Disadvantages of ERP System

• Customization can be problematic. Compared to the best-of-breed approach, ERP can be seen as meeting an organization’s lowest common denominator needs, forcing the organization to find workarounds to meet unique demands.
• Re-engineering business processes to fit the ERP system may damage competitiveness or divert focus from other critical activities.
• ERP Solutions can cost more than less integrated or less comprehensive solutions.
• High ERP switching costs can increase the ERP vendor’s negotiating power, which can increase support, maintenance, and upgrade expenses.
• Overcoming resistance to sharing sensitive information between departments can divert management attention.
• Integration of truly independent businesses can create unnecessary dependencies.
• Extensive training requirements take resources from daily operations.
• Due to ERP’s architecture (OLTP, On-Line Transaction Processing) ERP systems are not well suited for production planning and supply chain management (SCM).
• Harmonization of ERP systems can be a mammoth task (especially for big companies) and requires a lot of time, planning, and money.

Recognized ERP limitations have sparked new trends in ERP application development. Development is taking place in four significant areas: more flexible ERP, Web-enabled ERP, inter-enterprise ERP, and e-business suites.

Source:Wikipedia