Advantages and Disadvantages of Enterprise Resource Planning (ERP) Solutions

Deciding which technologies your businesses should and should not invest in is difficult. On one hand, you want innovation and growth within your company but want to keep the costs down. Whether your company is small or big, having ERP solutions for your company comes with many gains.

Enterprise resource planning software (ERP) is a customizable app that allows companies to integrate and manage organizational functions. Although the system has many advantages, it is not all smooth sailing; ERP has its disadvantages, too.

Advantages of ERP

  • Improved Organizational Control

Implementing an ERP suite ensure your there is uniformity in collection of data across departments giving you a unified reporting system. The ERP system can readily generate useful reports and analytics at any time it is needed. This software offers the user’s ability to analyze and compare data across departments, without the hassle of multiple spreadsheets and emails. 

ERP also offers business intelligence services, which allow businesses to gain a deeper level of analytical insight into their operations. This in turn leads to better decision making because the management has accurate and complete information.

  • Data Security

One of the advantages of ERP software is data security. Sharing data across various departments enhances collaboration in the organization. Controlling this data is made easy because the company can control who has access to it and who can edit it. ERP solutions have intrinsic controls to ensure your data is secure.

Since data comes from a single input, ERPs maintain a high level of data security. Integrating information from multiple departments often causes conflicts between sources, but having a single stream of data helps improve accuracy, consistency, and security of a company’s data.

  • Standardized Business Processes

ERP software are developed according to industry best practices. They undergo intensive testing to ensure the software is working at its optimum to bring significant benefits to businesses of all sizes. It also allows companies to standardize their processes and systems, which further enhances productivity and efficiency. Many of the processes are automated, so errors and costs are significantly reduced.

  • Improved Efficiency

Having an ERP system lowers IT and training costs since the whole system is integrated, so the of time and effort required to carry out daily activities is reduced. The system ensures there is no duplicated information leading to better use of time.

Disadvantages of ERP

ERP systems have many benefits buts its essential to understand their drawbacks to make sure you get the system is right for your org.

  • The Cost of The ERP Software

If you choose to have a traditional ERP system installed in your premises, this will cost a lot of money and space. The upfront cost of installing it can be prohibitively high. Small business can avoid this by opting for a cloud ERP, which is significantly lower.

  • Maintenance Costs

While the software itself is a major investment, maintenance can cost nearly three times the cost of the software. Management must take into account the cost of human resources and time it will take for the system to work. You will need to hire additional skilled IT experts and consultants to run and customize it to your needs.


Everything that has its advantages also comes with its disadvantages. This also applies to ERP. It’s up to you to weigh the two and decide whether it is worth it for your business.