In the past several years, some law firms have implemented ERP systems for some or all of their financial and HR functions. Others have begun embracing what I call 'Baby-ERP' systems which are the latest releases of some of the law-firm specific finance systems that are inching their way towards the beginning realm of ERP.
A very common question I get asked is "Why do we need BPM [Elegrity's Law Business Management System (LBMS)] when we have X, Y or Z ERP or 'baby-ERP' or are planning to get it?" It's a great question - and it inspired this blog (thanks to customers and prospects alike for the wonderful collaborations and blog fodder!).
Not a New Question
Let's start with the fact that, although fairly new for law firms, this question is not new in the larger business context. Global corporations (non-law firms) almost always have ERP deeply embedded in their organization. Inevitably, we get engaged by these corporations when the need for enterprise Business Process Management (BPM) is recognized (and the fact that the ERP system cannot deliver it). Some of these corporations recognize the need for BPM early, saving themselves more money over the long term than I can calculate. Others recognize it only after years of pain and extraordinary cost.
I hope to help our law firm customers and prospects learn from the corporate world so you can save yourselves the experience of the pain of getting the role of ERP wrong in your firm.
Key Reasons BPM is Required with ERP
Here are the key reasons I and other experts believe BPM is required even if, or perhaps especially when, organizations have ERP:
- ERP is focused on management of data held within the ERP system in various, but siloed, functional areas. ERP systems may offer ‘embedded’ or functional workflows, but they provide no or very poor enterprise workflow that is considerate of cross-functional needs or the needs or uses of non-ERP business systems! BPM supports both functional and enterprise process transformation scenarios.
- BPM is far more agile than ERP systems, where BPM requires on average 3-6 months to implement, ERP takes 20-24 months (minimum). Change management (key to agility) follows a similar pattern, with BPM empowering enterprises to implement change 85% faster - now that's what you call agility!
- ERP needs BPM to help realize its full value. BPM helps ERP by allowing it to stay functionally focused while providing for the cross-functional, cross-system and cross-boundary needs of organizations.
I concur with all of the above - but I will add one more that I believe is crucial: END-USER ADOPTION.
Working with an ERP system is somewhat akin to flying a 747 -what if you sat down in front of the pilot's console on your next flight on a 747? Do you think you could get going right away? HARDLY. It takes years to learn how to work all those controls. The same can be said for ERP systems. That's why you leave using the ERP system to the back-end core operational teams, and implement nice and friendly BPM in front of them for the end-users. In this way, you achieve incredibly fast adoption rates. ERP alone? Well - get ready of hundreds of hours of costly training, with questionable results.
Stay tuned for future blogs in which I will explore ways ERP vendors and IT departments attempt to overcome ERP's lack of business process management capabilities - and the dangers of misplaced investments of both time and money.