What is the Difference between BPM and ERP?

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The difference between Business Process Management (BPM) and Enterprise Resource Planning (ERP) can be quite fuzzy. I’ll start with my understanding: BPM is a practice while ERP is one of the many technologies that can support that practice. With that being said, BPM can be achieved with or without technology though having a Business Process Management System (BPMS) and/or an ERP can enhance your ability to do BPM.

ERP, on the other hand, can only be achieved with technology (and some process re-engineering, no matter how minimal). The principle behind this is simple: Integration of information across business functions. With ERP, the organization has access to a single source of data by implementing and linking modules that cater to different organizational functions. E.g HR, Procurement and so on. Some Enterprise applications may have in-built BPM functionality, but their reach does not typically extend beyond the application.

If you choose to implement BPM with technology, you’ll be looking at technologies that form the BPMS Architecture: Design & Simulation tools, Process Registry, Rules Engine, Integration Services, Data Repository, and Monitoring Services. You may deploy all or some of these components as part of your BPMS Architecture, but you’re not likely to get them all from the same vendor. The main question is, do you need them all? Most organizations already have some BPM tools in place, so a proper assessment of existing tools needs to be done to determine what extra tools you need to do BPM, if any.

Unlike the ERP Software that may come ”integrated”, the components of the BPMS Architecture are not commonly available as an integrated whole.

So, now that we have established that BPMS and ERP are two distinctive technologies, what are the differences between the two?

BPMS adopts a process-centric approach while ERP focuses on organizational functions. They both, however, have elements of process definition and integration.

BPMS at its core, focuses on optimizing the efficiency of existing business processes; monitoring process effectiveness, process modelling and simulations. It can thus, be described as a process-intelligent layer that may or may not be integrated with an organization’s ERP.

Most ERPs come with inbuilt process functionalities, which you may decide to adopt, customize or configure to suit your operations. if you’re looking for the flexibility that comes with changing processes, flexible business rules management, process modelling, designing, executing and monitoring your business processes for continuous improvement, BPMS is the way to go. You won’t be stuck with one version of the process and you can dynamically decide which process versions to map to which system users.

The Beauty of BPMS is that you can manage processes across disparate systems, applications and repositories beyond the span of your ERP system. So, if your organization cannot afford ALL the ERP modules, which are rather expensive to acquire, you could implement the BPMS to manage processes not covered by the ERP. This would still provide the benefits of integration with multiple data sources or external databases.

Though both technologies can exist independently, a combination of the two or a combination of their components, may serve you well until both technologies are available as one in the market.