What Are Some Benefits and Challenges of Enterprise Systems?

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Enterprise systems can integrate business processes such as sales, financial management, human resource management and inventory management into a single platform that makes it easier for you and your employees to do your work and get access to key data that you need. Consider the advantages and disadvantages of enterprise business systems to get the most benefits for your small business.

TL;DR (Too Long; Didn't Read)

Enterprise systems offer benefits in terms of easier business planning, improved record keeping and higher productivity. However, there are also challenges when it comes to the investment cost, effort and risks of using such systems.

Better Productivity and Flexibility

The main benefit of an enterprise system is that it makes the jobs of managers and employees easier. These systems automate repetitive business processes so that your staff is more productive. For example, these systems might send sales emails, process employee pay or even place automated inventory orders.

At the same time, these systems help organize key information in a place for easy access regardless of location. That means your employees will all have access to the data necessary to do their jobs even if they work from home or do field work.

Easier Business Planning

Another benefit of enterprising systems is that they make it easier to make business plans and track how your company is reaching its goals. Whether you want to check how production is going, monitor your business expenses or see customer satisfaction results, it's often as easy as taking a look at an online dashboard that groups this information into easy-to-read charts and tables.

These systems also have alert capabilities that can inform you when potential problems occur, such as a spike in product defects or a low inventory.

Improved Record Keeping and Compliance

Using enterprise systems can also benefit your company when it comes to record keeping and compliance. Thanks to built-in security systems, the data you collect in enterprise systems is less at a risk for loss or theft, although the risk is not zero.

At the same time, that data is of use when you need proof of your business's performance for some regulatory body. The University of Scranton suggests that these systems make it easier to meet the Sarbanes-Oxley Act's requirements regarding inventory and asset management.

Cost Challenges of Enterprise Systems

One of the challenges of enterprise systems for small businesses is the cost of investment, which will ultimately depend on the number of users, level of customization, license type (perpetual or subscription) and desired application modules. Depending on the system you choose, you may pay yearly subscription fees and maintenance costs that go beyond the initial license fee, and you might have to buy new hardware as well.

Generally, cloud-based enterprise systems are more affordable initially. For example, Software Advice listed an estimated budget of $87,209 for a cloud-based enterprise system for 21 to 50 users versus $205,533 for a perpetual license.

Additional Work for Implementation

Another challenge is the additional work you'll have to do to get the system ready for optimal use in your company. You'll likely need to customize the modules for what you need to do in your business, train your employees on how to use the systems and possibly migrate data from an existing system. At the same time, you'll have to convince your employees and managers to actually want to use the system.

All of these require time that you'll have to take away from other business tasks. This can be a challenge if you're already struggling with other demands.

Data Loss and Downtime Risk

While enterprise systems come with security and accessibility benefits, there is a downside to relying on a single system for your business's most important processes. If someone from inside or outside the company hacks your system, you risk that person getting confidential data. Also, if something in the system fails, your company may experience downtime that leaves workers unable to do their jobs and customers without their needs met. You could even lose key information if backups aren't regularly performed.

References

About the Author

Ashley Donohoe started writing professionally about business topics in 2010. Having eight years experience running all aspects of her small business, she is knowledgeable about the daily issues and decisions that business owners face. She also has earned a Master of Business Administration degree with a leadership and strategy concentration from Western Governors University. Some other places featuring her business writing include JobHero, LoveToKnow, PocketSense, Chron and Study.com.

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