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BPM from a Business Point of View

Scott Cleveland

Is BPM the Beginning of the End of ERP?

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From Jan Baan, former head of BAAN Corporation ...

In a recent article, Jack Vaughan quoted Jan Baan as saying, 'The successor of ERP is BPM....ERP is becoming the model of complexity. It has become too complicated.' Baan is the CEO of Cordys and former head of Baan Corporation, an ERP vendor. BPM [business process management] is the leading edge of a major change in enterprise systems.

Much has changed since the heyday of ERP. The internet and internet technology has changed communications and integration. Businesses are on-line and accessible from anywhere, any time. The marketplace has become global for all enterprises, not just large companies.

We are in a state of transition to a new business paradigm. The full transformation of enterprise systems and the enterprise will involve BPM, loose coupling of business capabilities will provide an enterprise architecture model from a business perspective.

My Thoughts...

BPM software and ERP software attack very different problems.

Enterprise Resource Planning [ERP] software provides functionality to plan and manage resources. The most key resource being 'cash'. In most companies, the users of ERP software log in and perform their tasks. No one will know that tasks have been completed unless they log in to see if something has changed. If you want to let someone know that you have performed a task, you must contact them [email, phone, etc] to let them know.

Business Process Management [BPM] software provides functionality to manage business processes. A person is charged with performing a task. Once they have completed that task, the person [or persons] performing following tasks are notified automatically. Most BPM platforms provide functionality to automate steps/activities. Programs can be triggered to perform mundane tasks that computers are well equipped to complete.

It seems obvious that these software packages will enhance, not replace, each other. Further evidence shows large ERP vendors are acquiring BPM vendors. They can see the synergy as well.

Looking into my crystal ball, I believe that the main ERP players will be acquiring or creating BPM functionality to enhance their ERP offerings.

Your Thoughts...

What does your crystal ball say?

Keeping it Real!

7 Comments

Without a doubt BPM is becoming a more important part of ERP. However, it will never replace ERP. Think of it this way. BPM is all about being able to automate any type of process. ERP is a very specific set of processes for Enterprise Resource Planning (just like CRM is a specific process for Sales Management). The operative word here is "specific." Anytime you can build a very specific piece of software for a specific function (or better yet a specific vertical), that piece of software will always trump a more generalized piece of software for a whole host or reasons. That has always been the Achilles heal of BPM and will continue to be so for a long time.

Brian Reale
http://blog.processmaker.com

BPMS tools and ERPs both manage business processes, but from different perspectives. ERPs are generally transactional systems extended from financial systems to provide best practice processes that are "hard-coded" into ERP modules.

BPMS tools "soft-code" processes to the requirements of the users/business/organisation and are more flexible in their approach. It doesn't have be based on any best practices.

BPMS may not replace ERP but it extends the reach and usefulness of ERP systems is used correctly. Its integration capabilities brings ERP information to other areas of business that are not part of the conventional ERP domain. It also brings process control to many of the processes that "feed" the ERP, improving the quality of information into the ERP. It can be used to simplify ERP functions in areas where the operators don't have PhDs in IT (like some ERP screens require you to have).

BPM is complimentary to ERP and may move into the ERP domain but is not likely t become the new development platform for ERP solutions.

I agree with above statements. I would also add that ERP creates competitive convergence. Your process is very similar to your competitors. Companies differentiate themselves by the way they operate their processes. This is where BPM can be leveraged to create competitive advantage. While the same can be achieved using custom coding but generally this is found to be a high TCO from time and money. BPM provides a more flexible approach. One other reason to look at BPM is that ERP applications rarely manage the end to end process. From sales / customer interaction point all the way through to billing. BPM is a way to to get end to end SLA management and process visibility. There is a strong synergy between ERP and BPM. Question is who will SAP buy next?

To compare BPM with ERP is the wrong approach.
I have seen many models of Business Processes and the issue is that BPM often happens at a very high abstraction level and doesn't take operational details into consideration.

A Business Process Model for example describes the customer order process like
- Enter the customer order
- Check Available Inventory
- Price the Order
- Perform credit check for the customer
- Send order confirmation
- Prepare order for shipment
- Ship Order
- Create and Send Invoice

While on a process level this makes sense, the devil is in the details.
BPM is not looking at the details, it can't because otherwise it would not be a Business Process Model any more.

Just imagine the many different ways how an order can be priced or how a credit check can be performed?

This is where ERP with its pre-configured functionalities adds value.
I agree that ERP has become incredible complex but the reason for that is that ERP suppliers develop software for many industries and at the ERP level, businesses operate in a very similar way.

Every manufacturing company stores inventory.
Now compare a company that produces oil rigg equipment with a company that produces dairy products for consumers and you start to understand that inventory in one company doesn't equal inventory in another company.

I see the value of BPM much more in the area of mirroring the business process back to the end user and by doing so, question the existence (and usefulness) of some of the legacy processes that do not add value.
But when it comes to execution, ERP will always have it's place.

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What is end user perspective of a BPMS/BPM system?

Now days big enterprises seems to find an approach to adopt BPM and BPMS in these days. I have some questions regarding end users (Not BAs or Process developers) perspective of a BPM system.

-In a large enterprise by using BPM system how will end users interact with their existing legacy, ERP and custom developed applications. Will they need to interact with multiple user interfaces as they progress through process in a BPM system.
-From an End user perspective can BPM system be considered as a another web based system that provides end users with a centralized system to perform, keep track and collaborate end-to-end business process. This business process may involve them to manually logging in other applications or by automated integration (Either on user interface level or using web services)

Can we share some views on the above questions. Thanks for responses.

Really you have done great job,There are may person searching about that now they will find enough resources by your post,

BPM helps in extracting more value out of the existing systems. It provides flexibility and visibility of the overall corporation's performance. In my previous company, I'm lucky to be participated during setup phase. It is not easy to launch the system but the value is huge.

Scott Cleveland blogs about BPM from a business point of view.

Scott Cleveland

Scott Cleveland is a technical, innovative and creative marketing manager with more than 25 years of experience in marketing, marketing management, sales, sales management and business process consulting aimed at high-tech companies. His areas of expertise include: product marketing, solutions marketing, solution selling, sales maangement, business process management, business process improvement and process optimization. Reach him at RScottCleveland[at]gmail.com.

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