Enterprise Resource Planning And Business Process Management - A Marriage Of Convenience?

Abstract

This paper investigates the impact of the simultaneous utilization of Business Process Management (BPM) procedures on the payoff period of an investment in an Enterprise Resource Planning (ERP) system. ERP has been put into operation in 400 of the Fortune 500 companies at an average cost $15 million. Indeed, some implementations have had price tags as high as $300 million. Most companies evaluate such expenditures by looking at the return on investment (ROI), so it is important to identify factors that might speed up the payoff on an investment in an ERP system. It is hypothesized that the simultaneous implementation of BPM techniques can accelerate the payoff on a firm's investment in such a system. This paper examines this hypothesis by developing a multiple regression model where the percent investment returned, time since implementation, and number of departments where BPM was put into service are the variables of interest. Using data from a sample of firms where ERP was put into operation, it is concluded that time, and not the simultaneous implementation of BPM, has the most impact on ROI. It is further concluded that more extensive data should be collected to test this hypothesis with more accuracy.