These are the potential benefits and pitfalls of SAP software:
Advantages | Disadvantages |
1. Allows easier global integration (barriers of currency exchange rates, language, and culture can be bridged automatically). | 1. Locked into relationship by contract and manageability with vendor - a contract can hold a company to the vendor until it expires and it can be unprofitable to switch vendors if switching costs are too high. |
2. Updates only need to be done once to be implemented company-wide. | 2. Inflexibility - vendor packages may not fit a company's business model well and customization can be expensive. |
3. Provides real-time information, reducing the possibility of redundancy errors. | 3. Return on investment may take too long to be profitable. |
4. May create a more efficient work environment for employees. | 4. Implementations have a risk of project failure. |
5. Vendors have past knowledge and expertise on how to best build and implement a system. |
