How BPMS makes ERP more flexible

Enterprise Resource Planning (ERP) software has become a critical part of an organization’s application portfolio handling important data about company financials, customers, and employees, and helping execute key processes such as procure to pay, and order to cash. It is not surprising that more than 75% of all Fortune 500 companies use ERP software offered by vendors such as SAP and Oracle.

However, ERP software has been unable to shake the perception of being inflexible. There is legitimacy in this perception. An organization’s business processes often have to be redefined according to the best practices and workings of the ERP software. Extensive customization of ERP software is typically reserved for the largest customers, and usually adds a zero or two at the end of the invoice amount billed to the customer.

This lack of flexibility is not a problem when dealing with standard processes such as general ledger accounting, and financial reporting that are handled in much the same manner across all organizations and companies. In fact, organizations would want completely dependable and standard results for such standard processes.

On the other hand, organizations also have the need to build and manage differentiated and innovative processes that help it stand out in the market. These processes have to change fast depending on new customers, product regulations, and business relationships. Examples of differentiated processes include customer service, sales, and product introduction that are handled differently from one organization to the other. Examples of innovative processes include research and development, and marketing, which demand the greatest degree of experimentation and therefore the most amount of system flexibility to handle these processes.

Standardization vs. Differentiation - Extending value of ERP
Systems of Record, Differentiation, and Innovation

Business Process Management Systems (BPMS) are flexible systems in which differentiated and innovative processes can be configured and managed. These BPM systems can leverage existing financial data, customer information, employee information, and process logic that already reside in the classical ERP system of record. Technically, there are various ways in which BPMS can integrate with traditional ERP systems that include web-services and Java based connectors.

BPMS systems can add flexibility to the traditional ERP systems of record, and help your organization build and manage differentiated and innovative processes that help it stand out in the market.

*Sources and References:

PEX Webinar: Extending the Value of your ERP system