University of Management and Technology, Sialkot

Database Management System

Assignment #2
Why do we need ERP? State its Advantages & Disadvantages.

Grade: - ______________
Date: - 08 October 2017

Submitted by: - Submitted to: -

Full Name: Wania Nadeem
Program: BBIS Sir Farhan
Complete Registration No.: 16003054-004
 Why Is ERP Required?
Enterprise Resource Planning (ERP) system also known as a Centralized
system is a software application that provides data necessary for the
enterprise to examine and manage the activities.

Every business tends to have their own objectives which they want to
achieve. To run a large organization with multiple departments and teams
successfully, ERP system would be suitable as it provides a central
location to access data & retrieve information from various departments in
no time. Thus, allowing a smooth functioning of an enterprise. Because, in
a decentralized system, the data is maintained locally within the individual
department which prevents other department from accessing their
information hence causing lack of timely information being available to
others which results in loss of revenue and customer satisfaction if
customer request takes longer to process, as each department would be
needed to be addressed separately to retrieve the required information.

To conclude, the success of an enterprise depends upon effective

communication and data exchange within the different departments and a
successfully integrated ERP system will allow the company to act as single
computer system that will be able to serve all the different department's
particular needs.
The following are the Advantages & Disadvantages of using an ERP
system for an enterprise:

Advantages:

1. All departments update a central information system providing real-

time information across different departments and immediate
responses
2. Eliminate the duplication, inconsistency and discontinuity in data.
Thus reducing cost
3. Provides control over various business process as it allows
employees to acquire the relevant information that is necessary to do
their job
4. Improved customer service through better customer interaction as an
ERP system would allow access to accurate and updated data
5. Provides security as centralized security policies can be applied
allowing the transactions happening via ERP system to be tracked
6. Enable better and faster collaboration across all the departments.

Disadvantages:

1. Implementation of ERP systems in an organization with disparate

business process and systems can prove to be time & money
consuming
2. The cost of implementing an ERP system is too high
3. The success depends upon the skills and experience of the
workforce, including education and how to make the system work
properly.
4. The effectiveness of the ERP system may decrease if there is
resistance to share information between business departments or
when the workforce is poorly trained