Add 2 parts BPM + 1 part Workflow. Add ERP. Mix well. Season to taste.
Let’s face it, “ERP is aimed at providing an integrated solution to all business areas of a particular enterprise.” ERP is and will always be the cornerstone of any self-respecting business. We’ve been living with ERP for nearly as long as we’ve been enjoying The Beatles. ERP began bubbling in the 60s, but the name was only coined in the industry in the 90s.
Still, there are software vendors who’ve been churning out ERP systems for decades and they’re chugging along. Because of them, we’ve enjoyed the benefits of a single software system that an entire company can access and work with – and all before lunch.
Now picture this: ALL the data for finance, sales, accounting, human resources and inventory is managed in one central repository and on one single platform and each business unit within the organization accesses only the subset of data they need. It’s ERP at its best.
So what makes ERP tick? Workflow.
Workflow as a concept is not new. Even before the computer, there were procedures for handling operations within a corporate structure. Take the standard purchase order, for example. An employee notifies their manager that they require a particular item; the manager puts in a requisition, which, depending on their level of authority, may need to be bumped further up the chain until it’s authorized; it’s then handed over to the purchasing coordinator and finally, purchased. That’s workflow – plain and simple.
The workflow can be rather straightforward or very complex. It’s a business process made up of several sequential tasks performed in a certain order or following a set of rules designed to achieve a goal. The better known processes for which workflows are commonplace, include order processing and fulfillment, sales cycle and campaign management, performance reviews, medical/insurance claims processing, expense reporting, warranty management, invoice processing and more.
The ERP workflow can be part of the larger concept of Business Process Management (BPM), which is a more holistic approach to business processes. Companies that use BPM are trying to optimize their business processes, to be more efficient, more effective and to improve their tracking and control.
It’s BPM and workflow implementation that force companies to evaluate their business processes (or lack thereof). Questions like “What is the flow of a particular task, what possible scenarios exist, what rules need to be applied at each stage of the process, who is involved at each stage and what level of authority should they be granted?” Creating a detailed blueprint of business processes, streamlining and regulating the workflow, leads to greater control.
And we want greater control. We want to respond faster to any potential problem and we want increased efficiency, accountability and transparency across the organization.
Today, BPM and workflow functionality are an integral part of ERP solutions. It makes sense to implement such process maps and controls early in the game to maximize the benefits of the ERP system. Some ERP vendors offer built-in workflow functionalities, while others offer the means for third-party integration. Built-in workflows are known to be more efficient and reliable. While third-party solutions can do the trick, it’s important that ERP and BPM/workflow groups understand the technology and processes they’re implementing. Crossed wires, so to speak, are not the basis for any long term relationship between BPM and ERP.
Workflows involve people, not machines. The people involved at all levels of the process should also be involved in the initial mapping out of the processes before they’re implemented. While mapping out the process, you may discover new and better ways to perform tasks or gain insights. Workflow and BPM systems breathe, giving life, as it were, to ERP. Be it the defining and modeling phase, or collaboration during the definition process to improve system performance as a whole or for individual employees, workflow and BPM foster a sense of “ownership” in each employee. This makes everyone responsible for their part in the process.
Workflow and BPM systems lay the foundation for ERP systems. They control the flow of information between individuals or departments and direct it to the next processing stage according to an established workflow map. A good system should enable managers to monitor the progress of any process in the workflow, handle and escalate exceptions and generate reports that can be used to improve performance.
The “perfect recipe” for ERP? BPM and its trusted companion, workflow. Make these your must-haves when shopping around for your next ERP solution.