BPM

Group Assignment #07.

ON
Study of Business
Process Management Suites.
SUBMITTED TO

SYMBIOSIS INTERNATIONAL UNIVERSITY

MASTERS OF BUSINESS ADMINISTRATION (MBA - IT)
UNDER THE GUIDANCE OF
Prof. ASHOK KOTWAL
SUBMITTED BY
ARNIMA JAIN (43)
SUBHADEEP SINHA (91)
SUDHANSHU DESHMUKH (08)
RIDDHI JESALPURA (68)
NITESH UPADHAYAY (111)
(BATCH :2015-17)

Q) Indicate what requirements are critical for a BPMS to be in the Magic

Quadrant and give your critique of the parameters used for selection.

1.What is the Difference between BPM and ERP?

The difference between Business Process Management (BPM) and
Enterprise Resource Planning (ERP) can be quite fuzzy. Ill start with my
understanding: BPM is a practice while ERP is one of the many
technologies that can support that practice. With that being said, BPM
can be achieved with or without technology though having a Business
Process Management System (BPMS) and/or an ERP can enhance your
ability to do BPM.
ERP, on the other hand, can only be achieved with technology (and some
process re-engineering, no matter how minimal). The principle behind
this is simple: Integration of information across business functions. With
ERP, the organization has access to a single source of data by
implementing and linking modules that cater to different organizational
functions. E.g HR, Procurement and so on. Some Enterprise applications
may have in-built BPM functionality, but their reach does not typically
extend beyond the application.
If you choose to implement BPM with technology, youll be looking at
technologies that form the BPMS Architecture: Design & Simulation
tools, Process Registry, Rules Engine, Integration Services, Data

Repository, and Monitoring Services. You may deploy all or some of these
components as part of your BPMS Architecture, but youre not likely to
get them all from the same vendor. The main question is, do you need
them all? Most organizations already have some BPM tools in place, so a
proper assessment of existing tools needs to be done to determine what
extra tools you need to do BPM, if any.
Unlike the ERP Software that may come integrated, the components of
the BPMS Architecture are not commonly available as an integrated
whole.
So, now that we have established that BPMS and ERP are two distinctive
technologies, what are the differences between the two?
BPMS adopts a process-centric approach while ERP focuses on
organizational functions. They both, however, have elements of process
definition and integration.
BPMS at its core, focuses on optimizing the efficiency of existing
business processes; monitoring process effectiveness, process modelling
and simulations. It can thus, be described as a process-intelligent layer
that may or may not be integrated with an organizations ERP.
Most ERPs come with inbuilt process functionalities, which you may
decide to adopt, customize or configure to suit your operations. if youre
looking for the flexibility that comes with changing processes, flexible
business rules management, process modelling, designing, executing and
monitoring your business processes for continuous improvement, BPMS
is the way to go. You wont be stuck with one version of the process and
you can dynamically decide which process versions to map to which
system users.
The Beauty of BPMS is that you can manage processes across disparate
systems, applications and repositories beyond the span of your ERP
system. So, if your organization cannot afford ALL the ERP modules,
which are rather expensive to acquire, you could implement the BPMS to
manage processes not covered by the ERP. This would still provide the
benefits of integration with multiple data sources or external databases.
Though both technologies can exist independently, a combination of the
two or a combination of their components, may serve you well until both
technologies are available as one in the market

BPR, BPM, and ERP Revisited

Allow me to establish some basic definitions for our discussion:

Business Process Management (BPM) consists of methods,

techniques
and
tools
to
design,
deploy,
control,
and
analyze operational
business
processes involving
humans,
organizations, applications, documents and other sources of
information.
Business Process Reengineering (BPR) is the redesign of business
processes and the systems, policies, and organizational structures
that support them to optimize the work flows and productivity in an
organization.
Enterprise Resource Planning (ERP) is integrated business
software that supports multiple business functions across an
enterprise. ERP implies the use of Commercial Off-The-Shelf (COTS)
packaged software rather than proprietary software written by or for
one customer.

There are a couple of key concepts we should review to compare/contrast

BPR and BPM.

