The Advantages and Disadvantages of an ERP system

Nov 10, 2022

As an organisation, you cannot avoid adopting an ERP at some point. After all, at some point you lose track of what is going on within the organisation, and the move is made to an ERP system in order to streamline all processes.

What is an ERP?

ERP or enterprise resource planning is software that manages and automates all business processes. An ERP system covers all business processes so that everything is linked together and there is only a single system to work in.

Advantages and disadvantages of an ERP in short


  • Increased productivity
  • Cost savings
  • Scalability
  • Data management
  • Better document management


  • Required implementation hours
  • Investment
  • Data migration
  • No guarantee of success

Advantages of an ERP system

Increased productivity

Productivity simply cannot be brought to an optimal point when working in different systems. Simple tasks like moving customer data, sending quotes and invoices, etc. all take up unnecessary time.

Adapting an all-in-one ERP system could be the improvement your organisation needs to take growth and profitability to the next level.

Cost savings

Although it may not seem so at first glance, switching to one system often saves costs, especially in organisations that have grown to 20+ employees and especially when you factor in the time savings on which costs are saved.

One system also means that you always know what your costs are and don’t have to calculate them extensively based on all different invoices. This gives clarity and simplifies accounting.


In a fragmented IT landscape, without you perhaps realising it, you quickly find yourself working with 10 to 20 different applications, all of which you have to scale up or down individually. As an organisation, you find it important that the software can grow with you, and with an all-in-one system, this takes minutes instead of hours.

Data management

Good use of data is something that few organisations use yet, and can benefit enormously from. Many organisations provide services and turn revenue from this, but don’t actually know how much that revenue cost, where it came from and how performance is evolving.

This is not surprising in itself, because as a company you cannot have a real-time overview of your activities and performance if you are working from different applications and they are not linked with one another.

One system means everything is integrated with each other, allowing you to make use of clear dashboards and know where your organisation stands and is going at all times.

Better document management

Organisations using an all-in-one software system benefit from a centralised document management system that can be accessed from anywhere. You can find documents faster, secure them more easily and merge them easily. As a result, all data is always together, in the right place and you never lose files.

Disadvantages of an ERP system

Required implementation hours

Implementing an ERP system requires a lot of implementation hours in the first few weeks or months. You will have to configure the software to your organisation’s way of working before the ERP is fully deployed.

Next, employees will have to learn how to use the software which, depending on the package, can also be time-consuming. Therefore, check carefully whether the ERP system you are considering is easy to use and user-friendly.


The initial investment can also be seen as a drawback. This involves costs for onboarding, consultancy and any links required for you.

Migration of data to new system

There is no getting around this if you are going to use an ERP system. Every system has its own way of how the data is stored and in most cases, migration, in part, involves manual work.

Map out in good time which data you are going to need in the future and cannot lose. This allows you to transfer all your data in one go and you run less risk of forgetting something.

No guarantee of success

However great the benefits of an ERP package are for your organisation, this does not immediately mean that it will be a success. The strength of an ERP is that all processes can be captured in one system, and if some of the employees do not embrace the system, this can greatly reduce the chances of success.

Spend an afternoon to give your staff proper training so that key aspects of the ERP system are gone through with the staff.


As you can read, ERP software can make an important contribution to streamlining business processes and help maintain an overview within the organisation. The main disadvantages of an ERP system can be seen as challenges that occur mainly in the implementation phase. After the implementation phase, organisations will mainly experience the benefits mentioned above.