ERP Evaluation - The Advantages And Disadvantages Of ERPERP or Enterprise Resource Planning is an integrated information system which helps in automating the business processes making it more cost effective and efficient. Implemented by businesses worldwide, it is often viewed as the optimum solution to all the problems of businesses. However, an unbiased ERP evaluation brings forth the true picture. There are several advantages as well as disadvantages of the ERP systems. ERP has extended its functions to areas like, distribution, finances, human resource management, warehouse and inventory management. However, its traditional functions remains that of integrating the various business processes with the help of a centralized database. The different modules are designed for different functions of the organization. For example, there are separate modules each for the manufacturing unit and the human resource management. The implementation of ERP systems by a company helps in planning and taking strategic decisions. It keeps a track of the product throughout the process and is capable of providing information about its status. Since it automates the entire process, the necessary adjustments are highlighted. Since it provides updated information it also shows the redundant values in the supply chain. ERP systems for finance have simplified maintaining accounts of various departments. It helps in taking strategic decisions about the company as it charts out the possible trends. This cuts down on the cost of production and helps in engineering the best possible method of making a product. The application of ERP systems also protects the businesses from all sorts of crime by providing a security system. Above all, ERP has given a big boost to e-commerce. Though there are many benefits of ERP, of late companies have come to realize its several drawbacks. The implementation of ERP solutions is a very expensive and lengthy procedure. It requires trained IT professionals to configure and install these systems. The implementation itself might take a lot of time. These are very complex systems and proper training is required to apply these systems. Its maintenance also requires technical support. Therefore, apart from being expensive they are also difficult to use. It is imperative that suitable modules are selected as per the business requirements. ERP systems can be modified by the process of customization, but this again is a very expensive process. It is therefore very necessary to choose the right package for a particular company. ERP systems also fail to adapt to certain process and are slightly rigid in nature. There are numerous ERP vendors in the market, providing improved business solutions. ERP evaluation helps in studying its drawbacks which helps to make its application more cost effective and profitable for an enterprise. Based on this IT firms like SAP, Microsoft Dynamics, Oracle are constantly designing more advanced software packages to deal with the complexities of market dynamics. |