What Are The Advantages And Disadvantages Of Enterprise Resource Planning?

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Enterprise Resource Planning (ERP) systems are one of the most current technologies that many companies adapted. Enterprise Resource Planning is defined as a software package that combines activities happening in different divisions into a single computer system. The ERP systems allow transparency in the organization and easy access of data, the software packages consist of several modules which are Finance, Sales, Human Resource and production, delivering an incorporation of transferable- based information management (Esteve and Pastor, 1999). The ERP systems is considered to be the most important management tool in the business industry because it producers real-time data and it increases level of production (Esteve and Pastor, 2001). However, each and every system in the organisation has its own risks and the risk comes with its advantages and disadvantages. According to (Esteve and Pastor, 2001), the following are the advantages and disadvantages of ERP system: Advantages Disadvantages It reduces costs The software is costly…show more content…
It provides great outcomes and real-time information, but the risks it carried are also equally great. When a company rushes into installing the system, without first understanding the implication of the business the System could fail. The Enterprise System is designed to solve problems of fragmentation of data in a big organisation, by implementing this systems it combines all the information from different modular into one comprehensive database (Davenport, 1998). Through this software, when new information enters it automatically update all information related to it. During the past years when developing information system, the executive would sit down and decide on how they wanted to do business, and then select a software system that would stand with their organisation’s processes. The executive would re-write the software code to ensure a good relationship (Davenport,
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