Logo - ERInsight

Advantages and Disadvantages of ERP

advantages & disadvantages of ERP

We all love Batman, don’t we? Rich, good-looking, and spoiled billionaire who plays a vigilante in the night. When many admire Batman, others like the villains he’s fought. Do you remember two-face? Harvey Dent’s alter ego taught us there are always two sides to the coin.

When you’re in the business landscape, every choice you make has two sides. Same is the case when implementing ERP software. But hoo, wait a minute. Before diving into the effects of ERP systems, you’d want to know what they are, right?

We are way ahead of you. In the simplest definition, it is the savior for businesses that need to centralize their operations. No, this is not an exaggeration. That’s exactly what ERP software is.

Still looking for more clarity? Check out our previous blog on What is ERP, and you’ll have your answers.

Discussing that in this blog will be like studying Chemistry during an English class.

This blog is to enlighten you about the positives of an ERP. But is that all? Not really. Even when you pick roses, you need to be conscious of the thorns. Similarly, with all the benefits of ERPs (like the rose fragrance), you may encounter some drawbacks.

Not knowing about these drawbacks will be like entering the fighting pit with a blindfold. If you can’t see, how will you counter?

So, let’s start the discussion.

Advantages of ERP

Better Financial Asset Management

For a business, there can be multiple sources of revenue and loads of expenditures. The question now is how will you manage all these transactions? Doing it physically on a piece of paper might not be the way to go.

In such a scenario, when all else fails, an ERP can give you the desired control over your finances. With just a press of a few buttons, you can track the influx of finances, along with the expenditures.

We don’t want to bore you with financial terms like bookkeeping, receivable, payable, and other such words. And the good part is, you don’t have to. Your ERP will deal with these complications and work as your unofficial CFO.

Improved Data Reliability

Data and information are as different as drinking from a glass with and without water. Yet, both actions are the same. But, one action provides value while the other one isn’t.

In the business world, it’s more about the value you get from your actions. It can be hard to perform meaningful actions if you have large chunks of data without filters or anything.

This can change when you implement an ERP, as you will be in total control. Not only that, but you will get accurate results for all operations.

Why is it so important? Well, imagine if you had a profit or loss of 100 million, and by accident, you add an extra ‘zero.’ Your calculations will go all over the place because of one minor oversight.

That’s something you won’t have to worry about with an ERP in Pakistan.

Faster Work Processes

We’ve heard quotes like ‘Time is money’ and ‘Time is of the essence’.

You may resonate with those quotes or not. But when you’re doing business, these quotations, like many others, will hold true. If you slow down your processes, that’s just the opening your competitors need to pounce.

So, why give them that chance? You can stay steps ahead of them as you can understand the trends and adapt accordingly. Be like a chameleon and shake things up according to the happenings around you. Won’t it be cool?

Disadvantages of ERP

High Upfront Cost

There’s no such thing as a free lunch. That’s something known by people from every walks of life. So, before buying your lunch, you have to make sure it will satisfy your appetite. Similarly, when you’re implementing an ERP, be ready to lighten your pockets.

There will be a high financial cost you’ll need to pay. How can you make sure that the investment is worth it? Well, for starters, do your homework. This includes

  • Ensure you know why exactly you’re implementing an ERP.
  • Calculate the ROI of the operations that will improve because of the ERP.
  • Customize the ERP according to your requirements.

Failing to do these (and many other) processes may result in your investment transforming into waste.

Complex Data Migration

Implementing an ERP is like having a newborn child. The only difference is that you don’t replace your previous child with the newborn one, as you replace the old system with an ERP. But when it comes to making children learn how to walk, eat, or other humane functions, they’re just like the ERPs.

Like with children, it can be complicated to transfer data in ERPs. You will have to fight various struggles to get the ERP up and running, which requires patience.

In such a scenario, don’t expect your ERP to be operational from day 1. When you set up timelines for your business goals, take the data migration time into account. Else, you may start playing catch up with your business targets.

Customization is Not an Option

Do you remember (not too long ago) that we mentioned ‘customization’?

Naturally, you’d think that customization is your choice, whether to do it or continue with a generic ERP.

News flash – it’s not. Almost every business has different work processes, requiring an ERP programmed accordingly. Take for example, a service-based company will have different expectations from an ERP as opposed to a product-based company.

So, if you want to optimally use the ERP and make your investment count, customization is a must.

The Final Word

Now that you’ve come full circle and understood what ERPs can do and what situations to guard against, it’s time to act. Get yourself a full-scale ERP software with the modules you desire. Where to start looking? Well, your search starts and ends at ERInsight.

We give you a seamless ERP experience that will ease your business processes. So, start optimizing your processes today.