How to justify the purchase of software, an ERP or a CRM system in a grant application?

The purchase of software, an ERP or a CRM system in a grant application should be justified by showing a specific organisational, technological or sales problem that the company wants to solve. Simply stating that the business wants to “improve its work” or “implement a modern system” is usually not enough.

A good justification should demonstrate which processes are currently carried out manually, inefficiently or across scattered tools, what risks this entails, and what measurable results the implementation of an ERP, CRM or other specialist software will bring.

Why does the justification for a software purchase matter so much in a grant application?

In many grant programmes, costs related to digitalisation, automation or the implementation of IT tools are assessed in terms of their legitimacy, reasonableness and link to the project objective. The assessing institution checks whether the planned purchase genuinely results from the company's needs, whether it is proportionate to the scale of the business and whether it leads to specific results.

The purchase of an ERP or CRM system or bespoke software should not be described as a stand-alone expense detached from the business process. The system is a tool for achieving a specific objective, e.g. increasing operational efficiency, shortening customer service time, reducing errors, improving production planning, automating reporting or improving cost control.

Call documentation often refers to areas such as business digitalisation, digital transformation, process automation, cybersecurity, implementation of innovation or improving competitiveness. Information on programmes is published by, among others, the the European Funds Portal, Polish Agency for Enterprise Development (PARP) and – in the case of digitalisation projects for enterprises – the Industrial Development Agency (ARP).

How not to justify the purchase of ERP, CRM or other software?

One of the most common mistakes is describing the purchase too generally. A weak justification most often looks like this:

• “the company wants to implement a modern IT system”,
• “the system will help streamline the company's work”,
• “the purchase will increase the company's competitiveness”,
• “the software is needed to grow the business”,
• “the CRM system will improve contact with customers”,
• “the ERP system will put internal processes in order”.

Such statements may be true, but they are insufficient. They do not identify current problems, do not describe the functional scope of the system, do not show the relationship between the expenditure and the project indicators, and do not allow the reasonableness of the cost to be assessed.

A better justification should answer the following questions:

• which processes are currently carried out manually or in scattered files,
• what limitations exist in the current working model,
• what errors, delays or costs result from the lack of a system,
• which system functions will be used in the project,
• how many users will use the system,
• what data will be processed and analysed,
• what operational, financial or organisational results will be achieved,
• how the system will be maintained after the project ends.

How to describe the current situation before the software purchase?

A good justification should start with a description of the company's current situation, not with a list of system features. It is worth indicating whether the company currently uses spreadsheets, e-mail, several unconnected applications, paper documentation or manual information flow, and what consequences this way of working has.

Examples of problems that may justify the purchase of a system:

• data on customers, orders, stock levels or projects is scattered across many files,
• employees manually re-enter data between systems,
• the company has no single source of management information,
• preparing reports requires a lot of work,
• handling customer enquiries is difficult due to the lack of a contact history,
• the sales department does not have up-to-date information on the status of quotes and orders,
• production or the warehouse is not linked to the sales and finance departments,
• the company has no tools to monitor the profitability of orders,
• the number of errors resulting from manual handling of processes is growing,
• the lack of automation limits the ability to scale the business.

Such a description demonstrates a real investment need. The assessing institution can then see that the purchase of the system is not random but results from a specific barrier to development.

How to justify the purchase of an ERP system?

An ERP system is used for integrated management of enterprise resources. Depending on the scope of implementation, it may cover sales, purchasing, warehousing, production, finance, accounting, HR, logistics, controlling, project management and management reporting. When justifying the purchase, you should show that the current way of working causes time losses, a lack of data transparency, planning difficulties or limitations in cost control.

Sample justification: “The purchase and implementation of an ERP system is necessary because operational and financial data are scattered across several non-integrated tools. At present, information on orders, purchases, stock levels and order fulfilment is collected partly in spreadsheets, partly in e-mail correspondence and partly in internal documentation. This working model increases the risk of errors, prolongs the preparation of reports (currently [X] hours per month) and limits the ability to monitor the profitability of individual orders on an ongoing basis. The implementation of the ERP system will make it possible to integrate key processes, automate data flow, shorten order handling time and improve the quality of management information.”

