As companies grow, they face the challenge of managing increasingly complex operations, often wrestling with escalating volumes of data and an ever-expanding array of business functions. A company that relies on siloed data and disconnected business departments can see productivity slow to a crawl, which may ultimately jeopardize the company’s ability to maintain a competitive edge and meet customer expectations.

Enterprise resource planning (ERP) and business process management (BPM) software both offer solutions to that problem, allowing companies to reign in complexity and improve overall efficiency. While the two systems share the common goal of streamlining business processes, however, they each approach the task from a different angle.

ERP systems build efficiency primarily by collecting and organizing key business information in one system, while the goal of BPM software is to optimize organizational workflows. For many companies, using a combination of both solutions offers the best of both worlds. Enhancing ERP’s unified data framework with BPM’s process optimization capabilities not only boosts overall efficiency but improves agility and strategic decision-making. This article examines the roles of both ERP and BPM software, the differences between the two solutions and the benefits companies can achieve when combining the forces.

What Is ERP (Enterprise Resource Planning)?

Enterprise resource planning (ERP) is a type of business software that collects data from a variety of departments, including accounting, sales and marketing, and pools it in a centralized database to provide cross-departmental visibility. By allowing departments to easily share vast amounts of data in real time, an ERP’s capabilities translate into significant cost savings and improved productivity, with employees spending much less time searching for the data they need to get their jobs done.

What Is BPM (Business Process Management)?

Business process management (BPM) is a software system that involves streamlining business processes to improve an organization’s efficiency, agility and overall performance. If companies are grappling with cumbersome workflows, BPM software helps by allowing companies to spot bottlenecks, reduce redundancies and refine business processes so that they align with the company’s broader strategic vision.

Key Takeaways

  • ERP systems centralize a company’s data across core functions, allowing finance, human resources, sales and other departments to access and analyze information quickly.
  • With BPM software, companies can model, refine and automate operational processes to speed up a variety of business activities and boost productivity.
  • While each approach has distinct benefits, many companies achieve greater efficiency and productivity by combining the integrated functionalities of ERP with the process-based improvements of BPM.
  • The benefits of combining ERP and BPM systems include increased agility, improved risk management and greater collaboration, all of which can raise a company’s return on its investment in ERP and BPM software.

ERP vs. BPM Explained

At a quick glance, ERP and BPM strategies may appear similar. After all, they both leverage technology to achieve the common goals of improving efficiency, boosting productivity and reducing costs.

But despite their similarities, each takes a different approach to accomplishing those goals. ERP systems are comprehensive software platforms designed to integrate all aspects of a company’s operations, including accounting, sales, marketing and beyond. The hallmark of an effective ERP system is a robust data repository that supports information-sharing across the organization, automates business processes and fuels organizational insights. Increasing efficiency is one of the top reasons companies deploy ERP, according to a recent study. Ultimately, the software does just that, allowing departments to access reams of data to drive efficient analysis.

Meanwhile, BPM is a strategic approach that often involves the use of advanced technologies geared toward helping companies design, model, monitor and optimize business processes. The goal of BPM is to make business workflows more efficient and flexible by automating certain tedious tasks, for example, so the company can easily respond to constantly shifting market conditions. In a recent survey, two-thirds of process management experts said they view BPM as an important asset for the future.

Although BPM software can streamline a company’s processes, it is not designed to replace the wider range of functions found in an ERP system. Companies often benefit from blending ERP and BPM, using ERP systems to consolidate data and ease the flow of information, while taking advantage of BPM solutions to continually refine business processes.

Indeed, markets for both of these software solutions are booming. The global ERP software market reached $48 billion in 2022 and is expected to continue growing, with forecasts showing it will rise to $96 billion by 2032. At the same time, the global market for BPM systems in 2022 was $14.4 billion and is expected to grow at a compound annual growth rate of 19.9% through 2030.

Key Differences Between ERP and BPM

When comparing ERP and BPM systems, it might help to think of ERP as the foundation of a house, while BPM acts more like a blueprint. ERP systems provide the crucial structure needed to support the business, and BPM maps out the detailed workflows necessary to achieve peak efficiency. The following chart outlines the key differences between ERP and BPM.

