Question

Conduct your research on the concept of ERP (Enterprise Resource Planning). What are the pros and cons of using ERP?

Answer 1

ERP is a software which is highly resourceful, especially for people who are business enthusiasts. It is a suite of customizable applications which enables the user to access and manage their most crucial business processes. The advantages are the following:

1. It tends to lower the overall IT costs by minimizing it to what the software purchase would cost. Instead of using various applications, one unified system needs to specialised in and the staff could be trained accordingly. Moreover, it maximises the effective usage and reduces the overall cost on other important business functions.
2. It allows accessibility to all the applications that are essential in the functioning and management of a business. It therefore allows a lot of transparency in its operation.
3. Improved reporting and planning is done through the use of ERP system. It readily generates useful reports and analytics in very little time.
4. Availability of customization option is another added advantage since the interface and usability can be modified according to the need of the organization.
5. It provides increased efficiency since it reduces other costs along with need for manual labour and it also high data security and good customer service.

The disadvantages on the other hand include:

1. High direct and indirect cost to the company: The up-front cost of the entire implementation process can be prohibitively high, especially for small-to-medium-sized businesses. This includes the full process of planning, testing, configuring and customizing the software as well as the cost of actual implementation.
2. Over customization may also be disadvantage if the user interface becomes complicated and complex to operate for employees and other members.