A Digital Portfolio by, Lukman J.
ERP systems have been in existence for over two decades, and have been significant in the planning processes of businesses. Initially ERP systems were designed purposely for inventory management (Quirk, 2019). Today, these systems are comprised of numerous components that ensure the smooth running of all activities in the business. The modern ERP systems cover human resources, procurement, supplies, manufacturing, customer relationship management, inventory management and finally business intelligence. While traditional ERP systems are single platforms, modern systems are known to cover multiple business functions. This makes modern ERP systems more flexible than traditional systems because they can be used for different business activities. Modern ERP systems can also be customized depending on the needs of the business (Panorama Consulting Group, 2018). This is unlike traditional systems which have a single function and purpose. One cannot compare the benefits that modern ERP systems bring to the business. It actually gives them a competitive advantage over their competitors who are utilizing traditional ERP systems.
So why have some businesses not using modern ERP systems yet?
The major reason is the cost of modern ERP systems which is relatively high especially for small and medium sized businesses. In reality however, the cost of maintenance for traditional ERP system is high as it involves upgrades on hardware. With the modern ERP systems updates are cloud based and occur regularly and automatically when available. The costs are basically reduced by the cost of maintenance of the software. The traditional ERPs actually use the host’s infrastructure and rely on the IT department to manage it including the hardware updates (Mirelle, 2017). This can be quite costly for the company and the productivity of the system may be lowered. It is, therefore, easier to engage the services of a vendor who is reputable and they will manage the system for the company.
References
Mirelle, J. 2017. Traditional Vs. Modern ERP Systems. Altron Karabina. Available at: https://altronkarabina.com/traditional-vs-modern-erp-systems/
Panorama Consulting Group, 2018. How Post Modern ERP Software Differs from Traditional ERP. Available at: