It is nothing new to state that Business Process Management Software (BPM Software or Workflow Software) and ERP software go hand in hand. In fact, I can probably count on one hand the number of meetings I have had with private companies in which ERP wasn’t discussed in the initial BPM meeting. In private industry, the ERP and the BPM or Workflow solution are inextricably intertwined. So much so, that the BPM consultant will end up discussing the client’s ERP within the first 30 minutes of the very first consultative meeting.
Today I was in a meeting with a small company (100 employees) that had developed their own in house ERP software. Present in the meeting were the executive president, numerous technical managers, and a number of different business area managers. As is often the case, the president was not very technical. He started the meeting by talking about the company system (he didn’t call it an ERP) at a very high level and how this system was designed to handle all of the company processes. He hadn’t yet seen our BPM Software, but he ended his initial remarks by asking, “If we already have a main company system (i.e., ERP) that handles all of our company processes, then why would we need BPM Software or a Workflow system?”
This is a very good question. The question points to a general weakness of the BPM Software Industry and a strength of the ERP industry. ERP vendors have positioned their software as the system of systems. They claim that this is the system that will run your business. It manages your accounting, materials, inventory, and production process. Once you have it installed you will have an efficient, modernized company. And yes, it will even make your coffee.
Of course, that sort of sales pitch is effective. It goes to the heart of the insecurities of every General Manager or President, especially those that aren’t so familiar with the latest acronyms and systems jargon. That is why the ERP vendor has historically been able to convince these businesses to fork over hundreds of thousands if not millions of dollars and go through a traumatizing process of installation that will usually last many months if not years.
Of course, the ERP solution is important. I am by no means suggesting that companies can forgo this investment. However, the result is that when the BPM vendor or workflow software provider rolls in to town, the reception is usually one that begins with a strong bit of skepticism. So, the question is, how does the BPM sales person now explain to this decision maker that there really is a need for a new business process system. Hell, the BPM vendor doesn’t even have new language to describe what he/she is selling - it sounds just like the “other” system the company already has installed.
This is a real problem when dealing with SMEs because of the limited attention span the decision makers usually have when it comes to technologies.
I don’t have an easy answer. I watched today as one of the sales guys on our team sloshed his way through a standard BPM explanation. I would have kicked him under the table had I been sitting closer in order to tell him to just get on with the demo. The description just wasn’t doing justice. However, as is often the case, 30 minutes later as we were wrapping up the demo, the customer’s face had changed, and he was now rattling off ideas on where his business could implement BPM Software. Why is BPM so difficult to describe yet often so easy to demonstrate?
In the case of this customer we were demonstrating a Purchase Approval Process. Of course, the customer’s ERP manages the purchase process - every ERP vendor will tell you that their software has a purchasing module whether it is SAP, JD Edwards, Great Plains, or Openbravo. But it usually isn’t until many months after the ERP solution is installed that the company managers realize that an important part of their purchase process still isn’t automated. Yes, the ERP will record the purchase of the product, create the appropriate accounting entries, produce the Purchase Order, allow for the reception of money, deduct the product from inventory, and confirm the delivery of the goods or services and receipt of payment. But what about all the company best practices that go into the act of making the decision to make the purchase? Ahh, that just sort of got let out as an after thought. Or maybe it was specifically left out so that the ERP vendor could try and go back a year later to sell another product? (I am really not a conspiracy theorist). Either way, most businesses sooner or later come to the conclusion that their ERP still left them with a lot of Process Problems.
This is where workflow software or BPM software (there is no difference - that was another marketing blunder) adds a much needed layer of process management to the company. Let’s take the Purchase Process. In this company, the process went something like this -
- Employee makes a Request
- Request stake into consideration existing products and reference pricing
- Based on the reference pricing either one or two levels of management approval is needed
- Once approved, the purchasing manager sends out 3 Quote requests to approved vendors
- The quotes come back and need to be compared
- Final decision and a final approval ocurr
Following best practices in this business process could save hundreds of thousands of dollars in the case of this company. But time and time again the company didn’t follow best practices because the process was executed differently every time.
I’ll let you know next week if they decided to buy the BPM Software… 