Compare & Contrast BPM & BPR

BPM focuses on the business process model to monitor, identify, and
implement incremental improvements.
These improvements or
eliminations fall within the fundamental rules, parameters, and culture
established by the existing business model. However, there comes a
point in time where the law of diminishing returns applies and a
transformation to the underlying business model is required. A more
aggressive approach like BPR must be utilized to evolve to the next level
of business process maturity. Consider the following illustration to

demonstrate how BPM and BPR interact along the Capability Maturity
Model Integration (CMMI):

BPR, BPM within CMMI

Allow me to provide an example. Company A performed a CMMI
assessment of their purchasing process. Results from the assessment
showed that the purchasing process was defined for certain business
sales (revenue stream) but not for all purchasing events (direct &
indirect). Another key finding was that there was no formal integration
between demand planning, supply planning and purchasing which
resulted in reactive purchasing. From the above CMMI reference, it was
determined
that
Company
As
purchasing
process
is
at
the Managed level. Company A implemented several incremental
initiatives (BPM) to improve process execution including documenting
purchasing tasks for all purchasing events and conducting periodic
purchasing planning meetings with operations.
Company A realized process improvement yet the value was limited by
following model constraints: (1) each revenue stream (business line) had
its own unique purchasing process & rules and (2) Purchasing had
limited visibility across the entire supply chain. Two fundamental
mindsets have to change:

1.

Move from unique purchasing processes to a common enterprise

purchasing model that is flexible enough to address the competitive
requirements for each business line
2.
Enable Purchasing to have visibility across the entire supply chain
to support a process-oriented management model versus a functionoriented management model.
Implementing these changes will require a formal, projectized (BPM)
effort that will redefine existing business rules, culture, and business
process activities. As Company A continues to evolve their purchasing
process they will conduct both BPM within the CMMI maturity level and
BPR as they move to the next CMMI maturity level.
How Do BPR, BPM, and ERP Relate?
ERP provides the automation of business activities. There are two
fundamental value propositions that ERP provide to customers looking to
move up the CMMI maturity model
1.

ERP reduces the effort required to perform tactical business

activities so customers can focus on strategic activities. Expanding on
our purchasing example, this would include basic functionality like
automating the creation of purchase orders, approving purchase
orders, and matching purchase orders with receipts & supplier
invoices.
2.
ERP provides the opportunity for visibility across business
functions to support business process management. That said, there
are several factors that determine the level of visibility.

Factors Impacting ERP Business Process Visibility

A competent ERP solution should provide robust, closed-loop integration
between the functional modules provided out-of-the-box. As a practical
note, there is always a need to integrate ERP to legacy systems and this
requirement should be not overlooked. A business solution is only as
good as its weakest integration. Process consistency will enable a
relevant comparison of results and management of business processes.
A mature ERP solution should provide automation and integration
support for both tactical and strategic business activities across the
CMMI model.

Interaction of BPR, BPM, and ERP within CMMI

I am a firm believer that business should lead and technology supports.
Therefore, as the business model evolves it is important to identify the
corresponding ERP functionality to support the business activities. This
model also communicates that the best approach to implement ERP is to
follow a logical maturity path for business processes.
Common ERP Misconception and Mistakes Related to BPR & BPM
Allow me to address some common misconceptions and mistakes made
during ERP implementations related to BPR and BPM.
BPR is part of the ERP implementation.

While I agree that the initial ERP implementation will result in major
changes with existing business functions, BPR will not happen unless
there is a concerted effort to redefine the holistic business model and
organizational structure to be successful with the ERP software.
Implementing ERP will give us BPM.
The direct answer is no. ERP does provide an information foundation
that can support BPM. BPM is more about a discipline for managing
processes and less about software.
Do I need ERP to mature my business processes?
Technically speaking, ERP is not a hard requirement for BPM. However,
manual routine tasks and limited visibility hinder strategic activities.
ERP can play a key support role in automating business tasks and
provide visibility through integration.
Should I implement ERP features that support business activities at
different maturity levels?
Business realities will necessitate that customers implement ERP
features supporting different CMMI maturity levels. The problem lies in
two areas:
1.

