The whispers are getting louder and the proclamations more brazen…
BPMS vendors believe their packages can replace SAP and other ERP systems.
Are they right? Lets find out.
BPMS vs. ERP: Motivation behind the Thought
First, let’s take a brief look at the motivation behind this movement.
Industry analysts in aggregate peg annual BPMS market revenue at somewhere around $3B here in 2012, whereas they estimate that annual ERP market revenue will be roughly $45B this year. Clearly, the ERP market is much larger, so picking a fight with the ERP vendors makes sense; if BPMS vendors can successfully gain even 5% of that market, it would effectively double the size of their market. OK, so the move makes sense for the BPMS vendors, but does it make sense for customers?
In a word, it comes down to customization. Let me explain…
Though their strengths are manifold, we can sum up the value of pre-packaged ERP systems by saying that they effectively provide industry-proven, pre-built code that can help organizations run their businesses more effectively and without having to hire armies of developers. Companies who are willing to adapt their business processes to align with their ERP systems can save either millions or billions of dollars (depending on their size), making their owners/shareholders very happy. An excellent example here is the success that Disney had with its global SAP rollout, which was executed during the early portion of the last decade; they changed their processes to align with SAP, and it worked very well. It’s truly one of SAP’s huge success stories.
What happens, though, if a business either can’t adjust its business processes to align with those in their ERP system or simply doesn’t want to do so? Unfortunately, ERP systems aren’t designed to be customized.
Yes, you can write code on top of just about any modern ERP system, and by doing so you can either replace or augment the built-in business processes.
However, you can’t change those processes, leading to frustration, wasted expenditure, and timelines that aren’t met. This is where BPMS platforms shine and where their claim that they can replace ERP systems is absolutely on point; if you want to implement a system that will model *your* processes, today’s BPMS platforms can do that for you very effectively.
How? Regardless of whether you’re talking about Pega, Appian, IBM, or many of the other leading BPMS platforms, all can allow for business process customization, the rapid development of complex user interfaces, efficient human task management, and integration of simple reporting capabilities. By affording their customers those capabilities, they are giving them the power and ability to effectively customize their platform to align with their business processes, the exact opposite of what Disney did with SAP. On the flip side, you do have to bear the expense of modelling and building your processes, so there is a trade off.
BPMS vs. ERP: The verdict
The verdict? If you’re willing to align your business with the pre-built processes that are offered with today’s ERP systems, you will save money in the long-run by buying one of those systems, and BPMS vendors simply cannot effectively compete with ERP’s under those conditions. On the contrary, if you aren’t willing to align your business with your ERP and want to be able to align your tool with your business processes instead, you will save money and position your business for more success by buying a leading BPMS platform in lieu of a pre-built ERP system.
Your business processes can offer competitive differentiation for your organization. Automate those processes using a platform that offers you the ability to customize them and can help you implement continuous improvement as well. For back-office, blocking and tackling processes, consider aligning those processes with those that are offered within ERP systems or other packaged applications. In the long run, those strategies will save you money and allow you the freedom to adjust your processes as required for competitive differentiation.