Advantages+&+Disadvantages+of+ERP

=__ADVANTAGES & DISADVANTAGES__= ERP systems do not do a good job of indicating what information changes on a daily basis. Companies that engage in heavy data analysis from day to day may want to include some type of data warehouse budget for the project. ERP can offer better accessibility to data warehouses so that management can have up to the minute access to information for decision making and managerial control. With this increased access, organizations may also be able to track actual costs of activities performing activity based costing. Warehousing is a place where inventory or data is stored in an organization. ERP systems provide coordination of this information and other relevant details.

ERP projects can potentially improve the quality of business by identifying existing mistakes and attempting to improve them. It can also enhance the core functions of the organization. Implementation of ERP system may help with saving money in various departments. ERP system may also reduce production, operating and inventory control costs. It can improve coordination of economic activities by reducing transaction and coordination costs. A functional ERP system can assist with facilitating daily management of the organization, and it supports strategic planning. ERP enables swift movement of goods in lesser known places as well as in rural areas. ERP could potentially allow decisions to be made more quickly and with fewer errors, data becomes more visible across the whole organization, and all departments can potentially benefit from the integration.

ERP allows data to flow and to be processed effectively and efficiently if used correctly. ERP implementations can be more than an IT solution. It can also transform the company into a more efficient and effective organization. For example, it facilitates the flow and process of data that can be used by potentially all departments in the organizations. It has helped organizations realize full potential of IT; using it for business development projects and for encouraging change in working pattern to introduce more efficient work habits.

Through continuous system expansions, such as adopting ERP and CRM jointly, organizations attempt to gain a competitive advantage in their industry. ERP benefits customers by developing more loyalty and satisfaction through ensuring promptness and effectiveness. If ERP software also acts as CRM software, then it may be easier to identify faults and mistakes increasing customer loyalty even more by increasing effectiveness through making changes as result of information retrieved from the system.

ERP disadvantages include information theft, and implementation also disturbs the regular functioning so the organization runs a risk of losing potential business during this time. Organizations have ongoing issues to address after the implementation is complete as well. They have to be concerned with the fluctuations in choice of technology (what’s hot today is ancient tomorrow). Organizations also have to be weary of competitors trying to benefit from the same advantage, and the constant innovation of software applications.

Integration and Implementation ERP system can also include steep costs involved and the extensive training requirements. Organizations may experience resistance issues within the company due to the shift in business processes as well. Some challenges the organization may face throughout implementation of ERP system that may seem too complicated to overcome. Organizations may decide that too many resources are being used to complete the project which depletes resources that are needed in other areas.