Disadvantages of ERP Software System

ERP provides cross-functional, enterprise wide integrated system which has deep functionality for core business processes and store data at one place which is accessible by all the modules for retrieval and storage. It also provides analysis tool to convert the data into more meaningful and helpful information to help the management in making timely decisions. It can automate various processes spread across the whole organization which are repetitive and interactive hence reducing the cost by saving valuable man hours and also reducing the chances of wrong entries. Apart from these there are numerous other features which are accounted as advantages of ERP and make it an efficient tool for running businesses. But all is not rosy with ERP, there are certain disadvantages associated with it which demand proper attention and detailed analysis to find ways of resolving them before deciding to go for ERP solution.

The biggest disadvantage associated with ERP is its tedious, long, time consuming, expensive implementation. Even if cost of purchasing the software is ignored the implementation process in itself can take months and consume huge sum of money if done properly. However one may think that a company shall be having brains to calculate the cost and make arrangements well before they actually begin the process to avoid cash crunch in the middle of the implementation cycle but even the most professionally run companies and small enterprises were not able to implement the ERP project within the budgeted amount ever. On top of it, to throw the whole effort in cold waters all a company needs to do is to make just one mistake out of the thousands to jeopardize the whole project. Such a scenario raises a serious question mark on the relevance of going for ERP implementation, as the kind of money and time wasted in the failed ERP implementation can shake the financial standing of any company.

ERP has two sides, one touch each and every employee of the company and another is related to technological complexities. Both need to work in a way that they compliment each other perfectly to make the system run at its best. To deal with the employees is a delicate issue, it is not only time consuming but requires lot of patience and effective change management, and staff not handled in accordance with the culture of the company can create dissatisfaction which can lead to failure of the project. 

Even after successful completion of this process the valuable data which now comes at the disposal of so many people raises serious security issues. Data redundancy or corruption, server failure, third party intrusions, occurring either due to lack of proper technology or technological failures, can incur huge losses to the company within no time and at any time. And during implementation employees are diverted from their actual responsibilities which can painfully slow down the growth of the company.

It has been noted that sometimes companies lose their competitive edge after implementing ERP as ERP pushes processes to match industry standards and in this effort wipe off the flexibility which can bring down the quality of the final product or service of the company. This rigidity can also bring down employee comfort level and make them dissatisfied. There can be many more disadvantages of ERP but fortunately all can be prevented and minimized if proper steps are taken before beginning the process.