ERP Benefits and Disadvantages

What are the benefits and disadvantages of implementing ERP software?

Advantages:

Integration

Integration can be the highest benefit of them all. The only real project aim for implementing ERP is reducing data redudancy and redudant data entry. If this is set as a goal, to automate inventory posting to G/L, then it might be a successful project. Those companies where integration is not so important or even dangerous, tend to have a hard time with ERP. ERP does not improve the individual efficiency of users, so if they expect it, it will be a big disappointment. ERP improves the cooperation of users.


Efficiency

Generally, ERP software focuses on integration and tend to not care about the daily needs of people. I think individual efficiency can suffer by implementing ERP. the big question with ERP is whether the benefit of integration and cooperation can make up for the loss in personal efficiency or not.

Cost reduction

It reduces cost only if the company took accounting and reporting seriously even before implementation and had put a lot of manual effort in it. If they didn't care about it, if they just did some simple accounting to fill mandatory statements and if internal reporting did not exists of has not been fincancially-oriented, then no cost is reduced.

Less personnel

Same as above. Less reporting or accounting personnel, but more sales assistants etc.

Accuracy

No. People are accurate, not software. What ERP does is makes the lives of inaccurate people or organization a complete hell and maybe forces them to be accurate (which means hiring more people or distributing work better), or it falls.




Disadvantages:

Expensive

This entails software, hardware, implementation, consultants, training, etc. Or you can hire a programmer or two as an employee and only buy business consulting from an outside source, do all customization and end-user training inside. That can be cost-effective.

Not very flexible
It depends. SAP can be configured to almost anything. In Navision one can develop almost anything in days. Other software may not be flexible.

Disclaimer: Contents are not reviewed for correctness and are not endorsed or recommended by Toolbox.com or any vendor.

 

SAP ERP

Business Benefits

SAP ERP delivers a comprehensive set of integrated, cross-functional business processes. With SAP ERP, you can gain the following benefits:

• Improve alignment of strategies and operations
• Run your enterprise in accordance with strategy and plans, accessing the right information in real time to identify concerns early.
• Pursue opportunities proactively.
• Achieve corporate objectives by aligning workforce and organizational objectives.
• Find the best people and leverage their talent in the right job at the right time.
• Improve productivity and insight
• Leverage self-services and analytics across your organization.
• Improve operational efficiency and productivity within and beyond your enterprise.
• Reduce costs through increased flexibility
• Use enterprise services architecture to improve process standardization, efficiency, and adaptability.
• Extend transactions, information, and collaboration functions to a broad business community.
• Support changing industry requirements
• Take advantage of the SAP NetWeaver platform's latest open, Web-based technology to integrate your end-to-end processes seamlessly.
• Reduce risk
• Solve complex business challenges today with SAP, your trusted partner for long-term growth, with 30 years of experience working with organizations of all sizes in more countries than any other vendor.
• Join SAP's world-class partner network, uniquely qualified to support the best business practices in more than 25 industries.
• Improve financial management and corporate governance
• Gain deep visibility into your organization with financial and management accounting functionality combined with business analytics.
• Increase profitability, improve financial control, and manage risk.
• Optimize IT spending
• Integrate and optimize business processes.
• Eliminate high integration costs and the need to purchase third-party software.
• Deploy other SAP Business Suite applications incrementally to improve cash flow and reduce costly borrowing.
• Gain higher ROI faster
• Install SAP ERP using rapid-implementation techniques that cost less than half what traditional approaches cost.
• Leverage preset defaults and prepackaged versions available for specific industries.
• Retain top performers
• Retain your top performers through clearly defined career and development plans.
• Link employees' performance to compensation programs such as variable pay plans and long-term incentives.
• Provide immediate access to enterprise information
• Give employees new ways to access the enterprise information required for their daily activities.