Question

The business processes supported by an ERP system is based on the idea of Best Practice. Discuss the advantages and disadvantages of this approach.

Answer 1

The business processes supported by an ERP system have following advantages:

1. It helps in optimizing the business processes.

2. It aims at improving performance by minimizing the time wastage and reducing the idle time.

3. It helps in eliminating the unwanted activities and operations.

4. It ensures waste reduction in terms of resources and raw material.

5. It ensures better organizational controls by continuous supervision of its processes and procedures.

6. It improves the decision-making of the company.

Following disadvantages are associated with this approach:

1. Implementing ERP in the business and its processes is a costly affair and involves huge investment in terms of cost and continuous improvements.

2. It becomes difficult for the workers to accept the new system and business might have to face resistance from the workers.

3. ERP systems are relatively difficult to use and require proper training and understanding to ensure effective implementation.

4. It does not ensure benefits within short span of time rather benefits from it can be derived over the long-run which might not be feasible for the business.

5. It requires integration and combination of the ERP system with other established systems which in itself is a tedious and difficult process.