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ERP software is very very essential to handle modern businesses. ERP refers to the tools and software that businesses can use to manage and process information from all parts of the company. ERP solutions make it easier to track the workflow across various departments, store information in one database and give businesses a simplified look at how all their systems are running. Although ERP is like a nervous system for a business it has some disadvantages too.

Disadvantages of ERP Software

1. Expensive

The cost of ERP Software, integration, customization, planning, testing, implementation, training, consultants, configuration, data analysis and conversion, etc. is too high. It is very expensive to purchase and even more so to customize. Very few companies can afford the cost and effectively use ERP right out of the box. Modification is must to suit their needs, and this process is both tedious and expensive. There may be additional indirect costs due to ERP implementation – like upgrading the WAN links, new IT infrastructure etc.

2. Time Consuming

ERP deployments are highly time-consuming – projects may take 1-3 years or more to get completed and fully functional. The present business processes have to be rethought to make them synchronize with the ERP and this processing kills a lot of time. It involves an ongoing, sometimes never ending process for implementation.

3. Impact on business processes

ERP systems very often demand changes to business process, which is complicated to implement. In order to assure that each part of the business fits into the ERP structure, it is unlikely that individual policies and processes can be maintained. Too little customization may not integrate the ERP system with the business process & too much customization may slow down the project and make it difficult to upgrade.

4. Lack of flexibility and adaptability

The ERP software can work well for established businesses that have defined practices and processes, but an ERP can be very inflexible for businesses that are looking to significantly change what it is that they do. They are unable to adapt to the new things even relatively small changes can be complicated to implement and very costly. Dynamic businesses, constantly looking to make changes in direction would not feel the same benefit from an ERP

5. Lack of Security

Integrating an ERP system with other software might need the software to be modified. As a result of integration, data leaks and security breaches might appear. The impact of such data leaks can be disastrous for business.

6. Hard to Customize

ERP systems are not very customizable. Its customization involves a lot of resources, money and time. Few systems are ready to use out-of-the-box. Some systems also require other software programs, an unavoidable fact that might make the processes more complicated, unmanageable and sometimes even impossible in some cases.

7. Issues of ongoing support

ERP systems are very often supported by third-party vendors. Once an ERP system is implemented it becomes a single vendor lock-in for further customization, upgrades, etc. Companies have to depend on a single vendor and may not be able to negotiate effectively for their services. Security of data held within the ERP can also be a concern where third-party vendors are concerned and many businesses utilizing an ERP feel ‘at the mercy’ of the vendor with no real control over the availability and stability of the system.

8. Effectiveness can be eroded by the business

An effective ERP relies on the right business processes to maintain and support the architecture Where businesses work in a very ring-fenced manner, an ERP system will not realize its full potential. Businesses that don’t invest in the appropriate training of staff members will not see the benefits of the implementation. The architecture is dependent on a very integrated business model and failure to share data between departments will limit effective working. In order to get full benefit from an ERP system, a business must be prepared to work in a certain way.

In sum, Enterprise resource planning systems have a mixed reputation on the market. Some businesses have consumed strong benefits from the implementation systems, whereas others feel that the results is not justified for the initial investment. This is time consuming and cost effective system development and one that should be carefully considered.

Source by Fakharuddin Manik