What is the difference between ERP and BPMS Tools? How do I choose between the two?
What is the difference between ERP and BPMS Tools? On which elements can we rely to decide if we used an ERP (Like Odoo) or a BPMS tool (e.g. Camunda, BONITA) to develop an application?
Senior Project Management Consultant at a tech services company with 1,001-5,000 employees
Consultant
Top 5
Jul 30, 2020
This is great question, and one that is rarely asked and even more rarely understood. ERP and BPM are two very different things, although there are some common elements.
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.
For Business Process Management (BPM) software, it’s helpful to understand BPM as a discipline. 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.
Many companies and practitioners suggest that business digital transformation can be done by taking an ERP and manipulating its applications with custom code to match the business processes, or force the business to change processes to fit the software. That can be as big a challenge, or even bigger, than designing a system from the ground up. ERP are very good at managing and data views. BPM are good at process definition and application development (if coupled with an application development tool like Bizagi, Appian, Bonita, et al), but need additional tools (BI, for instance) to provide detailed insight.
Long answer to say they are both different tools in your digital transformation process, and can be complementary to one another.
Search for a product comparison in Business Process Management (BPM)
ERP offers a standard commercial application in different areas, such as financial, commercial, production, inventory management, etc., depending on the ERP modules and the company's needs.
BPMS offers a development platform more oriented to business flows, being certain that there are some BPMS in the market that allow the development of business modules that ERP also offers.
The ideal solution should combine the two, use BPMS as a management layer for business flows and, in each workflow activity, invoke the module or functionality that ERP can provide.
The advantage of having a process management layer independent of the business functionalities is the dynamics and easier adaptation to the changes required by the business, while the business flows incorporated in the ERP itself make these adaptations much heavier, generally hard-coded, in addition to additional costs whenever a new version is implemented.
From a business perspective, a combination of two solutions allows to create the foundations so that the company remains more easily competitive, through process management, more efficient and more visionary, while the implementation of just an ERP is a kind of marriage for life, creating many difficulties of divorce even when the marriage no longer works.
Business Architect at a tech services company with 1,001-5,000 employees
User
Jul 30, 2020
I agree with Art's answer. ERP systems are more about managing and tying-together the data, as opposed to executing a process per se. BPM (now often called Digital Process Automation--DPA--just to add to the confusion) is all about defining and executing the process. If you have a help desk process or product fulfillment request, you wouldn't do those in an ERP. You'd do those in a BPM/DPA system. The data from those systems may well get sent to the ERP for tracking and analysis. I hope this helps.
So ERP is transactional software. A Purchase Order(PO) is issued, a widget is sold on a Sales Order(SO), incoming raw materials are received - each transaction is recorded at the point of activity, purchasing issues the PO, Sales enters the SO, the receiving dock scans in shipments and indicates where' they're put away.
ERP follows the business process but does not normally dictate it.
BPM is a tool to design, streamline, measure, and create business processes. You might use BPM software to design how you wanted your business processes to work and how the ERP would interact at key areas to capture the actual flow.
Oddo is an open source ERP, which lets you construct your own ERP. Most companies do cost analysis to determine how much ERP will save in efficiencies or enhance in revenues, and given the impact can be significant, building out an Oddo instance for a year or two is huge money wasted down the drain. Of course if you have no idea how much ERP can benefit your organization, no one really notices hidden costs piling up. Plus when you finish an Oddo implementation, you have a really nice v1.0 design come to life, while everyone else is using v18 with 20 years of live experience, input from hundreds of customers, and hundreds of thousands of man-days development behind the product.
You might want to look at naologic - they're doing an Oddo sized ERP that I think is a big improvement - but I've not put any clients on it yet. More tips on selecting ERP at ProfitFromERP.com if you are interested.
ERP systems streamline business operations by integrating processes and data into a unified platform, enhancing efficiency and decision-making capabilities. They support a range of functions such as finance, HR, supply chain, and production.ERP helps organizations manage core business activities, providing real-time visibility across departments. This integration leads to improved productivity while reducing costs. They are vital in aligning everyday operations with strategic objectives,...
This is great question, and one that is rarely asked and even more rarely understood. ERP and BPM are two very different things, although there are some common elements.
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.
For Business Process Management (BPM) software, it’s helpful to understand BPM as a discipline. 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.
Many companies and practitioners suggest that business digital transformation can be done by taking an ERP and manipulating its applications with custom code to match the business processes, or force the business to change processes to fit the software. That can be as big a challenge, or even bigger, than designing a system from the ground up. ERP are very good at managing and data views. BPM are good at process definition and application development (if coupled with an application development tool like Bizagi, Appian, Bonita, et al), but need additional tools (BI, for instance) to provide detailed insight.
Long answer to say they are both different tools in your digital transformation process, and can be complementary to one another.
In my opinion, that is the main difference.
ERP offers a standard commercial application in different areas, such as financial, commercial, production, inventory management, etc., depending on the ERP modules and the company's needs.
BPMS offers a development platform more oriented to business flows, being certain that there are some BPMS in the market that allow the development of business modules that ERP also offers.
The ideal solution should combine the two, use BPMS as a management layer for business flows and, in each workflow activity, invoke the module or functionality that ERP can provide.
The advantage of having a process management layer independent of the business functionalities is the dynamics and easier adaptation to the changes required by the business, while the business flows incorporated in the ERP itself make these adaptations much heavier, generally hard-coded, in addition to additional costs whenever a new version is implemented.
From a business perspective, a combination of two solutions allows to create the foundations so that the company remains more easily competitive, through process management, more efficient and more visionary, while the implementation of just an ERP is a kind of marriage for life, creating many difficulties of divorce even when the marriage no longer works.
I agree with Art's answer. ERP systems are more about managing and tying-together the data, as opposed to executing a process per se. BPM (now often called Digital Process Automation--DPA--just to add to the confusion) is all about defining and executing the process. If you have a help desk process or product fulfillment request, you wouldn't do those in an ERP. You'd do those in a BPM/DPA system. The data from those systems may well get sent to the ERP for tracking and analysis. I hope this helps.
So ERP is transactional software. A Purchase Order(PO) is issued, a widget is sold on a Sales Order(SO), incoming raw materials are received - each transaction is recorded at the point of activity, purchasing issues the PO, Sales enters the SO, the receiving dock scans in shipments and indicates where' they're put away.
ERP follows the business process but does not normally dictate it.
BPM is a tool to design, streamline, measure, and create business processes. You might use BPM software to design how you wanted your business processes to work and how the ERP would interact at key areas to capture the actual flow.
Oddo is an open source ERP, which lets you construct your own ERP. Most companies do cost analysis to determine how much ERP will save in efficiencies or enhance in revenues, and given the impact can be significant, building out an Oddo instance for a year or two is huge money wasted down the drain. Of course if you have no idea how much ERP can benefit your organization, no one really notices hidden costs piling up. Plus when you finish an Oddo implementation, you have a really nice v1.0 design come to life, while everyone else is using v18 with 20 years of live experience, input from hundreds of customers, and hundreds of thousands of man-days development behind the product.
You might want to look at naologic - they're doing an Oddo sized ERP that I think is a big improvement - but I've not put any clients on it yet. More tips on selecting ERP at ProfitFromERP.com if you are interested.