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The Disadvantages of Enterprise Systems

Updated April 17, 2017

Enterprise systems play important roles in large companies. These systems help companies perform essential tasks, such as deciding the best ways of how to create products, tracking orders, and incorporating profits, costs and revenues. Enterprise systems are large-scale applications that allow companies to incorporate and organise their business processes. These systems can make sure that all of the company's departments can share vital information with each other. Although there are many advantages for installing enterprise systems, there are some downsides.

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Implementing and managing enterprise systems can be expensive, especially for small and medium-sized businesses (SMBs). SMBs usually do not have the resources and money. For example, companies need the right people to make sure that their data is protected. Large companies can afford to hire the consultants who specialise in this area. The costs to install enterprise systems, for multi-corporations, can range from approximately £19,500 to £325 million. Another cost that companies face is licenses. Companies purchase licenses in order to receive services, such as technical support or getting software patches or upgrades. Finally, another cost can be where enterprise systems cannot integrate with the company's legacy systems. Legacy systems are older applications or computer systems that the company has been using for a long time. These systems contains important data that the company that it still needs and uses. In order to get the enterprise system to work with legacy applications, the company might have to purchase new computers, servers, or applications. It might also have to hire some additional consultants to complete this project.

Training and Turnover

If the enterprise system is to be successful in an organisation, it must have employees who know how to use it. The company must provide comprehensive training. However, many companies have ignored this area because it is costly. Even if the employees have been trained, they could leave the company, taking the knowledge with them. The company may also hire new managers that do not know very much about the system. They can recommend changes to the business processes that are not in line with the company's policies. As a result, this can hurt the business' bottom line.

Difficult to Customize

Tailoring the enterprise system to the company's preferences can be a challenge. It is very rare that companies will accept enterprise systems as they are. Therefore, employees or consultants can spend a large amount of time on programming or talking to the enterprise system's technical support in order satisfy the customer's requirements.

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About the Author

Based in Atlanta, Felicia Blue has been writing articles since 1992. Her articles have been featured in the Cleveland Plain Dealer newspaper, “Crain’s Cleveland Business” magazine and “Destiny” magazine. She has also written for IBM, Sun Microsystems and HP. Blue holds a Bachelor of Arts in English Literature from University of California, Los Angeles.

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