In the case of ERP, it is worth emphasising in particular:

• integration of data between departments,
• reduction of manual re-entry of information,
• automation of document flow,
• improved control of stock levels,
• better planning of purchasing and production,
• ongoing analysis of costs and profitability,
• the ability to generate management reports,
• scalability of the system as the company grows.

How to justify the purchase of a CRM system?

A CRM system is a tool for managing customer relationships. It can support sales, marketing, after-sales service, complaints, contact history, quote management, customer segmentation and analysis of the effectiveness of sales activities. The purchase of a CRM is particularly justified when the company handles a large number of enquiries, runs a multi-stage sales process, has many sales representatives or needs to organise its contact with customers.

Sample justification: “The purchase of a CRM system results from the need to organise the sales and customer service process. At present, information on customers, enquiries, quotes and commercial arrangements is stored in e-mail correspondence and in employees' individual files. The lack of a central database makes it difficult to monitor the status of quotes, limits the ability to analyse sales effectiveness and increases the risk of information being lost when an employee is absent. The implementation of the CRM system will make it possible to centralise customer data, record contact history, automate reminders, analyse the sales funnel and shorten response times to enquiries.”

In the case of CRM, it is worth pointing to effects such as:

• an organised customer database,
• shorter response times to enquiries,
• better monitoring of quotes and sales opportunities,
• reduced risk of losing commercial information,
• better customer segmentation,
• automation of reminders and sales tasks,
• improved quality of customer service,
• higher conversion of enquiries into orders.

How to justify the purchase of specialist software?

Grant projects also often include specialist industry systems, e.g. software for design, modelling, production management, data analysis, energy monitoring, laboratory operations, e-commerce, cybersecurity, document management or customer communication. In such cases, the justification should be even more closely linked to the technological or service process – you need to show why standard tools are insufficient.

Sample justification: “The purchase of specialist software is necessary to implement the planned project, as the company currently has no tool enabling automatic analysis of production data and real-time monitoring of process parameters. The lack of such a solution limits the ability to identify deviations, increases the risk of delays and makes it difficult to assess the efficiency of resource use. The implementation of the software will allow data to be collected, analysed and reported on an ongoing basis, which will translate into better process control and a faster response to irregularities.”

How to link the software purchase to the project objectives?

A grant application should show consistency between the problem, objective, activities, costs and indicators. The simplest justification scheme looks like this:

• problem: the company works with scattered data and manual processes,
• need: it is necessary to implement a tool that integrates data and automates work,
• activity: purchase and implementation of an ERP or CRM system or specialist software,
• result: shorter handling time, fewer errors, improved reporting, higher efficiency,
• indicator: number of systems implemented, number of automated processes, reduction in handling time, number of system users.

The description should explain why, without this system, the project will not achieve the expected results or will achieve them only to a limited extent. If the company plans to increase its sales volume but will continue to manage customers in spreadsheets, the justification should show that the lack of a CRM limits its ability to handle a larger number of enquiries and orders. If the project concerns production, the lack of an ERP may hinder resource planning, work scheduling and cost control.

How to describe system functionalities without creating a marketing catalogue?

The description of functionalities should be factual and linked to the company's needs. Do not copy the supplier's sales materials. Instead of writing that the system is “modern, comprehensive and intuitive”, it is better to indicate specific modules and how they will be used.

Sample ERP system functions

• a sales module for handling orders and quotes,
• a warehouse module for ongoing control of stock levels,
• a purchasing module for planning requirements,
• a production module for scheduling orders,
• a finance module for analysing costs and profitability,
• a reporting module for creating management reports.

Sample CRM system functions

• a central customer database,
• history of contacts and arrangements,
• a register of quotes and sales opportunities,
• automatic reminders for sales representatives,
• customer segmentation,
• reporting on sales effectiveness,
• handling of requests and complaints.

Sample specialist software functions

• analysis of process data,
• technical modelling,
• design of products or services,
• automatic generation of documentation,
• monitoring of energy consumption,
• control of quality parameters,
• integration with devices or other systems.

How to demonstrate the reasonableness of the software purchase cost?

Reasonableness of cost means that the expenditure is adequate to the project objective, the scale of the company's business, the number of users, the functional scope and the planned results. The cost of purchasing a system may include:

• licences or subscriptions,
• implementation and process configuration,
• integration with other tools,
• data migration,
• user training,
• analytical work,
• testing and go-live,
• post-implementation support.

