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Advantages and Disadvantages of ERP (Enterprise Resource Planning) Systems

By Mahabubar Rahaman In Business & Finance Posted On July 17,2019 0 Comments

Advantages and Disadvantages of ERP: In order to know pc networks higher, it'd be useful to possess a summary of the applications running on the network. ERP or Enterprise Resource coming up with is a vital enterprise application that integrates all the individual department functions into one Software Application.


ERP Systems create it easier to trace the work flow across numerous departments. They cut back the operational prices concerned in manually following and (perhaps) duplicating information using individual & disparate systems. During this article, allow us to have a glance at the benefits and disadvantages of implementing ERP (Enterprise Resource Management) Software Systems.


Advantages of ERP (Enterprise Resource Planning) System:

  1. Complete visibility into all the necessary processes, across numerous departments of a company especially for senior management personnel.
  2. Automatic and coherent work flow from one department/function to a different, to confirm a swish transition and faster completion of processes. This additionally ensures that each one the inter-departmental activities square measure properly caterpillar-tracked and none of them is ‘missed out’.
  3. A unified and single coverage system to investigate the statistics/status etc. in period, across all functions/departments.
  4. Since same (ERP) package is currently used across all departments, individual departments having to shop for and maintain their own package systems is not any longer necessary.
  5. Bound ERP vendors will extend their ERP systems to supply Business Intelligence functionalities, which will offer overall insights on business processes and determine potential areas of problems/improvements.
  6. Advanced e-commerce integration is feasible with ERP systems – most of them will handle web-based order tracking/ process.
  7. There square measure numerous modules in Associate in Nursing ERP system like Finance/Accounts, Human Resource Management, producing, Marketing/Sales, offer Chain/Warehouse Management, CRM, Project Management, etc.
  8. Since ERP may be a standard package, its potential to implement either a number of modules (or) several modules supported the necessities of a company. If additional modules enforced, the mixing between numerous departments is also higher.
  9. Since an info system is enforced on the backend to store all the data needed by the ERP system, it permits centralized storage/back-up of all enterprise knowledge.
  10. ERP systems square measure safer as centralized security policies is applied to them. All the transactions happening via the ERP systems is caterpillar-tracked.
  11.  ERP systems give higher company-wide visibility and thus modify better/faster collaboration across all the departments.
  12. It's potential to integrate alternative systems (like bar-code reader, for example) to the ERP system through Associate in Nursing API (Application Programming Interface).
  13. ERP systems create it easier for order chase, inventory chase, revenue chase, sales statement and connected activities.
  14. ERP systems square measure particularly useful for managing globally spread enterprise corporations, better.


Disadvantages of ERP (Enterprise Resource Planning) Systems:

  1. The value of ERP package, planning, customization, configuration, testing, implementation, etc. is just too high.
  2. ERP deployments square measure extremely long – comes might take 1-3 years (or more) to urge completed and absolutely practical.
  3. Insufficient customization might not integrate the ERP system with the business method ; an excessive amount of customization might prevent the project and create it troublesome to upgrade.
  4. The value savings/payback might not be realized now when the ERP implementation & it's quite troublesome to live a similar.
  5. The participation of users is extremely necessary for no-hit implementation of ERP comes – thus, complete user coaching and straightforward programme can be important. However ERP systems square measure usually troublesome to be told (and use).
  6. There perhaps an extra indirect price owing to ERP implementation – like new IT infrastructure, upgrading the WAN links, etc.
  7. Migration of existing knowledge to the new ERP systems is troublesome (or impossible) to realize. Desegregation ERP systems with alternative stand alone package systems is equally troublesome (if possible). These activities might consume lots of your time, cash & resources, if tried.
  8. ERP implementations square measure troublesome to realize in localized organizations with disparate business processes and systems.
  9. Once Associate in Nursing ERP systems is enforced it becomes one vender lock-in for additional upgrades, customization etc. corporations square measure at the discretion of one vender and should not be able to talk terms effectively for his or her services.
  10. Analysis before implementation of ERP system is important. If this step isn't done properly and fully fledged technical/business resources don't seem to be on the market whereas evaluating, ERP implementations will (and have) become a failure.

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