- [Instructor] There are a number of benefits
and limitations of using SAP.
Companies spend a great deal of time and money
weighing these pros and cons,
when they're deciding whether to implement SAP.
Let's take a look at some of the most common benefits
and limitations.
First, we'll look at the benefits.
Why would a company spend so much time
and money getting rid of their old systems
and transitioning to SAP?
First, SAP eliminates information silos
and standardizes data across an entire company
or multiple companies.
For example, instead of having one system
that handles all of your company's suppliers
and a different software that handles
all your company's inventory,
all of this information is kept current in SAP.
As a result of all the company's data
being standardized in one system,
SAP can be set up to automate a business's core processes.
Let's talk about an example of this automation.
If there's a part that needs to be ordered
every time your inventory starts to run low,
rules can be set up to automatically order the new parts
from your preferred supplier when stocks hit a lower limit.
Also SAP ERP enables better decision-making
because all of the businesses processes are in one system.
You can create powerful real-time reports
that provide in-depth data.
Having access to this information in real time,
allows decision makers to collaborate, solve problems,
and recognize opportunities on the fly.
Finally, SAP is known for robust security
and compliance functions.
SAP's role design feature
allows for appropriate segregation of duties.
Ensures that the right people have access to things
like sensitive information
or the ability to make business decisions.
It's also possible to customize SAP configuration settings
with a company's policies,
ensuring compliance across the system
and with government regulations.
Now let's have a look at a few of SAP's limitations.
SAP is notorious for a very high total cost of ownership
or TCO.
The software is expensive to implement and maintain.
Not only is it expensive,
it can take years to implement SAP
across an entire organization.
SAP is highly configurable
and because every company is unique,
customizing SAP to fit a business
can result in unexpected multi-year implementations.
Finally, the software itself can be really challenging
at first for end-users.
There's a steep learning curve
that requires proper training for users to get up to speed.
In companies where people have been doing their job
a certain way for years,
there can be huge resistance to change.
These growing pains have to be addressed proactively
with a robust training strategy to get users up to speed.
There are a number of both benefits
and limitations for companies that use SAP ERP.