BPM is a Natural Extension of ERP

BPM is a Natural Extension of ERP

11-May-2012 11:28:08

Business Process Management (BPM) is the next natural step in the evolution of any business that wants to go beyond the transactional efficiencies accomplished with Enterprise Resource Planning (ERP) to achieve competitive advantage.

So says Jacques Wessels, the CEO of FlowCentric Technologies, a South Africa-based developer of smart Business Process Management (BPM) systems.

“ERP by nature is rigid and isn’t a natural fit with a company’s unique business rules and requirements. While offering some degree of customisability, at a cost, ERP is designed to provide for transactional logic. It cannot be effectively used to define processes and drive operational efficiency.

“Instead of suffering buyer’s remorse when the realisation hits that ERP can’t deliver on all of their needs, companies can leverage BPM to extend the functionality of ERP and ensure their specific operational requirements are 100% met. This will enable them to achieve agility and competitive advantage,” he says, adding that the best way for companies to get what they’d hoped and bargained for is to complement ERP with BPM from the outset.

Wessels says that in an increasingly competitive business environment, companies want to differentiate themselves with their own processes that can support their specific business strategies. These processes will change and evolve as the business moves through its lifecycle. This requires an agile approach because business strategies can change often and quickly in response to market events and requirements, particularly around compliance.

With a lot of laborious and expensive customisation, ERP could be bent to follow the contours of a business’s process requirements. However, he says ERP will never be an exact fit.

“It is also important to remember that the value chain of a business is linked through processes. For example, a sales event impacts on various departments from the warehouse, which must dispatch the goods; and the finance department that must issue an invoice; to the HR department, which must pay the sales person a commission.

“All the controls, inputs and outputs for just one event are inter-linked and can attach/connect the entire organisation. ERP cannot adequately address all these processes and control the challenges involved.”

John Olsson, Sales and Marketing Director at Ability Solutions, a FlowCentric implementation partner, which implements a range of technology solutions including ERP, agrees. He also touts BPM as a natural extension of ERP.

“ERP and financial systems can’t easily address unique process requirements or expanding upstream and downstream flows of information. ERP should rather be left to do what it does best, while BPM addresses the operational areas of the business.”

He describes BPM as the glue that integrates the various systems and sections of the business, allowing a company to cater for, and uniformly enforce, their specific business rules across the enterprise. The processes can be mapped with a link into ERP, allowing BPM to act as a friendly interface into the transactional ERP solution.

“BPM is designed for high customisability, offering a flexible, cost-efficient way for companies to widen the reach of their ERP. What this means is that companies can use BPM to turn what feels like an ill-fitting ERP solution into a holistic system that is designed to fit how the company works rather than dictating how it should run.”

Olsson believes that BPM should be integral to companies’ evaluation of ERP. However, he says that BPM is sometimes seen by ERP implementers as workflow rather than a strategic engine for embedding company rules, systems and entrenching processes. As a result, its value in extending ERP and unlocking operational efficiency is often overlooked.
“There is a misperception around BPM that stems back to the advent of the first solutions which were essentially glorified workflow toolsets. But, BPM has come a very long way since then to become a very powerful tool for optimising businesses.”

Wessels concludes: “Many organisations use BPM technology primarily for workflow and integration purposes. These organisations will derive greater benefit from using the technology/tool as they move up the BPM curve.

“And for those which haven’t yet implemented BPM, but are at a point of ERP maturity, now is the right time to consider a BPM tool.”

Topics: Insider, BPM

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