Question

These are some pros and cons of ERPs: please explain each one by using two or three sentences

Pros: 1. single data storage

2. integration

3. modular structure

4. configurable

cons:1. complex and inflexible

2.isomorphism

3. long expensive implementation

4. switching cost

Answer 1

PROS.

1. SINGLE DATA STORAGE

Since a Database system is implemented on the back end to store all the information required by the ERP system, it enables centralized storage/back-up of all enterprise data. Elimination of unnecessary operations and data. No duplicate records or playback operations, that is redundancy is avoided.

2. INTEGRATION

Advanced e-commerce integration is possible with ERP systems – most of them can handle web-based order tracking/ processing. It is possible to integrate other systems (like bar-code reader, for example) to the ERP system through an API (Application Programming Interface).  ERP systems make it easier for order tracking, inventory tracking, revenue tracking, sales forecasting and related activities.

3. MODULAR STRUCTURE

Since ERP is a modular software system, its possible to implement either a few modules (or) many modules based on the requirements of an organization. If more modules implemented, the integration between various departments may be better. There are various modules in an ERP system like Finance/Accounts, Human Resource Management, Manufacturing, Marketing/Sales, Supply Chain/Warehouse Management, CRM, Project Management, etc

4. CONFIGURABLE

Most ERP vendors offer several applications that can be implemented together according to business needs. Barring a few exceptions, each application is designed to be able to stand alone or integrate with the larger suite. This way, your company can pick and choose which components work best and can leave out what you don’t need.

.

CONS.

1. COMPLEX AND INFLEXIBLE

ERP software solutions provide numerous capabilities, but that also means the software can be complex and difficult to use. It’s not unheard of for companies to get swept up in all the potential of an ERP but fail to plan properly for its implementation. Some businesses may find themselves with systems too large and complicated for their processes, leading to a poor ROI. This is especially true if you can’t convince your team to adopt the software due to the complexity.

3. LONG EXPENSIVE IMPLEMENTATION

ERP systems will ideally last for at least five years. Many companies use their systems for much longer. Because of this, it might be more cost effective to buy a comprehensive system with a bigger price tag than to “save” money on less expensive software that doesn’t fit your company’s needs.The best ERP system is one that meets your anticipated requirements now and in the future — and it may not be the cheapest option.

4. SWITCHING COST

Migration of existing data to the new ERP systems is difficult to achieve. Integrating ERP systems with other stand alone software systems is equally difficult. These activities may consume a lot of time, money & resources, if attempted. Change of staff, companies can employ administrators who are not trained to manage the ERP system of the employing company, proposing changes in business practices that are not synchronized with the system.

2. ISOMORPHISM

The participation of users is very important for successful implementation of ERP projects – hence, exhaustive user training and simple user interface might be critical. But ERP systems are generally difficult to learn (and use).