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Benefits of ERP Systems

Tangible Benefits.
-Inventory reduction.
-Personnel reduction.
-Productivity improvements.
-Order management improvements.
-Financial cycle improvements.
-Information technology cost reduction.
-Procurement cost reduction.
-Cash management improvement.
-Revenue/Profit increase.
Transportation / logistics cost reduction.
-Maintenance reductions.
-On-time delivery improvements.
Intangible Benefits.
-Information visibility.
- New/improved processes.
- Customer responsiveness.
- Cost reductions.
- Integration.
- Standardization.
- Flexibility.
- Globalization.
- Supply/demand chain.
- Business performance.
- Dismantling inefficient legacy systems.
Limitation of ERP

• Large dollar investments for setup,


implementation and maintenance even for small
ERP projects
• Painful and lengthy implementation and
debugging
• High level of expertise needed for implementation
and debugging
• Multiple difficulties are hidden leading do
“doubling the time and tripling the cost” estimates
for the project
• Difficulties amplify organizational resistance to
change
Limitation of ERP – Contd.

• Strategic benefits are hard to quantify


• Targets are rarely achieved
• Plans are too ambitious (time and $$$)
• Expectations are unrealistic
• Lack of understanding of strategic benefits of ERP
implementation (follow the crowd mentality)
• Superficial implementation with a lack of
necessary infrastructure support
• Is it really worth it?