In the application, it is worth separating the cost of the software itself from the costs of implementation and related services. You should also check in the call rules whether subscriptions (the SaaS model) are an eligible cost – in some programmes only licences constituting intangible assets are eligible, while subscription fees are treated as operating costs.

If the project covers many workstations or modules, you should indicate why such a scope is needed. If the cost is high, it is necessary to justify that the system supports the company's key processes and will be used by a specific number of users. Do not declare functions that will not be used – an excessively broad system scope may raise doubts as to the reasonableness of the expenditure.

How to link the system purchase to measurable results?

The purchase of ERP, CRM or other software should lead to results that can be described and verified. Possible results of software implementation:

• shorter time to prepare a quote or handle an order,
• fewer errors in documents,
• automation of selected administrative tasks,
• less time needed to prepare reports,
• improved availability of management data,
• an increase in the number of enquiries handled,
• better cost control and improved resource planning,
• greater transparency of the sales process.

Indicators should be cautious and possible to document. If the company declares a 30% reduction in customer service time, it should have a way of measuring the situation before and after the system is implemented. If it declares process automation, it should indicate which process this concerns.

How to describe the system implementation in the project schedule?

Buying software is not just about acquiring a licence. The most important stage is implementation, and the schedule should show that the company is able to plan it realistically. A typical schedule may include:

• analysis of processes and requirements,
• selection of a supplier or conducting a procurement procedure,
• purchase of licences or access to the system,
• configuration of the environment,
• data migration and integration with other systems,
• functional testing,
• user training,
• system launch,
• the stabilisation and acceptance stage.

An overly short schedule may be considered unrealistic, especially for extensive ERP systems. In the case of a simple CRM system, implementation may be shorter, but it should still include configuration, data import and user training.

How to justify software in digitalisation projects?

In digitalisation projects, the software purchase should be directly linked to the transformation of processes. It is not enough to show that the company is buying an IT tool – you need to show that it changes the way the business operates. Digitalisation may include, among other things:

• moving from paper documentation to electronic workflow,
• replacing manual tasks with automation,
• integration of data between departments,
• introducing management analytics,
• launching online sales or customer service,
• implementing process monitoring systems,
• improving data security,
• increasing the accessibility of services for customers.

Current calls for digitalisation projects can be checked in the free grant search engine with an AI Assistant. Selecting the scope of implementation and aligning it with the programme requirements is covered by the digitalisation and automation consultation.

What documents can support the justification for a system purchase?

Depending on the programme and the value of the expenditure, documents confirming the need for and reasonableness of the purchase may be useful. They are not always required as attachments, but it is worth preparing them for internal analysis and any requests for clarification:

• an analysis of the company's digital needs,
• a process map before and after implementation,
• a description of problems in the current working model,
• a functional specification of the system,
• an analysis of market prices or supplier quotes,
• a calculation of the number of users,
• a description of planned integrations,
• a description of how results will be measured,
• a security policy or a description of data protection measures.

The most common mistakes when justifying a software purchase

• an overly general description of the need for the purchase,
• no link between the system and the project objective,
• no description of the current problem,
• listing system functions without explaining how they will be used,
• copying the supplier's marketing materials,
• no justification for the number of licences or users,
• failing to include the costs of implementation, configuration and training,
• no measurable results, or overly ambitious indicators that are difficult to document,
• purchasing a system unrelated to the project scope,
• no description of how the system will be maintained after the project ends.

Summary

The purchase of software, an ERP or a CRM system in a grant application should be justified not by a mere need for “modernisation”, but by specific problems and business results. A good justification should include:

• a description of the current way of working,
• identification of problems and limitations,
• an explanation of why the particular software is needed,
• a description of system functions in relation to the company's processes,
• justification of the cost and the number of users,
• identification of results and how they will be measured,
• linking the purchase to the objectives of the grant programme.

Preparing the cost justification and the complete application documentation is covered by the service grant application preparation. The full scope of cooperation is described in our grant advisory services.

Are you planning to implement an ERP, CRM or other software with a grant? We will verify the eligibility of expenditure, available calls and how to justify the costs.Contact an expert