Advantages And Disadvantages Of Enterprise Resource Planning

Adoption of an ERP system enables an organization to eliminate dozens or even hundreds of separate systems and replace them with a single, integrated set of applications for the entire enterprise.

Making decision of what to select between “best of breed” and Enterprise Resource Planning (ERP) systems are never easy. There are many controversy or chaos issues surrounds this thought and debate. Which one is better? What factors need to be considered? This paper will address the difference between “best of breed” and ERP System that needs to be considered, such as the definition, advantages and disadvantages each of them.

Enterprise resource planning enables firms to replace different departmental information systems and database silos with systems that collectively work as a single cross functional database. ERP systems are available for every key business function such as order processing, production control, HR, warehouse, marketing, finance and much more. By having a common technology and database platform throughout the firm, systems and processes from various departments can be integrated that achieve superiority in terms of enhanced cost, operational and productivity benefits. Implementing an ERP system requires careful planning to achieve the targeted benefits and minimize the risk of project failure.

The object of this research paper is to describe the implementation challenges of an enterprise system, then to analyze the changes required in its implementation and discuss the advantages of ERP over legacy systems. Some of the informational background will be discussed in this paper regarding enterprise resource planning systems. This paper will construct some examples from my research findings to show why ERP has advantages over legacy systems. This paper will also not only provide strengths of having an enterprise system, but will show weaknesses as well. And to conclude, this paper will explain why and how enterprise systems will be of benefit for organizations and business with decision-making processes.

In case study III-4, titled “ERP Purchase Decision at Benton Manufacturing Company, Inc.,” describes in detail what a major manufacturing company experiences while considering a substantial investment with the implementation of an ERP (enterprise resource planning) system. Among the company’s management personal opinions vary, some doubt the need of such a system while others support and justify the expense. The question at hand; whether or not to implement a costly system with a lengthy transitioning phase? In his attempt to answer this question, Walter McHenry, CEO and President of Benton Manufacturing has formed a two man team to investigate and further

Enterprise Resources Planning (ERP) is the core system of any company. In order to facilitate all departments in a manner to improve issues, there are a few things that must be meet to successfully utilize a software system such as ERP. This allows any member within the company to access a single and centralized data source with information regarding products, services, customers and suppliers (Sadrzadehrafiei, Chofreh, Hosseini, & Sulaiman, 2013). The ability to share and access one software benefits the company to improve in areas such as sales and marketing, customer satisfaction, human resources, operations, and more. In addition, business intelligence tools such as ERP systems provide the techniques and solutions managers need to analyze and understand complex business situations, and simplify decision making processes that is of crucial importance during times of financial and economic crisis (Antoniadis, Tsiakiris, & Tsopogloy, S. 2015). This paper explores the definition and functions of an ERP system and the successes and costs of implementation.

ERP systems not only differ by the size of businesses but also by industry in the sense that different industries use different ERP software’s.

ERP system is based on the single database system this database access to everyone in the department which provides very significant impact on the operational command on the business. It also makes easier to decision making process in the business. According to data in 2000 organization spend over 20 billion USD for ERP planning. Which rises 6.7 billion only in a year and they estimated that will be more than 27 billion next 8 years. (Wang, 2008)

Successful implementation of an Enterprise Resource Planning (ERP) is not impossible in real life but for that it must be developed through a proper planning and implementation. ERP are designed to upgrading an organization’s ability to generate more timely and accurate information for its supply chain. Organization must be ready for reengineered before the success of productivity can be realised. Most of the companies have faced heavy problems while trying to implement ERP systems and have led to serious problems.

In order to compete in the industry with other competitors effectively, organisations must seek to achieve competitive advantages over them and Enterprise Resource Planning (ERP) can play an important part in helping organisations to gain and sustain competitive edge.

Enterprise Resource Planning is a term formerly invented in 1990 by The Gartner Group to describe the next generation of MRP II software. The purpose was to integrate all facets of the professional creativity under one group of software requests. The meaning of ERP would be broadened to include almost any type of large integrated software package. Webopedia offers a widespread description of ERP as a occupational organization system that integrates all facets of the occupational, with planning, trade, sales, and marketing. About of the additional well-known ERP software designers contain SAP, Oracle, and PeopleSoft.

Enterprise resource planning software such as Oracle and SAP is highly effective tools to manage and analyse the multidimensional aspects of businesses such as financials, operations and corporate services, human capital management, etc. (Priyadarshini, 2002). A company using the ERP financial products (Priyadarshini, 2002) can save a lot of money over the long term and the organization's productivity will be improved. Furthermore Morris (2011) suggested that those firms which are implementing ERP systems are less likely to report internal control weaknesses compared to non ERP implementing firms. However Kwasi & Salam (2004) noted that ERP implementation is very risky as it requires large amount of investments and significant organisational resources.

ERP management system is the mode of the modern enterprise management. It is a company-wide application, highly integrated system, covering the customer, project management, inventory and purchasing supplies production, by optimizing the enterprise resources to maximize resource efficiency.

ERP can be a difficult task, it takes more than months to setup and it costs more than software and hardware, but if everything is prepared with proper resources than implementation of ERP system can be completed with in budget in a proper or required time frame and deliver

Introduction Enterprise Systems (ES), also called Enterprise Resource Planning (ERP) systems, are among the most important business information technologies to emerge in the last decade. While no two industries’ Enterprise Systems are the same, the basic concept of Enterprise Systems is focused mainly on standardization, synchronization and improved efficiency. ERP is basically the successor to material resource planning (MRP) and integrated accounting systems such as payroll, general ledger, and billing. The benefits of Enterprise Systems are very significant: coordinating processes and information, reducing carrying costs, decreasing cycle time and improving responsiveness to customer needs.