fit, then invite only qualified vendors to the full RFP. This prevents “proposal spam” and keeps your evaluation focused.

How to compare ERP quotes apples-to-apples

ERP quotes are often incomparable because each vendor makes different assumptions. Your job is to normalize everything into the same structure. The easiest approach is to force proposals into one standardized pricing table and require explicit inclusions/exclusions.

Normalize pricing into the same cost categories

• Software subscription / licensing: users, modules, environments, support tier.
• Implementation services: discovery, configuration, security roles, workflow.
• Data migration: profiling, mapping, trial loads, reconciliation, cutover.
• Integrations: API work, middleware/iPaaS, connectors, monitoring.
• Reporting/analytics: core reports, custom reports, dashboards.
• Training & change management: role-based training, super-user model, SOPs.
• Post go-live support: hypercare, managed services, enhancement backlog.
• Infrastructure: on-prem hardware or cloud hosting costs (if not included).

Require vendors to price the same “scope anchors”

Make sure every proposal uses the same anchors:

• User counts by type (full users vs light users vs shop floor/approvers).
• Number of legal entities and locations.
• Modules included (manufacturing, WMS, quality, project accounting, etc.).
• Integration list (each integration named, with direction and frequency).
• Data migration objects (exact list of data sets and whether history moves).
• Timeline and cutover approach (big bang vs phased).

Why this matters: a vendor can look cheaper simply by assuming fewer users, fewer integrations, “clean data,” or a reduced scope.
Normalization exposes these tricks without accusing anyone of bad faith.

How to avoid overpaying (the 12 most common traps)

1. Comparing only year-1 cost.ERP decisions live for years. Always compare 3–5 year TCO including renewals, support, and expected growth.
2. Over-licensing “full users.”Many ERPs offer limited/light user tiers. A role-based license plan can save a large percentage without reducing adoption.
3. Ignoring add-ons and environments.Sandbox, training, extra storage, premium connectors, and support tiers can become major recurring costs.
4. Letting “TBD” become a blank check.If integrations, migration, or reports are “TBD,” ask for a capped estimate range and explicit assumptions.
5. Paying for customization instead of process change.Every customization adds build cost and future upgrade cost. Customize only what is truly differentiating.
6. Underfunding data migration and reconciliation.Bad data causes rework, go-live delays, and operational chaos. Treat data as a project with owners and sign-offs.
7. Underestimating integration testing.The expensive part is edge cases: partial shipments, returns, substitutions, out-of-sequence events.
8. Buying the “best demo,” not the best fit.Demos can be staged. Require scenario-based demos using your data and your exceptions.
9. Skipping reference checks with similar complexity.A reference in a different industry or complexity level is not proof. Ask for comparable scope references.
10. No change-order discipline.Uncontrolled change orders are the #1 overpay mechanism. Your contract must define scope, acceptance criteria, and change control.
11. Not pricing post go-live support.Hypercare, managed services, and enhancement backlog will cost money. Budget it upfront.
12. Not negotiating commercial terms.Multi-year commitments, user tier optimization, phasing modules, and competitive pressure can materially improve cost.

ERP RFP Template (Copy/Paste)

Use the template below as-is, or edit it for your industry. The goal is to make vendors answer in the same structure, so your evaluation and pricing comparison are clean.

1) Executive Summary

Company overview: [Describe your company, industry, size, locations, and high-level operations.]

Project goals:

• [Goal #1: e.g., shorten month-end close from X days to Y days]
• [Goal #2: e.g., improve inventory accuracy from A% to B%]
• [Goal #3: e.g., reduce manual data entry and eliminate spreadsheets in purchasing/production]

Timeline target: [Go-live window, required constraints, blackout periods.]

2) Scope of ERP Solution

Business areas in scope (check all that apply):

• Financials (GL, AP, AR, fixed assets, cash, consolidation)
• Procurement (requisitions, POs, vendor management)
• Inventory & warehouse (bins, cycle count, barcode scanning)
• Order management (quotes, orders, pricing, returns)
• Manufacturing (BOMs, routings, MRP, WIP, scheduling, quality)
• Projects (project accounting, resource mgmt, time & expense)
• HR/payroll (if applicable)
• Reporting & analytics

3) Business Requirements

Vendors must respond using this structure:
Fit (out-of-box / config / customization / not supported), plus notes and dependencies.

