According to a 2018 BPTrends Report, 93 percent of companies are involved in multiple efforts to improve their processes. However, only 50 percent of those using a BPM software reported satisfaction with the tool. It’s possible that the other half of BPM users would be more satisfied with a different way of managing their processes, like with an ERP software. But first we need to understand the full breakdown of BPM vs ERP software.
Even if you don’t know all the differences between ERP and BPM, you probably know they share a common goal to enhance productivity and increase profits. Despite this commonality, they aren’t interchangeable systems. It’s vital that you choose the right software for your organization according to your specific business goals and functional needs. If you don’t choose correctly, you could end up wasting time and money. Software selection can be complex and time-consuming, but if done correctly, has many positive benefits.
While they may seem similar on the surface, a BPM ERP comparison will demonstrate they do have key differences. It’s important to understand the role each one plays so you can decide what is best for your business.
Enterprise Resource Planning
Enterprise resource planning (ERP) is a type of software that provides users access to a suite of applications. These modules are built with major business functions in mind, such as human resources, accounting, inventory management and others. The core feature of an ERP system is its ability to store and pull data from a common database, allowing for a single source of truth.
This enables all your employees to work with the same set of data. No longer do companies have to stand by while different departments work with outdated stock levels or ledgers. ERP systems provide up-to-the-minute data, ensuring all your employees stay on the same page. A common database also eliminates doubt, as your employees are certain everyone is working with the same information. This leads to more confident business decisions.
ERP systems provide interfaces through which users can access centralized information, providing convenience and improved efficiency. With ERP, users don’t have to re-enter the same data into multiple systems nor do they have to look far for information needed across departments. ERP modules freely share data with one another to provide a comprehensive picture of your company. Integration of applications is an integral piece of ERP structures.
Business Process Management
To better understand BPM software, it’s helpful to understand BPM as a discipline. Business process management (BPM) is comprised of the strategies and techniques used to understand, improve and automate business processes. BPM sees processes as resources in themselves and seeks to improve them.
Enterprise BPM software, therefore, works to organize, manage and automate an organization’s business processes. This system achieves this by providing users with a process modelling tool to design and edit workflows. Process modelling allows users to include process descriptions to inform the audience with exactly what happens during the process.
The process should also include instructions on how exactly the task is to be performed. These instructions might be made up of strict rules or flexible guidelines. Process modelling also includes an explanation of the process to justify its existence in your business. The process needs to include a justification for why it needs to be fulfilled in one way and not another as well.
ERP vs BPM
ERP is about modules and functions
If you’re thinking the definition of BPM still sounds a lot like ERP, you’re not wrong. From a high-level overview, they sound very similar. However, there are some key differences. ERP business process management systems are more focused on the various business functions and the modules that support them. These include accounting, HR, inventory management, etc. ERP is also useful in tracking data across these modules. ERP allows users to track everything from sales to employee wages, all while allowing free flow of information between modules.
See our ERP Software Buyer’s Guide
BPM offers workflow customization
But let’s say you need software to manage one specific HR workflow. An ERP vendor can only provide the entire HR module to you, which can be costly if you’re not benefiting from all the features available. A BPM system allows your business to manage that workflow with a level of customization simply not available from ERP systems. ERP process management exists, but ERPs don’t always provide the same granular data that a BPM system would. Both types of software utilize business intelligence tools, but differ in the scope of their analyses.
Both provide business intelligence
Both systems provide analytics using your KPIs and custom reports. However, BPM can track the efficacy of specific processes. BPM’s business intelligence (BI) tools provide insight into process execution times, process statuses, the number of closed process and the number of those open.
ERP provides data storage and visibility
Now let’s talk a little more about ERP. Simply put, ERP is a software suite that stores data to a central server. Therefore, different departments can input data, and it all gets stored in one location. This gives users a comprehensive overview of your company and how its functions are interrelated. ERP gives users a company-wide view that BPM cannot offer. It also stores much more data, allowing for extensive analysis across all business functions showing how each is interrelated. To understand more, review this ERP requirements checklist.
Can You Use Them Together?
Much of the confusion surrounding BPM and ERP stems from the fact that when used separately, they are doing a very similar, if not the same, job in some instances. Interestingly, the differences between the two systems is seen best when used together. Typically, BPM is integrated into a larger ERP system when the ERP isn’t managing a process as well as a BPM would. This can lead to numerous inefficiencies in your business and tedious workarounds as you try to fix them.
A BPM system highlights important processes in your business that an ERP would otherwise pass over. This heightened level of detail strengthens the process managed by the BPM, allowing the larger ERP to facilitate more general business functions.
If integrated properly, the two can actually compliment each other by filling in the gaps. Running them together can give you the best of both worlds. You can have automated process management that monitors the use of resources and assigns tasks. At the same time, you will still be able to store all of your data in a central database.
Which is Right For Your Business?
If you’re looking for a solution that can manage your business functions across your company with a heavy focus on storing data in a common database, ERP is the system for you. If you’re really more focused on specific processes and optimizing them to their full potential, BPM software is a better fit. But remember, they can be used together to make each other stronger. So there might not be a need to pick one or the other if using both is the best choice for your organization.
Given this ERP BPM comparison, which software system do you plan on implementing? Let us know by leaving a comment below!