Advantages and Disadvantages of ERP: Companies Need to Know!

In order to improve business performance, it is very necessary to have a supporting system, but before using it, it is necessary to first know the advantages and disadvantages of the ERP system so that it can maximize its function.

ERP software is a type of software that can help companies carry out repetitive operational activities.

Of course, it will bring many changes to the company's development, such as employee training, management of company resources, preparation of financial reports, recording of sales and purchase transactions, and other activities.

Although the contribution of this ERP software looks like the type of software that every company must have. However, people currently still have low awareness of the use of ERP software in a company environment, and some people are still not even aware of the existence of an ERP system.

Of course, this makes those of you who are planning to start using ERP software hesitate because maybe you still don't feel the contribution that this software brings.

However, if you understand the advantages and disadvantages of ERP software in this article, maybe you can reconsider whether ERP software is suitable for your company or not.

Advantages of ERP Software

It is very important if we know the advantages and disadvantages of ERP, because it really helps companies in receiving various incoming information flows.

This is because the ERP system has the main goal of providing accurate data, so that companies can make the right decisions.

Here are some advantages of ERP systems that you need to know:

Reducing Operational Costs

Usually, the largest source of funds spent by a company comes from operations and management. Both can be managed concisely when using an ERP system.

This will indirectly reduce operational costs that need to be incurred by the company.

Business and Data Can Be Integrated

In the millennial era like now, data is an important fact that every company must take into account. The benefit of ERP is that it captures all the data needed by the company so that decision making can be more accurate.

Apart from that, changes also occur in real time so it is easier to monitor.

Increase Collaboration

Collaboration is an important need that every company must now master. The reason is, without collaboration, brilliant ideas will not emerge that contain technological innovation and progress.

Increased Productivity

Abandoning the manual system and replacing it with a digital system will automatically increase productivity. Amazingly, an ERP system will be very helpful in carrying out repetitive work so that it can be done automatically. That way, there is still a lot of free time that can be used for other activities.

Managing Business Becomes More Conducive

The modules in the ERP system for the business as a whole make it more conducive. What is meant by conducive here is being able to integrate with each other.

Helps Decision Making

Decision making is important in running a company because these decisions will determine the direction the company will run.

This is where ERP software can help management make decisions because this software can provide financial data or other important data quickly, completely and accurately.

Disadvantages of ERP Software

The advantages and disadvantages of an ERP system are two components that cannot be separated. After knowing what the advantages are, it's time to move on to finding out what the disadvantages are. The following are some of the shortcomings of this system.

Large Initial Costs

To apply ERP software, you will definitely need a large amount of money. Of course, this is not strange, because from the contribution alone you already know that the price will be commensurate with the value.

Because public awareness is still low about this ERP software, if you choose to invest early, your company will be able to develop more quickly compared to not using this ERP software from now on.

Employees Difficult to Adapt to ERP Software

In every company it can have positive and negative impacts, but for ERP software this has a particularly negative impact because there is a possibility that the workforce or employees are still unable to adapt to the existence of ERP software, which could result in the company's performance actually decreasing.

That's why before you use this software, it's a good idea to discuss and inform each department to get commitment and change the company's work system.

The system is complicated

Because this ERP software can fulfill all company activities, there is a possibility that you will have difficulties in operating it because consumer needs are fewer.

Therefore, when you are choosing ERP software, you can discuss it first with the company that makes the ERP itself so that you will understand better how to operate it later.

Conclusion

So, those are some of the advantages and disadvantages of ERP which are very important to support your company or business in the future.

Of course, companies that are fully prepared can use this system so that the benefits obtained can be maximized.

As company software, of course ERP has advantages and disadvantages. Apart from that, ERP software will provide many benefits for your business.

Starting from sales, purchases, to financial and accounting reports are already in this software.

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