I have gone through lot of articles and blogs and do some study what would be the Middle East market looking. What I discovered is that the MEA Region is about 3 years behind the global market in its access to and evaluation of BPM and ERP solutions.
And many people have asked me about the differences between ERP and BPM.
Questions include:
- How does BPM compare with ERP?
- Does BPM compete with ERP, does it replace ERP, or can it co-exist with ERP?
- What is the value of BPM to me?
- Which should I do first?
ERP: In simplified terms, I see ERP as a way to integrate the data layer of different processes (e.g. AP/AR, Payroll, Order Entry) within larger processes (e.g., Financials, HR, SCM). Although workflow is an embedded part of any ERP system, it is not intended to support enterprise processes. The workflow itself is functionally-driven (e.g., materials management) vs process-driven, where the process can potentially span many different functions (e.g., requisitioning, recruiting). The value ERP provides is an integrated system and single view into customer data. The data is updated on demand. Customers expect ERP to support their processes, but often they have to change their process to match ERP best practices. As a result, ERP software and implementation costs are significant.
BPM : In contrast, BPM enables users to create business applications incorporating different people, data and documents, which in turn span multiple divisions, systems and/or data sources. Process function is almost irrelevant. In a structured BPM scenario, workflow activities derive from specific rules (i.e., roles, responsibilities, policies, procedures, deadlines, escalations). In a dynamic BPM scenario, users completely control routing in run-time. The value BPM provides is a platform to create multiple applications that improve productivity (effectiveness, efficiency), greater business agility (traceability, innovation, optimization), and ensured compliance (auditability). Furthermore, process definition components are reusable and changeable.
BPM might compete with and/or replace ERP on smaller scale projects. BPM absolutely compliments ERP by creating a "single view" into processes spanning multiple groups/systems (e.g., customer on-boarding, purchase requests). BPM also covers processes that fall completely outside of ERP systems such as Correspondence Management, Project Management, and Action Tracking.
In summary:
- ERP provides very good embedded workflow, but poor enterprise workflow. BPM supports both functional and enterprise workflow scenarios.
- BPM is far more agile than ERP systems, where BPM requires on average 3 months to implement versus 20 months for ERP. Change management is also faster with BPM.
- ERP often needs BPM to help realize its full value.
- If BPM isn't for use with ERP, why do so many vendors provide adapters?
So again you think, BPM or ERP or both? I will come to you with more details…
