BPM Series: ERPs are not enough - Part I

A number of IT staff and end-users with whom I dealt with during my stint with Business Process Management (BPM) system vendor always asked me, "Why BPM system, when we have implemented an ERP system?" Indeed a good question. After all, ERPs are supposed to integrate & automate business processes. And now, some of the leading ERP providers have even incorporated workflow systems as part of their offerings. So, what value do BPM systems bring to the table?

BPM systems offer a vision that enables organization to manage (define, execute, control, monitor & improve) business processes independent of business systems (ERP, SCM, CRM, etc) deployed within the organizations. Through this and following blog entries, I will attempt to respond to the question of "Why BPM system, when we have implemented an ERP system?"

BPM systems orchestrate business processes

Business Process Management (BPM) systems execute business process from start to end, tying together activities within the process. Workflow server of BPM systems passes work from one performer (end-user) to another. So, the performer knows at any point in time, what work is assigned to him (or her), what priority is assigned to the work, and by when should it be accomplished. Thus, BPM systems orchestrate activities and processes. ERP systems on the other hand are transaction processing systems, which automate transactions and bring about integration of data between various functions, but fail to orchestrate business processes from start to end.

Consider for example, Sales Order Process, which may involve execution of transactions such as Generation of Order document, Generation of Shipping document and Generation Billing document in an ERP system. In practice, these three transactions may be performed by three different performers from Sales Office, Warehouse and Accounts department respectively. ERP systems obviate the need for duplicate data entry by these three performers, however, they never alert warehouse executive or accounts executive that the previous activity has been completed and it is their turn to complete the transaction. As a result performers are needed to be prompted externally (manual intervention) to accomplish these tasks/activities assigned.

BPM systems bring about business process visibility & improve operational performance

A business process executed in "non BPM" environment is neither visible to process performers nor to their supervisors. As stated above, process performers do not know when work gets assigned to them, and so also the priority and deadline associated with that work. Similarly process supervisors are unaware of the bottlenecks, delays, exceptions, etc. Process supervisors tend to be reactive and respond to delays or exceptions on receiving external stimulus, for example a call from the customer or sales executive about delays in dispatches, or a call from a vendor on delays in payments.

BPM systems take work from one performer to another. They can balance the load of work amongst a group of performers. They prompt performers once work gets assigned to them and provide them with information about the priority and timeline by which it has to be completed. They also alert performers for non-completion of tasks within specified timeframe. BPM systems can notify and escalate work to supervisors if it is not completed. Supervisors can easily track progress of every instance of the process and take corrective action or respond to exceptions proactively. Functionality such as these allows organizations to eliminate delays and inefficiencies resulting into cost savings and revenue enhancements.

ERP systems by themselves do not provide such functionality. Even those with workflows, do not offer very sophisticated process definition and process control & monitoring capabilities.