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SAP – ERP (Enterprise Resource Planning)

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Advantages and Disadvantages of ERP

There are many potential benefits of Enterprise resource planning. It makes the business processes better and has advantages both in internal processes and external processes. Benefits of ERP are as below:

Internal Benefits

  • Integration of a single source of data.

  • Control over various business processes.

  • Eliminates duplication of data.

  • Increased productivity and inventory management.

  • Promotes the Quality of products.

  • Reduces operating costs.

  • Improves internal communication. 

  • Inventory planning reduces material costs.

External Benefits

  • Improved customer services.

  • Better Order fulfillment.

  • Communication improvement with suppliers.

  • Increased sales and profit.

  • Effective Human Resource management(HRM).

  • Enhanced Competitive Position.

However, there are numerous advantages of ERP, and there are a few disadvantages of using ERP as below:

  • The high cost of purchasing the software.

  • High cost and efforts for implementing the program.

  • Labor and training costs are huge.

  • The software requires periodic upgrades.

  • The system is quite complex and takes years to complete the implementation.

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