SAP ERP - ERP Advantages and Disadvantages

ERP Advantages and Disadvantages

Advantages

• Allows easier global integration (barriers of currency exchange rates, language, and culture can be bridged automatically)
• Updates only need to be done once to be implemented company-wide
• Provides real-time information, reducing the possibility of redundancy errors
• May create a more efficient work environment for employees
• Vendors have past knowledge and expertise on how to best build and implement a system
• User interface is completely customizable allowing end users to dictate the operational structure of the product

Disadvantages

• Locked into relationship by contract and manageability with vendor - a contract can hold a company to the vendor until it expires and it can be unprofitable to switch vendors if switching costs are too high
• Inflexibility - vendor packages may not fit a company's business model well and customization can be expensive
• Return on Investment may take too long to be profitable
• Implementations have a risk of project failure