3 Advantages And 2 Disadvantages Of The ERP System

Today, running a successful business relies on the adoption of new business technology. This is a practice of utilizing scientific knowledge or automated tools to complete tasks. 

Gaining a competitive advantage is just one of many reasons to upgrade your business. Any business would want to utilize technology for various reasons. But the most important one is to enhance efficiency or productivity. Therefore, you should consider implementing new technologies in your business organization. 

There are various ways of integrating modern technologies into your business systems. And one of them is installing enterprise resource planning (ERP) software. 

This article provides an overview of ERP software. It also details some advantages and disadvantages of using it in your business. 

An Overview Of ERP Software 

ERP software is a computer program, or application businesses use to control daily activities. These include managing plant equipment maintenance, accounting, marketing, procurement, etc. Therefore, ERP software helps bring all the business systems together.  

You might think that ERP software eliminates the need for each department to have its own application. But that isn’t true. Each department will still work independently using its specific tools. However, ERP software enables you to access and manage all the business systems from a centralized location.  

Advantages Of ERP Software

There are several advantages of installing ERP software in your business system. They include the following: 

1. Leads To Improved Communication 

Internal communication forms an integral part of running a successful business. It ensures that the necessary information to complete tasks is distributed or shared with teams. However, that might not be possible without effective communication. 

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One of the most effective ways of promoting internal communication is utilizing ERP software. It helps eliminate communication delays between departments. That’s true since the head of each department can access any information from their offices. As a result, your organization will have better coordination and collaboration.  

2. Helps Reduce Costs

You must reduce costs to grow your firm in no time. Reding costs helps maximize profits and save money. It’s, therefore, essential to find practical approaches to minimizing business costs. That’s where the power of ERP software manifests itself. 

You might argue that purchasing, installing, and maintaining ERP software will attract extra costs to your company. While that’s it, using it can save you a lot of money in the long run. 

For instance, you can use the system to enter data into business systems instead of doing it manually. That helps eliminate the need to hire several workers. As a result, you’ll significantly reduce your wage bills.  

3. Allows You To Gain A Competitive Edge 

High market competition can be a great threat to the growth of your company. This is true since you won’t be able to connect with your customers. And therefore, you won’t generate your desired sales. But you can install ERP software to make things a lot easier.  

In addition to boosting communication, ERP helps increase productivity. For instance, it ensures workers complete tasks within the shortest time possible. Therefore, they can produce more output in a day. That goes a long way towards enhancing your revenues and profits. And the more sales and profits you generate, the higher the chances of gaining a competitive edge.  

Disadvantages Of ERP Software 

As you can see from the previous section, there are unlimited benefits to utilizing ERP software in your business. But you may ask, are there any disadvantages of implementing ERP technology in a business? The answer is definitely, ‘Yes.’  

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And understanding some of these disadvantages will help you to know whether the system is worth investing in. That said, some disadvantages of ERP software include the following:  

1. It Can Be Expensive To Launch

One of the big disadvantages of implementing ERP software is the huge initial capital outlay requirements. For instance, it can be too expensive to purchase and install. And even after installation, you might require to hire experts to educate employees on how to use the systems. For that reason, most small businesses find it challenging to implement ERP technology into their systems. 

While that’s the case, all isn’t lost. You can find external financing options like applying for loan banks to find the money for ERP implementation.  

2. Can Take Time To Be Fully Implemented

Indeed, ERP can help save time after a successful implementation. However, it can take much of your time, especially during the initial stages of implementation. 

For instance, you’ll have to transfer data manually from your old system to the ERP software purchased. However, the time it takes really depends on your sector and the amount of data you want to input if you’ve got a lot of data, the more time the process will take.  


Implementation of ERP technology has both benefits and disadvantages. However, advantages are more than disadvantages. Therefore, installing the software into your business systems is necessary. Make sur4 you find the best system for your company’s needs.

Jonathon Spire

Jonathon Spire

Tech Blogger at Jonathon Spire

My diverse background started with my computer science degree, and later progressed to building laptops and accessories. And now, for the last 7 years, I have been a social media marketing specialist and business growth consultant.

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Jonathon Spire

I blog about a range of tech topics.

For the last 7 years I have been a social media marketing specialist and business growth consultant, so I write about those the most.

Full transparency: I do review a lot of services and I try to do it as objectively as possible; I give honest feedback and only promote services I believe truly work (for which I may or may not receive a commission) – if you are a service owner and you think I have made a mistake then please let me know in the comments section.

– Jon