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How BPM differs from an
ERP
Here in this blog I
would like to explain about BPM, Business Process Management and how it differs
from an ERP.
ERP is
focused on integration of information across business functions (like HR,
Procurement & Sales) by sharing a common database. Whereas BPM is a
business practice focused on enterprise level workflows and aimed at
optimizing, improving and automating business processes. We can describe BPM as
a process-intelligent layer that may or may not integrate with ERP.
To explain about ERP, consider an example business
activity – Sale of ‘n’ Qty of product ‘X’ to the customer ‘Y’.
A basic ERP is made up of 3 things:
1. a set of data capturing / representing facts about the company (stores
data of sale – Qty n, Product X and Customer Y)
2. a set of rules governing what to do when the facts happen (inventory
updates when sales like stock Qty reduces when sales)
3. a mechanism & medium to communicate with business users (such as an
ipad to display an invoice)
Now to explain BPM, consider an
example business process – Set of activities
A
Purchase Order from customer receives by Sales Dept; Inform store for delivery
Preparing
Delivery note from Store Dept; Inform Accts
Sales
invoice from Accounts Dept.
BPM is made up of 3 things:
1. a set of rules to govern activity in a business process (a flow sequence
or specific rules, see the above example)
2. a place to store "state" - i.e. for every item in the process,
where is currently is according to the rule described in point 1 (as per above
example to know whether you are waiting for delivery note or finished it or on
the invoice)
3.
a mechanism to
communicate state to the business user and provide instruction on what to do
next. Also a place to intercept system activity and trigger a human response.
So you have 2 options:
1. Implement
an ERP having BPR capabilities and customize to suite your business processes;
develop embedded workflow to manage your business process – change management
costly and lack of BPM other features
2. Implement
ERP and BPM – here change management faster. Also BPM can integrate with ERP
and having capabilities of DMS fully integrated with OCR and Barcode modules.
All reputed ERPs having embedded workflow, the system has the facility
to manage the business process to a certain extend. However, if you’re looking for the flexibility that comes with changing
processes, this is very expensive and is faster in BPM, that is why SAP
providing BPM adaptors to meet the customer expectations. BPM also covers processes that fall completely outside of ERP
systems such as Correspondence Management, Project Management, and Action
Tracking.
In brief, BPM plays an important role in making an ERP system agile and
adaptable to the dynamic needs of the business. Even though BPM is getting more popularity;
still it is in the 'nice-to-have' zone.
