Limitations of ERP

Home Limitations of ERP

1. ERP, Enterprise Resource Planning

ERP, enterprise resource planning is a business process management software which allows an organization to use a system of integrated applications for managing the business and automate a number of back-office functions related to the services, technology, and the human resources. the software of ERP typically integrates all the different facets of operation which include product planning, manufacturing, marketing and sales in the single database, user interface, and application. ERP system is also a part of enterprise application which is software designed in order to use by the large businesses and requires dedicated teams in order to analyze and customize the data. it is also helpful in order to handle the deployment and upgrades. In contrast to this, the small business ERP applications are lightly weighted solutions of business management software which is also customized for the specific solutions of vertical and industry (K, 2018).

In today’s scenario, most of the organizations implement enterprise resource planning in order to replace legacy software and in order to corporate ERP applications because no such systems exist currently. There are following reasons for the organizations in order to implement ERP in their organization:

  • To replace out of date software of ERP
  • To replace software of accounting
  • To replace systems of homegrown
  • To replace non-ERP systems.

2. Limitations of ERP

  1. The implementation of ERP in the new business can be considered as effective. However, the implementation of the same system in the older business can be a difficult task. All the employees of an organization should be trained and there will also be the significant downtime as the business needs to switch all the applications over the new system. Some of the businesses cannot afford the loss profit downtime. The system of ERP also tends to have the standards of the industry for the specific type of a business and the strict molds may lower the creativity as well as competitive advantage.
  2. Policy limitation: ERP systems are not so capable in order to fit into the plan of each and every organization. in order to allow for the specific tasks, ERP systems should be customized. Not all the systems of ERP allow to depend on the system or organization the business uses, this may be against the policy in order to make such drastic changes in the particular
  3. Ongoing support: The support for the ERP systems can also be difficult to depend on. The technical response can is adopted by dealing with various minor problems. However, the major complications with the ERP system can be beyond the customer service limit available to businesses.
  4. High cost: There is a very high cost of ERP software including planning, configuration, customization, implementation, testing etc.
  5. Time-consuming: The overall implementation of ERP is considered as a time-consuming task in an organization. the implementation and deployment of the overall project of ERP may take 1 to 3 years to fully function (Bizfluent, 2018).
  6. Customization issues: Very less customization may not be able in order to integrate the ERP system with the processes of business and very high customization may be responsible for slow down the overall project as well as make it more difficult in order to upgrade.
  7. Participation: The participation of the users is considered as the very essential for the successful implementation of the ERP project. hence, the exhaustive user training, as well as a simple user interface, may also be critical. However, it is very difficult to learn the ERP systems.
  8. Migration: The migration of the existing data in the new system of ERP is considered as difficult to achieve. Along with this, the integration of the ERP system with other types of stand-alone system of software is also difficult. These types of activities may consume lots of time, resources, and money.
  9. Decentralized organization: In the decentralized organization, it is very difficult to achieve the ERP implementations with the disparate business systems and processes.
  10. Evaluation: The evaluation of the process prior to its implementation in the ERP system is considered critical. If the evaluation process is not properly done as well as there is not proper availability of the experienced resources, the overall implementation process of ERP system may fail.
  11. Single vendor lock-in: once there is proper implementation of the ERP system, it also becomes a single vendor lock-in for further customization, upgrades etc. The organizations are at the discretion of the single vendor the organizations may not able to effectively negotiate the services.
  12. Indirect cost: The implementation of the ERP system also includes the indirect cost such as new IT infrastructure and upgradation of WAN links.

3. References

  • K, R. (2018). Advantages & Disadvantages of ERP (Enterprise Resource Planning) Systems – excITingIP.com. Retrieved from https://www.excitingip.com/2010/advantages-disadvantages-of-erp-enterprise-resource-planning-systems/
  • (2018). Limitations on ERP. Retrieved from https://bizfluent.com/about-6583617-limitations-erp.html

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