Pros and Cons of ERP

Pros of ERP

Advantages of ERP Systems

 

Disadvantages of ERP Systems

 

In the absence of an ERP system, a large manufacturer may find itself with many software applications that do not talk to each other and do not effectively interface.

some advantages of implementing an EPR system:

• design engineering
• A totally integrated system
• The ability to streamline different processes and workflows
• The ability to easily share data across various departments in an organization
• Improved efficiency and productivity levels
• Better tracking and forecasting
• Lower costs
• Improved customer service
• order tracking from acceptance through fulfillment
• the revenue cycle from invoice through cash receipt
• managing interdependencies of complex Bill of Materials
• tracking the 3-way match between Purchase orders, Inventory receipts, and Costing
• the Accounting for all of these tasks, tracking the Revenue, Cost and Profit on a granular level.

Some security features are included within an ERP system to protect against both outsider crime,  A data tampering scenario might involve a disgruntled employee intentionally modifying prices to below the breakeven point in order to attempt to take down the company, or other sabotage. ERP systems typically provide functionality for implementing internal controls to prevent actions of this kind. ERP vendors are also moving toward better integration with other kinds of information security tools.
 
Cons of ERP



Here are some of the most common obstacles experienced:

The major problem with ERP systems are mainly due to inadequate investment in ongoing training for involved personnel, including those implementing and testing changes, as well as a lack of corporate policy protecting the integrity of the data in the ERP systems.
The common problems with ERP systems are :

• Customization in many situations is limited
• loss of competitive advantage due to Re-engineering of business processes to fit the "industry standard" prescribed by the ERP system.
•  ERP systems can be very expensive.
• Technical support can be shoddy
• High accuracy needed in other applications to work effectively. A company can achieve minimum standards, then over time "dirty data" will reduce the reliability of some applications.
• Once a system is established, switching costs are very high for any one of the partners.
• The blurring of company boundaries can cause problems in accountability, lines of responsibility, and employee morale.
• Resistance in sharing sensitive internal information between departments can reduce the effectiveness of the software.
• ERP System may be too complex measured against the actual needs of the customer.
• ERP's may be too rigid for specific organizations that are either new or want to move in a new direction in the near future.

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