According to a BPTrends analysis of dozens of companies with locations around the world, 93 percent of the organizations analyzed are investing a lot of energy in improving their processes for digital transformation. However, the perceived satisfaction with the Business Process Management software is only around 50 percent. Given that several organizations are benefiting from a synergistic approach between BPM and ERP, let’s look at what the differences between the two systems are and when it makes sense to implement both.
What is a business process management system?
BPMS is a business management tool that aims to improve specific business processes by identifying, modeling, automating, analyzing, and measuring performance.
The main advantage of BPMS is that its users have the opportunity to actively participate in business process improvement through simple and intuitive tools.
Once a process is mapped, the software highlights inefficiencies and bottlenecks; this allows management to make changes and make decisions based on evidence and hard data.
What is an ERP System?
ERP or Enterprise Resource Planning is asystem of modules designed on major business functions, such as human resources, accounting, inventory management, and more. The main feature of an ERP system is its ability to store and extract data from a common database, enabling a single source of truth. ERP systems make it possible to view the performance of the most important business functions in real time and to keep track of resources concerning different business areas. ERP systems provide up-to-date data, ensuring that all employees are aligned on the same information.
What are the differences between BPM and ERP?
It might seem that the two definitions are similar, and indeed they are. So what are the differences between the two systems? Both software use business intelligence systems, but they differ in the scope of their analyses. The main difference between BPM and ERP systems is that BPMs are much more process-focused, while ERPs tend to focus on organizational functions.
ERP Systems focus more on the various business functions and the modules that support them (accounting, human resources, inventory management, etc.). ERP systems are useful in keeping track of the data traveling through these forms. ERP allows users to keep track of everything from sales to employee payroll, all while allowing free flow of information between modules.
BPM software, on the other hand, offers a degree of workflow customization not always possible with an ERP system. For example, if a company needs to manage a specific HR workflow, the ERP vendor might provide an entire HR module. This could be quite expensive if the full functionality is not used.
ERP systems, however, allow much more data to be stored than BPM, giving users a more concrete enterprise-level view. The heart of ERP software is the central system, where thousands of data from each department are filed and stored in one location. This provides a comprehensive overview of the organization and how the various business functions are interrelated.
Does it make sense to implement both an ERP system and a BPM?
Yes, but integration is not that simple, because the risk is that the two systems will “overlap.” Typically, BPM software is integrated into a larger ERP system when the ERP cannot handle a single process with the specific focus of a BPM. The advantage of synergy between the two software is the possibility of allow the ERP to manage the most important business functions in macro mode, and leave the BPM with a greater level of detail on some key processes.
What is the best solution for your company?
If storing data in a central core is critical for your company, choose an ERP system (here we have seen the 4 most popular ERPs . If, on the other hand, you need to focus on a core process that differentiates your business, a BPM software is the right solution.
Or you can choose to implement both, to get the most out of each software.
If you feel that making this choice is more difficult than expected, seek external advice. We at F1 Consulting & Services are by your side to help you choose the best solution for your business. Contact us to schedule an appointment.