Topic > Advantages and Disadvantages of Enterprise Resource Planning

Enterprise Resource Planning (ERP) System Cost: Enterprise Resource Planning (ERP) systems are structured to enable companies to make more efficient decisions by improving access to data. Unfortunately, sometimes, the company's wrong decision on ERP maintenance costs leads to huge financial losses (Fryling and Adviser-Richardson 2010). ERP is a continuous process, therefore a proper estimate of implementation costs and recurring maintenance costs is required. According to research, the success rate of ERP implementation is 33% and it has also been studied that about ninety% of ERP implementation is overkill. budget (Martin, 1998). In addition to all this it is also evident that there are many hidden costs in ERP implementation (Lindley, Topping & Lindley, 2008). The expenditure for the implementation of the ERP system represents approximately ninety percent of the overall expenditure of the system (Francalanci, 2001 and Patrick, 1995). Chen (2001) studied that few companies frame the implementation costs of their enterprise resource planning system as sixteen% software, thirty-two% hardware, thirty-eight% systems integration, and fourteen% personnel (Malhotra & Temponi, 2010 ). Below are the main cost points in detail: • Design implementation: ERP system integrates all divisions of the company via a database and software which in turn makes the system more flexible and perfect for the competing market (Bingi , Sharma and Godla, 1999). Therefore, analyzing various business perspectives and creating a business plan will give the idea of ​​selecting the right system and all this will provide further information for designing new processes (Ehie & Madsen, 2005). • Software: Third party ERP system software is many times customized......middle of paper......w ERP system has brought many positive changes to the company. Customer service has been improved and Omantel has made a new mark in Oman in the telecom sector. In addition to all these benefits there was only one element that was not done properly and that was employee training (Maguire, Ojiako, & Said, 2010). Conclusion: By adding all the above elements and the case study we can say that the cost of ERP implementation is influenced by many elements. Any company thinking of upgrading their company with ERP system should consider all the segments before implementing it. Despite these, the technology has developed a lot and is therefore not as expensive as it was in the past. Furthermore, in this globalized world in which more and more multinational companies are growing, it is necessary for companies to have a system capable of integrating all data and providing a common platform.