Proceedings

From the customer perspective an ERP can facilitate management of current
operations, improve order fulfillment, improve cash flow, integrate financial
information, improve customer services, improve production control, raise the
efficiency in production scheduling and can adapt quickly to changing market
conditions. Also, an ERP ensures the compliance with reporting requirements
imposed by law, and documents provided by internal procedures, eliminating
inconsistencies and redundancies in companies. (Hotăran & Horga, 2011)
4.2.2. Disadvantages of an ERP system
Many of the problems that organizations have with ERP systems are due to
inadequate investment in training of personnel, including those implementing and
testing changes, and the lack of a policy of protecting the integrity of data in ERP
systems and also its use.
Limitations of an ERP system include:
• Success depends on the skills and employment experience, including training
on how to use the system correctly.
• Customizing the ERP software is limited.
• Redesigning business processes to fit the industry standards set by the ERP
system, may lead to a loss of competitiveness.
• ERP vendors can charge sums of money for annual license renewal, which is
not related to the size or profitability of the company which uses ERP software.
• ERP systems are seen often too rigid and too difficult to adapt to specific
production flows of companies - this is one of the main causes of their failure.
• Refusal to provide internal confidential information between departments can
reduce the efficiency of the software.
• There are often compatibility issues with older systems used by different
partners.
4.2.3. ERP costs
Many companies classify the ERP solutions as expensive. The costs of an ERP
solution may vary depending on many factors and are, in fact, a plurality of other
costs. So, in the price cost of an ERP, we include the software licenses, the cost of
implementing the solution, maintenance costs, costs of integration with external
applications and the maintenance of those interfaces and also hardware and
telecommunications infrastructure costs. All these elements depend on the specifics of
the solution in a particular company: the processes that need to be implemented, the
number of users, duration and purpose of implementation.
Many users complain about the cost overruns from the initial budget approved for
purchasing an ERP system. The emergence of these hidden costs is caused by lack of
consistency between the position during the negotiation and implementation. In other
words, at the negotiation level, the customer requirements are at the minimum level
because they want to decline the purchase price, but during implementation, there
requests go to a maximal level, in disagreement with the initial negotiation. Secondly,
it is the cost of licenses, and this means also the cost of service configuration that
requires additional software (network, database, etc.) and also the need for
modernization of hardware that ERP providers believe that there are included in the
ERP price. Third, during implementation, with deeper understanding of the
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