Today all businesses rely heavily on ERP software for important business functions such as production planning, operations management, accounting and finance, sales, and service support. Given external challenges like competition and economic uncertainty, businesses are under pressure to improve their business processes. In such a scenario, integrating ERP with a business process management (BPM) solution can help achieve better productivity and efficiency.
Although BPM-ERP integration can be capital-intensive, its benefits are significant. In our experience, BPM-ERP integration can help shrink process cycles from days to hours. BPM-ERP integration also facilitates easy tracking and adaption to regulatory requirements and market conditions. The following tips will help you create an effective BPM-ERP integration plan.
1. Do it in phases
The high cost of licensing, implementation, and project management, makes BPM-ERP integration expensive. You also do not want the performance of your existing systems deteriorating when performing a BPM-ERP integration. It's a good idea to start with a pilot project, and once you are satisfied with results, to begin the BPM-ERP integration in phases. Choose simple business processes for the first phase. The complex ones can be attended to later, one at a time.
After the BPM-ERP integration, you can use a set of simple rules (logics) to orchestrate your business processes. In a web-store scenario, every order can be passed through a CRM, order management, payment, and delivery system. You can lay down business rules for the order systems: the credits to be given and the payment terms. You can lay down business rules for the receivables/shipping process later.
2. Set specific goals and objectives
Before the BPM-ERP integration, you must ask yourself, why do we need BPM-ERP integration, and what do we want to achieve for our enterprise? Some organizations choose BPM-ERP integration to improve business processes, others to be able to respond quickly to changing market conditions.
In the investment banking industry, companies invest in diverse assets such as equity, mutual funds, commodities, etc., based on their market strategy. For such companies, BPM-ERP integration can provide a better understanding of strategy, automated processes, and improved decision making. It is important to tie BPM-ERP integration to a specific business goal.
3. Obtain organization-wide buy-in
BPM-ERP integration spans business functions such as sales, manufacturing, finance, marketing, etc. It is important to have the support not only of your sponsors or stakeholders, but also of the members of all the business-streams impacted by it.
Ensure that those members have good exposure to the BPM-ERP integration process. If there is a glitch in the system and the administrator is missing, others in the organization should be able to take over control. Administrators with vital process knowledge may retire or leave the organization. In such situations, the company should be able to execute the processes under a different administrator.
In addition, create a governance framework and body. The body should comprise of members from all the departments involved in BPM-ERP integration. Ensure that the BPM system has rules for the flow of each process. Any changes to the process should be first vetted by the governance body.
4. Draft a BPM methodology
- A BPM methodology or set of milestones should be prepared before the BPM-ERP integration. A high-level methodology would have these components: Enhancing knowledge of all business processes
- Creating a model for these processes with business rules/principles
- Planning the process orchestration using a flow chart Carefully executing the process from start to finish
- Implementing a mechanism to measure key components -- service level agreements (SLAs) can be used to check whether processes have improved or deteriorated
- Inviting feedback and optimizing the process design over time
About the Author: Chetan Manjarekar is vice president and business unit head of the strategic offerings group (SOG) at Syntel, which focuses on BI/DW, big data, analytics, mobility, BPM, enterprise integration services, ERP, and enterprise architecture solutions.
Read his full profile here.
(As told to Mitchelle R Jansen)
This was first published in October 2012