Customer expectations are not appropriate set regarding the

limited value realized from mature ERP functionality due to less
mature business activities supporting strategic activities. Example: A
procurement process scorecard measuring standard Key Performance
Indicators (KPIs) will have limited value if there is not a standard,
enterprise procurement process.
2.
Implementation partners and business solution advisors should
provide a short-term strategy and roadmap to evolve the supporting
business activities to same level of maturity. This approach provides a
quick-win opportunity for customers to drive additional value from
the existing ERP investment.

2.Selection Criteria for selecting ERP

ERP Selection Criteria

By studying, evaluating, and documenting these five key criteria, our
clients make the educated decisions that are best for their company.

Benefit from ERP Selection Criteria Evaluate Five Criteria

1.
2.
3.
4.
5.

Company
Technology
Function fit
Support
Cost of ownership

Once the vendors have been identified, the team should go about a
process of evaluating these criteria. Here is a definition of each criterion:
Company
Company size (annual revenues and number of employees) becomes very
important in your evaluation. Who will make the best partner? Who
knows my industry the best and has the most references of companies
like mine? Are they committed to serving my industry? Who will be able
to keep my company abreast of technology changes for the next 20
years? Who will make the best vendor partner?
Technology
We find that most companies have developed a technology strategy
favored by top management and IT. You will also find that ERP
vendors have their own technology strategy. Even though most vendors
profess they are open systems, in truth, each vendor has their technology
sweet spot. Understand the technology platform and architecture for
each vendor and measure it against your strategy.
Function Fit
Even though there are dozens of vendors that have a good function fit,
you will find there are only about three or four vendors that are the best
fit for your business. The key in your evaluation is to quickly find those
vendors that best address business best practices for your industry.
ERP Support
ERP vendors have a number of ways to support their client. The larger
firms have significant support ecosystems to support their market.
Buyers should evaluate all of their support systems including the
following:

Consulting organization
Implementation methodology
Education

ERP implementation methodology

Maintenance and phone support
User groups
Partner network

Cost of Ownership
Learn from the customers of the vendors about their cost of ownership.
We find that at the end of the day, most software vendors all get to the
same price for software. A number of other factors differentiate vendors
with cost of ownership. Annual support fees vary, implementation rates
and fees vary, and ongoing need for support varies from vendor to
vendor. Look to understand and confirm the total cost of ownership over
a five year period.
Ultra guides its clients in the development of a decision criteria table
that documents all the facts gathered in the evaluation phase organized
by the above criterion.
Expert ERP Selection Criteria Assessment
Todays modern ERP system provides manufacturers the tools necessary
to improve business performance. Robust business intelligence,
dashboard reporting, mobile access, real-time data access, integrated
inventory control, quality, MRP, and other features can help companies
work smarter, make informed decisions, and improve business processes.
When carefully selected, an ERP system helps companies succeed and
prosper in changing environments, setting them apart from competitors.

3.BPMS Lifecycle Vs ERP Package Life Cycle

Business Process Management Life Cycle
Traditionally, automation of business processes using workflows meant
implementing the automated process and no more.Business Process
Management takes this to the next level. BPM is about continuous
business process improvement.
As well as automating the process, we are capturing the process in a
structured way, then monitoring and optimizing the process. This cycle of
process improvement repeats continuously for the life of the process.
This introduces a culture of continual process improvement into the
organization in a structured

but easy to use

way.

The steps in a BPM Life Cycle are:

Model
Implement
Execute
Monitor
Optimize

Model
Capture the business processes at a high level.
Gather just enough detail to understand conceptually how the process
works.
Concentrate on ensuring the high level detail is correct without being
distracted by the detail of how its going to be implemented.
Historically carried out by business analysts, but simple-to-use
technologies such as Sequence are allowing the business manager to
undertake this task, as this is typically where the in-depth knowledge
required to model the process lies.
Implement
Extend the model to capture more detail required to execute the process,
e.g.
Recipients
Form controls and layout

Email message content

System integration
Execute
Instances of the process are launched and interacted with by the end
users.
Monitor
Measure key performance indicators and process performance.
View these vs. SLAs via graphical dashboards and textual reports to
monitor
how
the
process
is
performing.
Understand where the bottlenecks/inefficiencies in the process are.
Optimize
Improve the business process and performance against SLAs by reducing
the
bottlenecks/inefficiencies
identified
during
monitoring.
Simulate
these
changes
using
what-if
simulation.
Determine which changes will deliver the maximum benefit.
Fine tune the process.

