Business Process Management (BPM) enables organizations to execute and continuously improve. (At our firm, we call it the “Business Process Analysis,” or BPA) When combined with Enterprise Resource Management (ERP), it enables an organization to execute more efficiently, better manage workflows, eliminate waste, and reduce overall costs. In fact, they go hand-in-hand with the Lean, the modern initiative aimed at weeding out all the above.
Companies implement BPM and/or Lean for just a handful of key reasons, according to research performed by the Aberdeen Group.
The key reasons for doing so are:
- Lack of innovation and outdated business processes, cited by 45% of Aberdeen’s survey of over 400 firms for its 2013 BPM Benchmark Survey.
- Improvement of quality and consistency of products and services (cited by 41%)
- Simplification and removal of risks from business processes (33%)
- Maximize return on assets (28%)
The major focus hinges on improving business processes. Simply put: Use business process management to identify and scope those changes, then use ERP to institutionalize them.
According to Aberdeen, organizations that employ both BPM and ERP “are more focused on continuous improvement.” It seems they may have gotten to that point by embracing lean initiatives, and then learn that implementing BPM with ERP is the key to fulfilling lean’s promise. Companies who do both were reported to be significantly more likely to…
- Deploy or reuse business processes across the enterprise
- Dynamically update those business processes as new best practices emerge, and
- Utilize the best practices included in their ERP solution
BPM helps design the business processes; ERP ensure they are communicated and standardized across the organization. In fact, companies that do both are twice as likely to be able to dynamically update business processes as new best practices emerge, according to Aberdeen.
In the second of this two-part post, we’ll take a quick look at the impact combining BPM and ERP on agility and efficiency. Then we’ll see where the performance improvements occurred and leave you with a few key takeaways. Stay tuned…