Key characteristics of ERP and BPM software

ERP BPM
Definition A suite of integrated applications to collect, store, manage and interpret data from various business activities. A methodology or system to optimize and improve the efficiency of business processes.
Objective Unify core operational functions by centralizing operational data and streamlining internal business practices. Improve efficiency through the design, implementation and analysis of business processes.
Benefits Improved data accuracy and consistency, efficient operations, lower operational costs and more informed decision-making. Increased process efficiency, better adaptability to change, improved business agility and stronger compliance.
Challenges High initial cost (especially with on-premises solutions). Implementation can take time and customization can be complex. The system must continually adapt to evolving business needs and market conditions. Users may resist process changes that disrupt their usual workflow habits.
Typical Customers Large enterprises with complex and diverse functions across multiple departments. Small and medium-sized businesses are also increasingly turning to ERP solutions. Organizations of any size looking to improve business processes and build greater efficiency.
Key Components Commonly includes modules for financial, human resources, supply chain and customer relationship management. Typically includes tools for process modeling, automation and optimization, as well as business rules management and analytics.
Technologies ERP software collects and manages data from various business departments within a single integrated system. BPM tools offer process modeling, automation and optimization capabilities, and are often integrated with core systems like ERP.
Scalability Highly scalable and suitable for growing businesses. Scalable to the needs of the business; can start small and expand as required.
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How ERP and BPM Complement Each Other

ERP and BPM software are distinct solutions, but they also complement each other in many ways. In fact, advanced ERP solutions often have integrated BPM features that help streamline workflows. Using the systems in tandem offers the following benefits.

  • Optimizing processes before implementation: ERP systems are adept at simplifying processes, but it’s important to analyze and refine existing business functions before implementing the software. That’s where BPM can step in, playing a crucial role in helping companies identify and eliminate redundancies, iron out kinks in workflows and establish clear process guidelines, all of which can be seamlessly integrated into the ERP system.
  • Continuous improvement post-ERP implementation: Following the ERP implementation, insights from the ERP system can feed into BPM tools to drive continuous improvement. For example, a company might use BPM tools to speed up order fulfillment processes based on insights gained from the ERP system. The result? Improved customer satisfaction and operational efficiency over time.
  • Bridging gaps in ERP functionality: ERP systems are powerful tools that can handle a wide range of core operations, but they can’t solve every workflow snag. BPM can help fill gaps in ERP system functionality by enabling the optimization of certain business processes, such as customer relationship management functions. This allows for quick modifications of workflows, as well as the integration of additional BPM capabilities, such as real-time process monitoring and improvement, without altering the core ERP infrastructure.
  • Enhanced agility and flexibility: Combining an ERP system’s integrated data and process management capabilities with BPM’s focus on continuous process improvement and adaptability can significantly improve a company’s ability to pivot when market conditions change. Consider a manufacturing company that uses its ERP system for integrated management of supply chain, inventory and customer orders. When faced with changes in supplier availability or customer demand, BPM allows for rapid adjustment of supply chain processes to speed responsiveness.
  • Improved compliance and risk management: Integrating an ERP system’s robust data control with BPM’s agile process management makes it easier for companies to mitigate risk and maintain compliance with industry standards and government regulations. For example, when regulatory changes require updates in data handling, an ERP system can ensure that the data infrastructure remains compliant, while BPM adjusts the workflows to incorporate these changes seamlessly.
  • Data-driven insights and decision-making: ERP systems consolidate data across various departments, offering accurate and real-time information that serves as the foundation for informed decisions. Meanwhile, BPM uses this data to identify inefficiencies and areas for improvement in workflows, which facilitates strategic decisions. For example, if an ERP system reveals a trend of increasing product returns due to quality issues, BPM can then redesign the quality assurance process, directly addressing the root cause identified by the ERP data.
  • Enhanced collaboration and communication: By combining ERP and BPM systems, a business can create a powerful engine for organizational collaboration and communication. Unified data in ERP systems provides the foundation for consistent and informed interaction across different business units, while BPM eases workflows and keeps communication among employees flowing smoothly.
  • Cost reduction and increased ROI: ERP and BPM tools ultimately reduce costs and increase return on investment (ROI), although they accomplish those goals in different ways. By consolidating business functions into a single platform, ERP systems reduce data redundancy and decrease operational costs. BPM optimizes business processes, which trims the time and resources required for tasks and allows for rapid adaptation to changes that can further drive cost savings.

ERP vs. BPM: Choosing the Right Solution for Your Business

If companies are choosing between ERP or BPM solutions, it’s important to understand how each technology aligns with business objectives. ERP systems are comprehensive, with an emphasis on integrating various functions throughout the organization into a unified system. This makes them ideal for companies looking to consolidate their information and enhance data visibility across departments to improve operational efficiency and decision-making.