Continuous Business Process Improvement

Incorporate these changes into the model and repeat the cycle for
continuous
business
process
improvement.
Changes in the business that result in a need to change the process can
be quickly introduced into the process at the Optimize stage.
For automating an existing process, we would typically start at the Model
stage, as we already have a good idea of the process and how it is
performing
(positively
or
negatively).
For a new process, we dont often know what is required, such as what
resources we need at each stage. So we would typically start at the
Optimize stage and try out some ideas, capturing these in the Model
stage as our thoughts are formulated into a process.

ERP life cycle Phases

ERP life cycles, which encompass entire 10 to 20 years of effective
operating life, are often confused with ERP Implementation Life Cycle.
Some of the phases of ERP life cycle is shown in following diagram.

1. ERP Roll out: The initial roll out of an ERP system itself consists
of various phases commencing with Request for Proposal (RFP) and
vendor selecton and ending with go live and hand holding phase.
Some important matter concerning this phase,as given below, will
have direct bearing on subsequent phases of ERP lifecycle:

Degree of matching of vanila ERP product to current business

need and extent of customization done, particularly source
code customization.

Commitment of the vendor for future development and their

financial health

Support issues including License fees and escalation thereof.

2. Optimization: After the system is live and rolled out, there will be
a period of turmoil. Due to lack of understanding, a lot pf confusion
will prevail amongst users. There will be teething problems and
some software bugs will invariably appear. With retraining, some
tweaking of the system and assistance from a responsive help desk,
this phase should be over within six months to one year and the
system should start stabilzing.
3. Maintenance: This is the longest period of life cycle, when the
organization start realizing value of their investment. Users will get
familiar and start owning the system. Some changes will be
continuing such as new reports, different workflows, some
localisation on taxes etc. Maintenance will be covered by service
level agreement, entailing payment of license fee to the vendor. For
a complicated system, there may be a third party vendor, helping
maintenance at site. The license fee, due to provision of escalation,
gets escalated at regular intervals and after some years, adversely
effects Total Cost of Ownership (TCO).
4. Extending Values: This phase overlap with the phase of
maintenance. New or changed business processes necessiate minor
or moderate changes in the system. There may be extensive
changes under scenario such as i) implementing a new accounting
system e.g. International Finance Reporting standard (IFRS) ii) A
new regulatory requirement like Sarbanes=Oxley iii) Margers and
acquisations/ restructuring.iv) Extending the system with add on
poducts suchy as Customer Relationship Management and Business
Intelligence (BI). Sometime the cost changes may be prohibitive,
particularly for systems where a lot of customization has been done
during implementation phase.
Parallel to business changes, technological changes also occur.
New release and versions appear for underlaying technologiocal
platforms like Operating System and Data Base. ERP vendors
release patches and versions of their producdts at regular intervals
which needed to be incorporated in the existing system. This
usually involves minor or modeate efforts. But, problem arises
where
many
softwae
objects
were
customized
during
implementation. Retrofitting these objects for making them
compatiable with later versions, may turn out to be a major
migration exercise involving exorbitant cost and effort.
5. Decaying Performance: For an enterprise, business need and
technological requirement, continue to evolve. Cost, Complexity

and difficulty to modify and update the existing system mount.

Fixing existing system is no more viable and provides diminishing
return.
Alternatives
are
investigated
and
decision
of
reimplementation is taken.
6. Reimplementation: Similar to Roll Out phase as mentioned
above. However, the organizations are better organized now. Initial
process will be carried out more professionally. It is likely that they
will adopt more of a vanilla version with minimum need of
customization, so that the next cycle gives a better Return on
Investment (ROI).