Making an ERP System Agile: the BPM Way

ERP systems have long faced inflexibility and agility issues while addressing the process needs of an organization. BPM can play a catalytic role in making the ERP system more agile and flexible to the evolving and dynamic process requirements of organizations.

Many BPM tools and systems have evolved with the objective of leveraging existing investments in ERP systems, where the bulk of the core IT processing is being handled. BPM tools are expected to make ERP more agile by plugging gaps in human interaction and workflow process in enterprise IT systems.

For enterprise IT systems to be agile, they should be able to do the following:

  • Map the human actors in a organization and their actions in a holistic business process life cycle
  • Allow organizations to easily separate out and store (as an artifact – decision rules) the decision making criteria for every step in the process
  • Make it easy (with due approval process) to change the rules of such decision points and accordingly re-direct the process
  • Calculate the time taken to execute each process
  • Ensure effective process management, which will enable stopping and re-starting of processes based on certain approval requirements
  • Predict the efficiency of a step in the business process based on the volumes generated in one of the previous steps
  • Depending on the outcome of decision rules, enable effective traversing of the workflow in the reverse direction and take another path (backward chaining)

So, how can we bring in agility to enterprise IT systems like ERP that lack in many of the above requirements?

BPM tools have built-in connectors or adapters that can listen or tap into many of the modern ERP systems. These adapters allow control of ERP system process, bring the flow control into the BPM system and allow intermediate human decision process to be executed.

Let us take the case of an accounting ERP system that does reconciliations and generates exception reports. Without a BPM system, all exception reports would wait for human intervention to check the value and quantity of exception to route to appropriate verifying authority. Typical ERP systems will not have tracking in terms of time taken if there were multiple levels of verification for an exception report. If new rules have been introduced owing to regulatory requirements or change in accounting practices, they will not reflect in the ERP system unless there is a huge investment to modify the ERP system. These challenges make the accounting ERP system inflexible and non-agile for the evolving and dynamic needs of an organization.

However, if a BPM system is implemented to tap into the reconciliation process it can stop the process once exception reports are generated, and take over the automation of verification process, which was earlier a manual routing process. The BPM tool will be able to effectively perform the following:

  • Route the exception reports to multiple levels based on the pre-set exception value and volume criteria
  • Pull in appropriate documentation of regulatory rules (company, government or accounting practices) along with exception reports through integration with a content management system for easy reference to the person verifying the exception
  • Tap into database and forms as appropriate and allow relevant modifications
  • Keep a system of records for such modifications for future audit purpose
  • Track the time taken for different set of approvals
  • Enable changes in the decision and rule criteria in the BPM system without really modifying the core accounting ERP, in the event of regulatory changes
  • Update relevant databases and re-trigger re-conciliation process of ERP and obtain the second set of verified reports with no exceptions

With this facilitation by the BPM tool, the accounting ERP can become more agile as compared to its original process cycle, benefiting the organization in multiple ways.

BPM can play a vital role in making an ERP system agile and adaptable to the dynamic needs of the business. I am looking forward to reading your experiences and thoughts on the subject.

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