BPM on ERP (Part 1 of 2)

The way organizations go about their business has changed dramatically over the last decade and the pace of change is ever increasing with new technology, compliance regulations, and competitive pressures. How effectively organizations go about their business largely depends on how effectively they manage their business processes. As a result, changing the way they conduct their business often requires changing their key business processes.

From a different perspective, unless there is a complete visibility into the way business is carried out, it is not possible to identify potential improvement areas, and hence it is becoming absolutely essential to automate business processes and make them explicit for real-time visibility.

The core values offered by Business Process Management Systems (BPMS) platforms are:

• Automation of business processes to deliver efficiency
• Making processes explicit in order provide real-time visibility
• Ability to change processes with agility

The ERP adoption through 1990’s gave organization means to optimize their operations by automating several functions and transactions across their enterprise. These transactions sometimes may be a small part of the end to end process an organization executes, and the end to end processes may span beyond ERP. It is difficult and often not possible to capture entire business processes by customizing ERP. As a result, there are several processes that remain inefficient, manual, and paper based. In such cases, achieving process visibility and agility across the organization becomes a daunting task. Organization can benefit immensely by automating and managing these processes outside ERP (O-ERP) using BPMS.

If organizations uses ERP to automate end to end processes, it would mean a lot of customization on top ERP and would make them even more difficult to change.

There is clear value of using BPM over ERP:

• BPMS can overcome Process Limitations of ERP.
• BPMS allows businesses to define and execute processes the way they want rather than fitting business requirements within scope of ERP
• Managers who are responsible for specific process(es) want to have end to end visibility into process and in meaningful way. BPMS can provide such end to end visibility.
• ERP customization is difficult to change. Processes defined in BPMS are built for change achieving higher agility.

Due to special knowledge required, end-users find it difficult to use ERP interfaces to perform their day to day tasks. This means that in lot of cases several stake-holders left out of overall solution and as a result solution doesn’t foster collaboration and effective communication to move business at pace which current environment demands.

End to End process generally span across various people, systems within organization as well as involve people from outsides, such as customers, partners, it is difficult to extend ERP solutions across such wide spectrum and a result it remains silo-ed solution. Process solutions defined with BPMS can span end to end process covering all stake holders.

We have come across several customers who have understood limitations of ERP and benefits that BPMS layer can provide on top of ERP. Though various engagements, we have encountered 3 distinct use cases of BPM on ERP. In next part will discuss these use cases.