A Good Explanation for the Difference between ERP and BMP

Business Process Management: What are the differences between BPM and ERP? 
Can a BPM software solution replace a large ERP system?


It's easy to be confused since people working in both the areas talk about how BPM/ERP is not just software, but a "holistic management approach" or a "business strategy". Just remember these keywords: BPM - process, ERP - integration.

BPM is focused on workflows - it is aimed at optimizing, improving and automating business processes. ERP is focused on integration (of internal and external information across business functions).

Let's try to understand this with an example:

Suppose you're a salesperson whose job is to sell ridiculously expensive pens to to the filthy rich. The company you work for has several salespeople, and operates in fifty cities across the country. The typical sales process includes identifying potential customers (prospects), planing the sale, approaching the customer, follow-up, making the actual sale, delivery & receiving payment and recording the sale. It also involves supporting activities such as a manager's approval for an addition to the prospect list or a travel request.

A BPM tool will allow your company to manage the activities in this entire sales process. For instance, a business rule can be configured to automatically map a salesperson to a newly-added prospect, depending on location and skill level; a salesperson can view the list of prospects assigned to him and so on. The managers can monitor the resources (time, money, people) taken to accomplish each activity in the workflow and accordingly optimize the process. With modeling and simulation, they can determine the effect on the sales, if 20% of the salesmen in Miami go on a vacation. This is BPM.

In layman's terms, ERP is a suite of similar-looking applications from a single vendor that use the same central database. Suppose, your company has an application where you can record the number of units sold by you daily. Another application available to the manufacturing department uses this information to forecast the demand for next week, and order raw materials accordingly. This information is also used to calculate your sales commission, which you can view in a similar-looking payroll application. Your HR manager has access to a dashboard, where she can view your and your co-workers' sales performance, and use this information to decide who'll be promoted. This is ERP.

Coming to the second part of your question: Can you design a Pega BPM-based solution that features all the functionality provided by SAP ERP? Probably, yes. Should you do it? Probably, no.
An ERP can be viewed as a system that includes some pre-configured BPM functionality.  Given the current capabilities of the ERP and BPM suites available in the market, an ERP will serve you best when you want a unified view of your organization. Remember, unless you're a huge organization, most ERP solutions are probably too bloated and over-priced for you. A BPM solution should be used when you've a complex process with several business rules in mind: when you want to improve, optimize or monitor a particular business process. If the process under consideration is already being handled by the ERP suite, you might want to look at the BPM solutions offered by your ERP vendor (e.g. SAP NetWeaver BPM component).

It is important to note that the definitions of BPM, ERP, CRM and other such concepts are getting extended as vendors incorporate more and more features in their products. For instance, the functionality of the early ERP systems was limited to manufacturing, accounting and HR. Now, many ERP suites have expanded to include CRM and BI functionality. Similarly, BPM vendors like Pegasystems are now offering pre-configured "frameworks", which compete with other "enterprise" applications. The choice and perception of the buyers is largely influenced by the consultants. In future, ERP suites might become more BPM-centric, offering built-in workflow and rules engines.


http://www.quora.com/Business-Process-Management/What-are-the-differences-between-BPM-and-ERP