How Business processes supported in BPM vs ERP

Business Process Management
Business Process Difference in BPM Vs
ERP (SAP)
(ERP supports ‘low-level’ processes in APQC Process hierarchy)
Aug 2012

Agenda
 Process Hierarchy defined by APQC (L1 - L4), and SAP (L1 – L6)
 Business Process Levels in BPM versus ERP (SAP)
 BPM orchestrates processes across systems, business units and value
chain partners
 What areas BPM delivers most value – an Analyst view
 Key driver / criteria used for identifying processes for BPM
 Common business problems in ERP / SAP

APQC Process Classification Framework (PCF)
Process Levels in APQC PCF
The APQC PCF is structured into 4 Levels:
-1. Category: The highest level of process hierarchy in the enterprise, e.g. “Manage Order-to-
Cash” or “Manage Product Sales / Customer Service”.
-2. Process Group: Next level of processes as a group of processes, e.g. “Manage Multi-
channel Order Capture” or “Develop Sales Strategy”.
-3. Process: A series of activities converting inputs into outcomes, e.g. “Perform Order Capture
(per channel)” or “Develop Sales Forecast”.
-4. Activity: Indicates key tasks performed when executing a process, e.g. “Record Order in
System(s)” or “Assign Sales Quota to team”.
Process Levels - APQC Process Classification Framework
(Source: APQC – American Productivity and Quality Center)
APQC’s Process Classification Framework
(PCF) first created in 1992 is a business
taxonomy available as a generic cross-
industry framework as well as 11-industry
specific versions.
Process Hierarchy is a way of modeling large and complex processes through decomposition into lower level
processes and detailed steps to show information at different granular levels.

SAP Process Hierarchy
 Business Process is the level that aggregates business oriented functions or steps to a unit that is
meaningful and comprehensive in the sense that the steps or functions incorporated are essential to fulfill a
business mission related task
 A Process Step is typically executed by one person and documented using an appropriate representation
of the object (paper, data in IT-system,...).
 Activities are the lowest granularity for business process modeling and reflect the single actions an user
ore a system performs in order to fulfill the Process Step. I.e. filling in the fields of a special mask consists
of activities as each field has to be filled to end the step.
Source: SAP
Source: SAP

Business Processes Level in BPM Versus ERP / SAP
Web Order Capture Process
B2B Order Capture Process
CSR Order Capture Process
Mobile Order (Sales Rep)
Capture Process
Web Order Capture Process
Multi-Channel Order Capture Example (Order-to-Cash Process Category)
ActivityFlow
Level-4 (APQC) /
Level-5&6 in SAP
BPM enables, supports and manages higher level
processes (Level 1 – 3)
Some Customers implement only Level-2 & Level-3
and some aspects of Level-1 in BPM. If no ERP or
app exists, BPM can be used for Level-4 process
ERP / SAP typically supports Level-4 and
lower processes (mapped to one or more
transactions);
Some Customers implement Level-3 process in
ERP / SAP through heavy customization (not a
best-practice)
Level-2 & 3

BPM extends standardized ERP processes across your
enterprise for wider reuse to increase ROI
Mobile Order (Sales Rep)
Capture Process
Web-based Order Capture Process
ERPCRM
Leverage Standardized, Out of
the box SAP Processes (typically,
Level-4 and lower); and
minimize customization
Unique, Differentiating Processes (Level - 2 & 3) running
in IBM BPM gives significant competitive edge
Adapt & Extend Integrate
- Easier to modify and better process change management
- Quickly introduce business or compliance controls
- Business rules, dynamically modify to meet business needs
- End-to-End visibility and KPIs help make better decisions
Multi-Channel Order Capture Example
(Order-to-Cash Process)
ERP

What Areas BPM Delivers Most Value?
Source: MWD Advisors
 Want Competitive Advantage, Make BPM a Core Competency - Gartner
 Four areas in an organization where BPM adds value according to MWD Advisors,
an European IT advisory firm based in the UK.

Why - To BPM or Not to BPM ?
Key Criteria that drive the need for executing business processes in BPM
Systems
 Its about importance to business and delivering value consistently
 Its about need for flexibility and agility to respond to market dynamics
 Its about abstraction from IT systems for easy and quick change
 Its about coordinating work across multiple teams, organizational silos and value
chain
 Its about Compliance, Control, Visibility and Management

Common Business Challenges faced with SAP / ERP
No Consistency in
Execution; Missed SLAs
 No Team Collaboration; All done via e-mail &
phone calls; Missed SLAs from out-of-sync;
 No guidance to users on sequence of transactions;
 Inconsistency in users performance / productivity;
 Need for extensive training to new employees;
 No prioritization or work load management;
No Collaboration / Work
Load Management
No real-time visibility to
status, decisions
No KPIs; Impacts SLA
 SAP reporting is too detailed & difficult to find status;
 No process view; No alerts, KPIs, Charting
SAP Blueprinting
processes are static, not
executable;
No link to SAP transactions
 SAP blueprint processes live in static docs, not
executed; SAP only runs L-4 process (transactions)
 No link between transactions and blueprint process
No process discovery for
baseline (as-is) process
 No way to find out (discover) “as-is” process;
 Hard to optimize processes with no baseline (as-is)
Mostly done manually;
No automation; no
flexibility
 Heavy reliance on users doing things manually;
 No automation; no flexibility to meet changing
business needs
Pain Point Business Challenges IBM BPM Solution
BPM Guided
Workflow
Team Collaboration, Work
Prioritization, Single UI by
reusing SAP GUI in BPM;
Reuse blueprint processes
Process Execution
BPM executes Blueprint
Processes imported from
SAP Solution Manager
Process Discovery thru
Monitoring (BAM);
Discover ‘as-is’ processes
by tracing SAP transaction
flow via real-time
Monitoring of SAP
transaction events
End-to-End Integration
and Automation (STP)
of Processes with
Business Rules

How Business processes supported in BPM vs ERP

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