ERP, CRM and BPM vs. Business Process Optimization

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When I speak to customers about business process optimization many have the initial reaction of, “isn’t this part of ERP or CRM?” or, “how does this differ from BPM?” They may be surprised to learn that these technologies are not synonymous. To explain, let’s talk for a moment about the high-level definitions and general use of ERP, CRM and BPM.

ERP (Enterprise Resource Planning) provides a software framework for managing a company’s resources, orders, or other throughput requirements. ERP systems normally come with a preset number of capabilities and rules. Most ERP systems provide compliancy tools to meet SOX (Sarbanes-Oxley 2002 US Federal law) or other such regulations. ERP is, at its heart, a set of useful tools into which a company must fit its own rules as best it can. ERP systems contain reporting tools and sometimes a set of analysis tools to identify problems or highlight compliance issues. ERP deployments are often front loaded with a fairly long ROI track that really kicks in upon full release into the company’s processes.

CRM (Customer Relationship Management) solutions such as Microsoft Dynamics CRM, include a range of capabilities surrounding multiple customer management requirements including customer tracking, relationship milestones, case management, process alignment and a good deal of reporting and analytics capabilities. CRM helps companies most when it’s flexible and applied throughout the complete customer cycle. The result is an often-complex deployment across multiple years that results in a sine curve of return on investment as each wave of deployment brings results.

BPM (Business Process Management) should allow a business to handle creation and improvement of a broad spectrum of processes that directly – or indirectly – impact a customer. As companies providing BPM software solutions emerged, so too did the circles of continuous improvement that described the key steps. These steps are commonly accepted to be a continuous improvement process that includes observation, design, modeling, execution and monitoring. Sometimes the circle is improved by optimizing and re-engineering. BPM is not normally used in isolation. In recent years, the manufacturing originated Six Sigma theories that have been well-published and tied to BPM as companies seek to improve their processes and compliance. Since 2002 Lean Six Sigma has been a familiar concept in many large companies. Continuous improvement carries with it some of the difficulties of continuous marginal improvement. Identifying and clearly showing ROI from process changes can be both simple and complex especially for small adjustments. The benefit of BPM is cumulative and ongoing, and again, is usually realized sometime after the initial delivery of the solution.

How then does Business Process Optimization differ?

Simply put, business process optimization differs in its intent – what it makes visible, and its time to value (ROI). Here’s how these differences make themselves evident in practice:

Intent. The goal of business process optimization is to take an existing process, map the steps within the process to best practices, and enable the organization to complete the process faster while automating delivery of the end product of the process to the right person at the right time. This differs from CRM, for example, in that there is a push to the worker rather than a period of what I call “human latency” in which there is a delay between one worker in the queue to the next, or cases in which – shudder – a worker cherry-picks the next easiest task. How significant is this? It’s as significant as being able to stand beside the worker watching their desktop as they go from one task in their workload to another. It provides an enormous amount of control for the business to ensure workflow is being processed in the manner the business requires and for which the worker is being paid.

Visibility. Traditionally BPM, ERP etc. rely on historic reports and email or similar notifications concerning process and ownership of “the next step”. Business process optimization is more proactive, providing real-time information so that a business can see the workload state, and it achieves optimum queue time by pushing work to the worker. This helps improve the customer experience by identifying workload bottlenecks faster and eliminating human latency to ensure optimum work throughput.

ROI expectation. By deploying and using a set of operational management principles, the ROI is maximized and time-to-value is minimized when compared to ERP, BPM and/or CRM:

  • A standalone business process optimization solution can be deployed within three months, as opposed to the multi-year deployment common with BPM, ERP and CRM.
  • Business process optimization solutions provide native integration methods to reduce points of failure or process complexity within existing systems.
  • ROI is expected within 20-25 weeks with early adopters experiencing improvements in the region of 20% FTE savings inclusive of administrative requirements.

This speed-to-ROI is a significant reason why businesses are examining business process optimization using a formal suite of capabilities.

I hope that this summary and outline helped you understand the difference you should expect from a well-delivered business process optimization solution. I’d love to hear your thoughts on this. Leave a comment below!

One thought on “ERP, CRM and BPM vs. Business Process Optimization

  1. Business process management solve problems related to business which resulting in higher degree of customer satisfaction. BPM helps to improve business in effective way. In business process optimization it needs more ROI and time to value is minimized as compared to BPM,ERP AND CRM.

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