SAP Advantages and Disadvantages Explain

SAP is the world’s leading provider of business software – enterprise resource planning, business intelligence, and related applications and services that help companies of all sizes and in more than 25 industries run better. The main advantages and disadvantages are,

SAP Advantages and Disadvantages,

SAP Advantages:

1. Integration Integration can be the highest benefit of them all. The only real project aim for implementing ERP is reducing data redudancy and redudant data entry. If this is set as a goal, to automate inventory posting to G/L, then it might be a successful project. Those companies where integration is not so important or even dangerous, tend to have a hard time with ERP. ERP does not improve the individual efficiency of users, so if they expect it, it will be a big disappointment. ERP improves the cooperation of users.

2. Efficiency Generally, ERP software focuses on integration and tend to not care about the daily needs of people. I think individual efficiency can suffer by implementing ERP. the big question with ERP is whether the benefit of integration and cooperation can make up for the loss in personal efficiency or not.

3. Cost reduction It reduces cost only if the company took accounting and reporting seriously even before implementation and had put a lot of manual effort in it. If they didn’t care about it, if they just did some simple accounting to fill mandatory statements and if internal reporting did not exists of has not been fincancially-oriented, then no cost is reduced.

4. Less personnel Same as above. Less reporting or accounting personnel, but more sales assistants etc.

5. Accuracy No. People are accurate, not software. What ERP does is makes the lives of inaccurate people or organization a complete hell and maybe forces them to be accurate (which means hiring more people or distributing work better), or it falls.

Disadvantages:

1. Expensive This entails software, hardware, implementation, consultants, training, etc. Or you can hire a programmer or two as an employee and only buy business consulting from an outside source, do all customization and end-user training inside. That can be cost-effective.

2. Not very flexible It depends. SAP can be configured to almost anything. In Navision one can develop almost anything in days. Other software may not be flexible.

Here the Key Advantages of SAP

• Covers Many Business Functions
• Strong Workflow Capabilities
• Can Handle Many Different Types of Complex Transactions – Data Entered One time, One Place, At the Source
• Implemented in Many Large, High-Tech Firms
• Impressive process and data documentation
• Supported by ALL Major Hardware Vendors

Disadvantages of SAP

• Expensive
• Very Complex
• Demands Highly Trained Staff
• Lengthy Implementation Time
• Inter-modules functions least understood by business, but high on list of reasons to buy
• Creates internal conflict in organizations
• SAP rolls out new versions every 6 months

Also See: What is Dunning Procedure in SAP?