Hi,
All the below three methods requires RPC's(rational polynomial coefficients), in your case you got an error running the tool because the rasters may not be having RPC's , in most cases when you go to windows explorer where the raster is stored the raster has a rpc.txt file along with the other raster files. The best way to find out whether the raster has a RPC or not is, add it to ArcMap > right click the raster in the table of contents > Properties > Display tab> if the orthorectification is grayed out there then the raster does not have RPC if it is enabled then it means the raster has an RPC. So to perform an orthorectification it is necessary to have a raster with RPC as well as a DEM or a constant elevation value.
1. Using Create Ortho Corrected Raster Dataset GP tool
2. ArcMap option
3. Image Analysis Window
-Gayu
There is also the ability to use a mosaic dataset so that you can process multiple scenes. Since you say that you have multiple, then I would consider this. The process is similar to the Image Analysis Window, but you can apply the functions to multiple scenes. Depending on your DEM you are using to orthorectify, you may consider creating a mosaic of the DEMs prior to this, but otherwise it should work fine.
Check out this link for the tutorial to orthorectify with the mosaic dataset.