limitations of erp

**limitations of erp Sys**tems are too restrictive and do not allow much flexibility in implementation and usage. The system can suffer from the "weakest link" problem—an inefficiency in one department or at one of the partners may affect other participants. Many of the integrated links need high accuracy in other applications to work effectively. A company can achieve minimum standards, then over time "dirty data" will reduce the reliability of some applications. Once a system is established, switching costs are very high for any one of the partners (reducing flexibility and strategic control at the corporate level). The blurring of company boundaries can cause problems in accountability, lines of responsibility, and employee morale. Resistance in sharing sensitive internal information between departments can reduce the effectiveness of the software.

Personnel turnover; companies can employ new managers lacking education in the company's ERP system, proposing changes in business practices that are out of synchronization with the best utilization of the company's selected ERP. Customization of the ERP software is limited. Some customization may involve changing of the ERP software structure which is usually not allowed.

Personnel turnover; companies can employ new managers lacking education in the company's ERP system, proposing changes in business practices that are out of synchronization with the best utilization of the company's selected ERP. Customization of the ERP software is limited. Some customization may involve changing of the ERP software structure which is usually not allowed. Re-engineering of business processes to fit the "industry standard" prescribed by the ERP system may lead to a loss of competitive advantage. ERP systems can be very expensive to install often ranging from 30,000 to 500,000,000 for multinational companies.

-- High cost. -- Forced change of processes. -- Very complex software. -- Lack of trained people. -- Flexibility of software system upgrades. -- Implementation timelines. -- Availability of internal technical knowledge and resources. -- Education and training. -- Implementation strategy and execution.

**LIMITATIONS OF ERP** 1. Difficult to implement in running businesses Implementing an ERP system in a new business can be very effective. Implementing the same system in an older business can be very difficult. All employees must be trained, and there will be significant down time as the business switches all applications over to the new system. Some businesses cannot afford the profit loss this downtime would require. ERP systems also tend to have industry standards for specific types of businesses, and the strict moulds may lower creativity or competitive advantage. 2. Customization is problematic Every business has its own requirement and there is no ERP which may be suited for all business’s requirement so to implement an ERP system in an organisation, first the detailed study about the different processes of a business is done and then various customizations is done to make the ERP suitable for a particular organisation requirement. The customization process involves lot of money and resources which works as a limitation to the implementation of an ERP system in an organisation. 3. Policy Limitations ERP systems do not fit the business plans of every enterprise. Often, ERP systems must be customized to allow for specific tasks. Not all ERP systems allow this—depending on the system or company the business uses, it may be against policy to make such drastic changes to the application. 4. Ongoing Support Support for ERP systems often can be difficult to depend on. Technical response can be adept at dealing with minor problems, but major complications with the ERP systems can be beyond the limited customer service available to businesses. 5. Lack of user participation in ERP implementation The participation of users is very important for successful implementation of ERP projects – So, exhaustive user training and simple user interface might be critical. Moreover involvement of key users at the pre implementation stage and implementation stage is very important and lack of their involvement acts as a limitation for ERP system. 6. Problem of Harmonization of ERP processes with the business processes Harmonization of ERP systems can be a mammoth task (especially for big companies) and requires a lot of time, planning, and money. 7. Resistance to change Implementing ERP system in an organisation requires lot of process changes, starting new process etc. In this process, certain people’s profile gets redundant and they need to transfer to other processes. Moreover implementing ERP requires people to new the new processes and technologies. All this become a reason of resistance by people which works as a big limitation for ERP implementation. Thanks

Dear Uma > Limitations of ERP -- High cost. -- Forced change of processes. -- Very complex software. -- Lack of trained people. -- Flexibility of software system upgrades. -- Implementation timelines. -- Availability of internal technical knowledge and resources. -- Education and training. -- Implementation strategy and execution. -- Resistance to change. -- Not Internet-ready. Managers cannot generate custom reports or queries without help from a programmer and this inhibits them from obtaining information quickly, which is essential for maintaining a competitive advantage. ERP systems provide current status only, such as open orders. Managers often need to look past the current status to find trends and patterns that aid better decision – making. The data in the ERP application is not integrated with other enterprise or division systems and does not include external intelligence.