Advantages And Disadvantages Of Enterprise Resource Planning

706 Words3 Pages
Group project [1] Introduction: What is ERP? Define ERP systems and discuss why organisations will choose to use it? [3 Marks]- Enterprise resource planning (ERP) is a software solution that integrates the operational processes of the business functions of an enterprise. (Leu and Lee, 2016)(1) In this world with a high level of competition at the top, companies have turned to ERP to gain a competitive advantage over rivals. ERP systems are an instrument used to “build strong capabilities, improve performance, undertake better decision making and achieve competitive advantage” (Keong, Ramayah, Kurnia and Chiun, 2012) (Al-Mashari and Al-Mudimigh, 2003) (2 and 3) [2] To be able to identify and evaluate major advantages and disadvantages of ERP systems [3 Marks] - Advantages of ERP - Reducing raw material and inventory costs. Production costs and time can also be reduced. ERP can impact the organisation by forcing changes that will benefit the organisation. It could also be implemented as a stage for different other applications and also be able to evaluate the performance that ERP has on the company. [5,6,11] (Deutsch, C.H. 1998); (Main, J. 1990); (Schlack, M. 1992) Disadvantages of ERP - One of the main disadvantages of ERP is the high price of the software packages which are added. Particularly the cost of additional hardware and software, the training required and execution support. Another important factor is that ERP implementations are prone to fails rather
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