Implementation of ERP software involves the integration of all the vital functional units of an organization into a unified system, to enable a free flow of data and information, with the objective of better productivity and profit. This technical changeover does produce many positive results, but the pitfalls of ERP software cannot be neglected either.
Firstly, the complexity of this software regarding implementation, up gradation, maintenance and customization creates many problems, and if these aspects are not dealt carefully, it may lead to the total failure of the system.
Secondly, the designing of the ERP software may pose compatibility problems with the existing software of the organization. Lack of compatibility reduces the efficiency of the ERP software. This hampers the proper flow of data and information that will have a negative impact on the productivity.
Implementation of ERP software involves huge capital investments, which can be a serious burden for middle and small business enterprises. To prevent huge expenditure in procuring various software and hardware equipments, many small organizations retain their previous infrastructure, which prevents them to extract the maximum benefit of ERP. In addition to these, costs involved in training the in-house members, hiring experts and other hidden costs involved in up gradation and customization becomes a huge burden for every organization.
It takes years to implement the full software package, and very few organizations are in the position to bear this wastage of time that affects the business of the organization.
There always remains a hidden concern regarding the planning in ERP implementation, as some flaws in the planning may lead to the total failure of the ERP system resulting in heavy financial loss.
ERP software provides high security to all the important data and information of an organization, provided this security is properly maintained. If there is any faltering in the maintenance, the organization may suffer seriously. Highly paid officials are generally hired for this purpose, which is an extra burden to the organization.
If any unit of an organization enters incorrect data, it will affect the functioning of other units working downstream, which can reduce the efficiency of the ERP system.
Sometimes the manufacturing unit needs a lot of changes according to the market requirements and the previously installed ERP cannot cope up to the changes and becomes obsolete resulting in severe loss of the organization.
The organization undergoes a drastic change with the implementation of ERP. Although the change is very much necessary, it creates panic among the staff, and they resist such changes. Their accountability will be questioned very often, which will not allow them to relax.
