There is a long, and complex discussion on the BPTrends LinkedIn Discussion site that has developed over the course of the past month. I kicked it off, as I was working on an article on ERP and BPM software and wanted any insights that readers could provide. Now, as I reread the discussion, I think it shed quite a bit of light on the topic, although there was also quite a bit of repetition.
The place to begin is to ask of ERP and BPMS are two types of products seeking to offer the same value to companies. Overall, I think most agreed that this was the case, although some certainly didn’t. Without trying to summarize other people’s arguments, let me give my opinion, having read all the comments.
ERP (including CRM and other varieties of ERP) aims to provide companies with applications that can support a organizations business processes. In essence, with an ERP application in place to support an Order-To-Delivery process, the employees who receive the customer orders record the information they get into a database via software that is part of the ERP system.
In a similar way, a BPMS application can support an Order-To-Deliver process, providing an application that takes customer orders and logs them in a database, etc.
An ERP system begins with a template of the Order-To-Delivery process. A company can install and use the application right out of the box, or they can tailor it in various ways. Tailoring can be difficult, and, once tailored, any updated version of the core ERP software requires that the tailoring be done again. It is relatively hard to tailor, and harder to update an ERP application. A rule of thumb among consultants who assist companies with the installation of ERP applications is to tailor as little as possible.
This said, and ERP application from a major vendor, like SAP, comes designed with a database that can be easily extended to support multiple ERP applications. Thus, it is possible to install several different applications to support several different business processes while saving all the data in a common database. And that, in turn, assures that the ERP system can generate good reports for the organization’s executives.
A BPMS system begins with a process modeling environment and an engine and the user builds a diagram of the process, which becomes the application. Thus, using a BPMS tool I can create a diagram of the Order-To-Delivery process and then execute the process. Some BPMS tools have good support for databases and some have less. Since each BPMS application is independently created, however, a BPMS approach can not guarantee the kind of single database consistency and organization wide reports that an ERP system is designed to support.
On the other hand, a BPMS tool can be changed as quickly as one can change a diagram of the process and, if the team building the application is sensitive to the needs of the organization, the process flow can be tailored to exactly model the process currently used by the organization.
Although there is some discussion, since we are not comparing apples and oranges here, it seems that the initial analysis and installation of an application to support Order-To-Delivery would probably cost about the same amount. Obviously if a company already has several other ERP apps from the same company, initial costs would drop. Similarly, we aren’t talking about the costs of generating organization wide reports, but just the costs of preparing the application. On the other hand, a skilled BPMS team can probably get a new application up and running a bit faster than an ERP team that has to tailor an application to support the specific procedures at a given company.
Given all the considerations we have considered, and taking into account that some ERP vendors are working on retrofits to give their products more BPMS-like capabilities, there seemed to be a broad consensus that if you just wanted to do an app for a process that was of secondary importance, that ERP off the shelf would probably serve. And if you wanted to do an app for a core process that really differentiated your company, then a BPMS would provide you with a quicker response and a more flexible solution.
Beyond all this, there is still quite a bit of argument and some of it is quite complex. Readers of BPTrends might go to the BPTrends LinkedIn Discussion if they really want a more detailed discussion.
I continue to believe that, in the long run, ERP and BPMS will continue to fight for the same market and ERP will add BPMS features to become more flexible while BPS will continue to add database support and vertical industry templates to make their products more ERP-like. It will be interesting to watch as both evolve.