From the course: SAP ERP Essential Training

Benefits and limitations of SAP ERP - SAP ERP Tutorial

From the course: SAP ERP Essential Training

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Benefits and limitations of SAP ERP

- [Instructor] There are a number of benefits and limitations of using SAP. Companies spend a great deal of time and money weighing these pros and cons, when they're deciding whether to implement SAP. Let's take a look at some of the most common benefits and limitations. First, we'll look at the benefits. Why would a company spend so much time and money getting rid of their old systems and transitioning to SAP? First, SAP eliminates information silos and standardizes data across an entire company or multiple companies. For example, instead of having one system that handles all of your company's suppliers and a different software that handles all your company's inventory, all of this information is kept current in SAP. As a result of all the company's data being standardized in one system, SAP can be set up to automate a business's core processes. Let's talk about an example of this automation. If there's a part that needs to be ordered every time your inventory starts to run low, rules can be set up to automatically order the new parts from your preferred supplier when stocks hit a lower limit. Also SAP ERP enables better decision-making because all of the businesses processes are in one system. You can create powerful real-time reports that provide in-depth data. Having access to this information in real time, allows decision makers to collaborate, solve problems, and recognize opportunities on the fly. Finally, SAP is known for robust security and compliance functions. SAP's role design feature allows for appropriate segregation of duties. Ensures that the right people have access to things like sensitive information or the ability to make business decisions. It's also possible to customize SAP configuration settings with a company's policies, ensuring compliance across the system and with government regulations. Now let's have a look at a few of SAP's limitations. SAP is notorious for a very high total cost of ownership or TCO. The software is expensive to implement and maintain. Not only is it expensive, it can take years to implement SAP across an entire organization. SAP is highly configurable and because every company is unique, customizing SAP to fit a business can result in unexpected multi-year implementations. Finally, the software itself can be really challenging at first for end-users. There's a steep learning curve that requires proper training for users to get up to speed. In companies where people have been doing their job a certain way for years, there can be huge resistance to change. These growing pains have to be addressed proactively with a robust training strategy to get users up to speed. There are a number of both benefits and limitations for companies that use SAP ERP.

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