3.1 Finance Requirements

• [Example: Multi-entity consolidation and intercompany eliminations]
• [Example: Multi-currency and localized tax reporting]
• [Example: Approval workflows and audit trails]

3.2 Operations Requirements

• [Example: Warehouse receiving/putaway/pick with barcode scanning]
• [Example: Lot/serial traceability requirements]
• [Example: Pricing rules and customer-specific price lists]

3.3 Manufacturing Requirements (if applicable)

• [Example: BOM revisions and effectivity dates]
• [Example: MRP planning with lead times, safety stock, MOQ]
• [Example: WIP tracking and variance analysis]
• [Example: Quality inspections, nonconformance, CAPA]

4) Integrations

List of systems to integrate (vendor must price each integration separately):

• [System #1: CRM] – Direction: [ERP ↔ CRM] – Frequency: [real-time / batch daily / weekly]
• [System #2: eCommerce] – Direction: […] – Frequency: […]
• [System #3: EDI / WMS / Shipping / Payroll / Banking / BI / MES] – …

Integration standards: APIs, middleware preferences, logging/monitoring requirements, retry rules, and ownership model.

5) Data Migration

Data objects to migrate (vendor must price each object category):

• Master data: customers, vendors, items, chart of accounts, BOMs, routings
• Open transactions: open AR/AP, open POs/SOs, inventory balances, open WIP
• History: [What history is required and for how many years?]

Reconciliation requirements: each object must have validation reports and sign-off owners.

6) Security, Compliance, and Controls

• Role-based access and segregation of duties (SoD)
• Audit logging and retention
• MFA/SSO requirements
• Data export controls and encryption
• Compliance requirements: [SOX, ISO, industry regulations, etc.]

7) Implementation Approach

Vendor must describe:

• Methodology (phased vs big bang)
• Project plan with milestones and acceptance criteria
• Team structure (roles, seniority, location)
• Change control approach
• Training and change management approach
• Go-live cutover plan and hypercare support

8) Pricing Response Format (Required)

Vendors must complete the following pricing table (or attach the same format):

9) Vendor Qualifications

• Relevant implementations (similar size, similar industry, similar complexity)
• Reference customers (provide 2–3 references)
• Implementation team CVs (lead consultant/architect/PM)
• Support model and escalation path

10) RFP Timeline

• RFP issued: [date]
• Vendor Q&A due: [date]
• Responses due: [date]
• Demos: [date range]
• Shortlist decision: [date]
• Contracting: [date range]
• Target kickoff: [date]

Evaluation Scoring Matrix + Weighting (Copy/Paste)

A scoring matrix keeps your evaluation objective—especially when stakeholders prefer different vendors.
Adjust weights to match your priorities, but keep the structure consistent.

How to use it: score each vendor 1–5 per category, multiply by the weight, and compare totals.
Then apply a reality check: any vendor that fails a non-negotiable should be removed regardless of score.

Quote Comparison Worksheet (Normalize TCO Over 3–5 Years)

This is where you avoid overpaying. The worksheet below forces each quote into the same structure and reveals hidden assumptions.
You can copy it into Excel/Google Sheets and add columns for each vendor.

1) Normalize scope assumptions

• Users: full [ ], light [ ], shop floor/approvers [ ]
• Entities: [ ], locations: [ ], warehouses/plants: [ ]
• Integrations: [count] (list each)
• Migration objects: [list] + history years: [ ]
• Deployment: SaaS / private cloud / on-prem (specify)

2) Normalize cost categories (per vendor)

3) Calculate 3–5 year TCO

Use the same formula for each vendor:

3-Year TCO =
(Annual subscription × 3)
+ Implementation
+ Migration
+ Integration build
+ (Integration run cost × 3)
+ (Ongoing managed services × 3)
+ (Internal labor × 3)
+ Contingency (10–25%)

5-Year TCO =
(Annual subscription × 5)
+ Implementation
+ Migration
+ Integration build
+ (Integration run cost × 5)
+ (Ongoing managed services × 5)
+ (Internal labor × 5)
+ Contingency (10–25%)

Why contingency matters: ERP projects include unknowns (data issues, edge-case integrations, process gaps). A proposal with zero contingency is not “cheaper”—it’s often just incomplete.

FAQ

Should I evaluate ERP software and the implementation partner separately?

Ideally, yes—because software fit and partner delivery capability are different risks. In practice, many projects shortlist a platform first, then run a separate partner selection process (or evaluate partners alongside the software). If your biggest risk is delivery, partner selection
deserves its own scoring and references.

How many vendors should I include in the RFP?

Most teams get the best results with 3–6 vendors. Fewer reduces competition; more increases evaluation fatigue and reduces depth.
If you have more than 6, run a short RFI first to filter.

What’s the biggest reason companies overpay for ERP?

Comparing proposals that assume different scope. Overpaying usually happens through over-licensing, unclear integration/migration scope, and uncontrolled change orders. The cure is a normalized pricing format and strict scope governance.

How do I prevent change-order abuse?

Contract for outcomes with acceptance criteria, define what is in scope, define what triggers a change order, and require written approval for any scope change. Weekly scope reviews prevent “surprise” expansions.