What are the Benefits and Drawbacks of ERP SYSTEM?

What are the Benefits and Drawbacks of ERP SYSTEM

Enterprise resource planning (ERP) is business process management software that permits a corporation to use a system of integrated applications to manage the business and automate many back office functions associated with technology, services and human resources.

Before we get into the small print of benefits and drawbacks of ERP systems allow us to understand what an ERP system is and the way it actually works that way we will understand its advantages and drawbacks during a better way

In general, ERP uses a centralized database for various business processes to scale back manual labor and to simplify existing business workflows. ERP systems typically contain dashboards where users can check out real-time data collected from all across the business to live productivity and profitability

Advantages of an ERP system

Now that we understand the functionality of an ERP system we take a glance at the benefits of ERP systems

  1. Complete Customization
  2. Streamline processes and automate all business operations cross-departmentally.
  3. Mobility and adaptability.
  4. Efficiency is that the favorite goal of implementing ERP software. ERP software eliminates repetitive processes and great reduce the necessity to manually enter information. The software is additionally ready to streamline business processes and make it easier and more efficient for companies to gather data, regardless of what department they’re working in.
  5. Forecasting in ERP software gives users, and most significantly managers, the tools and resources needed so as to make more accurate forecasts.
  6. Complete customization.
  7. The guts of the ERP concept are data. Sharing data across functional silos like customer service, sales, marketing and business development enhances collaboration throughout a corporation. The opposite side to widespread data access is controlling who can see and edit the knowledge. ERP solutions have intrinsic controls to make sure the safety of your data.
  8. Integrated information.
  9. Make use of the community knowledge and support.
  10. Gives employees more power to be revenue generators.

Disadvantages of ERP system

There are countless benefits that an ERP system provides. But, a bit like all goodies, an ERP system also has some disadvantages also

  1. The value of ERP Software, planning, customization, configuration, testing, and implementation are too high.
  2. Insufficient customization might not integrate the ERP system with the business process & an excessive amount of customization may hamper the project and make it difficult to upgrade.
  3. Re-engineering of business processes to suit the industry standard prescribed by the ERP system may cause a loss of competitive advantage.
  4. Many of the integrated links need high accuracy in other applications to figure effectively. a corporation are able to do minimum standards, then over time dirty data will reduce the reliability of some applications.
  5. If the system isn't applied correctly, it is often very detrimental to the corporate.
  6. Adaptation to the hardware within the company is often a challenge because it could be difficult for the old users to adapt to the present new technology.
  7. Migration of existing data to the new ERP systems is difficult to realize. The migration of the info may find yourself being a really time taking and dear event.
  8. Once an ERP systems is implemented it becomes one vendor lock-in for further upgrades, customizations
  9. There are few experts during this system
  10. The system could also be too complex measured against the particular needs of the customer.
  11. To sum it all up, it's perhaps the foremost important feature that you simply understand the necessity of your company and install an ERP system which inserts perfectly to the requirements of your company and doesn't over do what's required of the ERP system.