Question

What are the disadvantages, if any, of ERP?

Answer 1

ENTERPRISE RESOURCE PLANNING:

Integration of planning, marketing, inventory, sales is a process of ERP.

1. Much higher cost of ERP Software, customizing, planning and implementing an ERP software

2. They are highly slow projects may take 2 or more to get finished and fully useful.

3. pint-size customization may not integrate this system with the business process & up gradation is time consuming and ERP system is too slow.

4. The cost savings may not be understood immediately after the application & it is quite difficult to measure.

5. These are difficult to learn and need participation of employees important for successful operation of this project because exhaustive user training and simple user interface might be critical.

6. The implementation of this system incurs additional indirect costs such as new IT infrastructure, upgrading the WAN links, etc.

7. Movement of existing data to the new ERP systems is impossible. Incorporating ERP systems with other software systems is possible sometime. These activities may use a lot of time, money & resources.

8. ERP implementations are hard to succeed in decentralized organizations with dissimilar business processes and systems.

9. Once an ERP systems is developed it becomes a single vendor lock-in for upgrades, customizations. Companies relying on this single vendor may not be able to exchange effectively for their services.

10. Evaluation prior to implementation of ERP system is critical. If this step is not implemented correctly and they experience technical resources while evaluating, ERP operations can become a failure.