Meanwhile, BPM systems focus on optimizing and managing specific business processes, making them a good match for companies aiming to enhance workflow efficiency, agility and process innovation. BPM is often the go-to choice for businesses seeking ways to continually improve and adapt processes to changing business needs and customer demands.

Determining which solution is best depends on an evaluation of an organization’s current challenges and strategic goals. If the goal is to achieve a high level of integration and automation across various business functions, an ERP system may be the most sensible choice. However, if the focus is on refining, optimizing and automating specific processes to increase efficiency and adaptability, a BPM system is a solid option. For many organizations, the optimal approach leverages the strengths of both systems: ERP for its data integration and management capabilities, and BPM for its process optimization and flexibility. The resulting synergy allows companies to not only streamline their operations but also ensure that processes are always evolving to meet shifting demands.

Measure and Improve BPM With NetSuite ERP

NetSuite ERP blends the capabilities of both ERP and BPM systems by offering a comprehensive, cloud-based suite that integrates core business functions with flexible process management tools. By combining these capabilities, businesses can not only manage their data and other resources effectively, but they can continue to adjust operational processes as well.

NetSuite ERP includes specific BPM features, like workflow management, that enable users to design and automate business processes; it also provides analytics for real-time insights into process performance. These features allow businesses to identify bottlenecks, streamline operations and make data-driven decisions that improve performance.

Companies also benefit from NetSuite’s cloud-native architecture, which offers scalability, widespread accessibility and lower total cost of ownership compared to traditional on-premises systems. NetSuite’s real-time dashboards and reporting capabilities give managers and other decision-makers an up-to-the-minute view of their business that can form the backbone of informed and timely decisions. Additionally, NetSuite’s customization options and wide range of integrations mean businesses can tailor the system to their unique needs, further bridging the gap between ERP functions and BPM benefits.

When choosing between ERP and BPM systems, companies should consider their primary objective: Do they need a comprehensive solution to integrate all business functions (ERP) or a flexible approach to improve specific workflows (BPM)? But using the two systems together — leveraging ERP for integrated data management and BPM for continuous process optimization — can ultimately result in significant efficiency and agility benefits.

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ERP vs. BPM FAQs

What is the difference between ERP and BPM?

Enterprise resource planning (ERP) systems integrate and manage core processes business, such as finance, human resources and supply chain management, within a single system, offering a seamless flow of information across departments to streamline operations and improve data accuracy. Business process management (BPM) tools, on the other hand, focus on the optimization, management and improvement of a company’s business processes, with an eye toward increasing efficiency and adaptability to change. Essentially, ERP is about integrating data and systems, while BPM is about improving workflow and process efficiency.

What does BPM mean in ERP?

In the context of enterprise resource planning (ERP) systems, business process management (BPM) refers to the methodologies, tools and techniques used to design, analyze, monitor and improve business processes. BPM aims to optimize the processes that the ERP system supports to maximize value and efficiency. BPM in ERP aligns business processes with organizational goals, leveraging the data and functionality of the ERP system to enhance operational performance and agility.

Is BPM part of ERP?

Business process management (BPM) isn’t considered a component of all enterprise resource planning (ERP) systems, but the two can be connected and used simultaneously. ERP systems integrate and manage core business functions, like finance and human resources, while BPM focuses on optimizing and improving specific business processes. However, many ERP solutions incorporate BPM tools and methodologies to enhance process efficiency within the ERP framework.

Which are the three types of ERP?

There are three types of enterprise resource planning (ERP) systems, designed to accommodate how the system is deployed: in the cloud, on premises or in a hybrid environment. Cloud-based ERP systems are hosted on a cloud provider’s servers and are accessed through the web, offering scalability and lower up-front costs. On-premises ERP solutions are installed locally on a company’s own hardware and are managed by its IT staff, providing greater internal control. Hybrid ERP solutions combine elements of both, offering the flexibility of the cloud while keeping critical information and business functions on premises.

What is the difference between ERP and HCM?

ERP stands for enterprise resource management. ERP is an integrated suite of applications that companies use to centrally manage their core business activities, such as finance, manufacturing, inventory and order management. HCM stands for human capital management. It represents a set of processes and policies related to acquiring, managing and developing employees. HCM software enables companies to manage human resources, payroll and financial data.