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30 Chapter 1 • Introduction to Enterprise Systems for Management

TABLE 1-3 System Benefits and Limitations of ERP
Benefits Limitations
Integration of data and applications across Data conversion and transformation from an old to
functional areas of the organization. This a new system can be extremely tedious and
means data can be entered once and used by complex process.
all applications in the organization, improving
accuracy and quality of the data.
Consistency of the user interface across Consolidation of IT hardware, software, and
various applications means less employee people resources can be cumbersome and
training, better productivity, and cross- difficult to attain.
functional job movements.
Maintenance and support of the system Retraining of IT staff and personnel to the new ERP
improves as the IT staff is centralized and is system can produce resistance and reduce
trained to support the needs of users across productivity over a period of time.
the organization.
Security of data and applications is enhanced Complexity of installing, configuring, and
due to better controls and centralization of maintaining the system increases, thereby requiring
hardware, software, and network facilities. specialized IT staff, hardware, network, and
software resources.

TABLE 1-4 Business Benefits and Limitations of ERP
Benefits Limitations

Agility of the organization in terms of responding Change of business roles and department
to the changes in the environment for growth boundaries can create upheaval and resistance to
and maintaining its market share in the industry. the new system.
Linking and exchanging information in real Retraining of all employees with the new system
time with its supply chain partners can improve can be costly and time consuming.
efficiency and lower costs of products and services.
Efficiency of business processes are enhanced High initial costs of purchasing software,
due to business process reengineering of consultant costs, and disrupting the work flow of
organization functions. employees.
Quality of customer service is better and To a degree, the company implementing vanilla
quicker as information flows both up and (as-is) ERP may lose its competitive advantage
down the organization hierarchy and across all when all businesses have the same standardized
business units. business processes.
Sharing of information across the functional
departments means employees can collaborate
easily with each other and work in teams.
Reduction in cycle time in the supply chain from
procurement of raw materials to production,
distribution, warehousing, and collection.