Packaged Applications vs. BPM Platform – How do you choose?

Having worked with customers globally in the Business Process Management (BPM) industry for several years, one issue I see coming up repeatedly is the conundrum that customers face while having to choose between Business Process Management platform and a packaged application.

If you are a business leader with a complex business problem that you are looking to solve, chances are that you are facing the same challenge. Let’s deliberate on what could be the way forward.

Packaged applications demonstrate deeper understanding of the business domain and specific use case. But, packaged applications – as you may know by experience, lack platform agility, have inflexible workflows; come with hard coded rules and weak integration capabilities. Hence, they fail to provide the organizations with capability to differentiate their process or service offering.

BPM solution, on the other hand, are easier to tailor to the organization’s unique business needs. They also extend more easily to meet broader and emerging requirements.

Here are four considerations that give BPM platforms an edge over packaged applications.

First – Managing Business Rules as Organizational Assets

Very few packaged applications have the support for explicitly managing business rules. These business rules are often found deep inside the package, which makes it very hard to manage them if they need to be changed – in response to say a new regulation or change in market dynamics.

BPM software take a different approach – they centralize these rules and make them explicit as well as accessible. They help the organization bring these business rules out of the business applications and provide business users a visual representation to manage and modify them.

Second – Supporting Process Variations that Differentiate Organizations

Let’s take an example. All banks issue loans. These loans are all pretty similar. The process variations that exist between banks are what differentiate them. A modern business application should be able to support this degree of variation. Unfortunately, most packaged applications have been designed to do the opposite – to standardize and eliminate variation.

BPM platforms support visual process designing and modeling that allow organizations to differentiate by enabling such process variations while maintaining appropriate guardrails.

Third – Providing Process Visibility and Insights leading to Process Optimization

It is critical for businesses to have complete visibility into their operations. Without visibility, there is no insight, and hence no improvement. Visibility comes through strong reporting capabilities. These reports could be for the overall process performance or focused on a part of the process for investigative purposes. Most packaged applications provide some reporting features. But, they lack the ability to easily configure new reports. A BPM solution provides real-time business activity monitoring through which users can quickly get the insights into process performance and optimize the process further.

Fourth – Having the Functional Breadth to Cover Adjacent Business Areas and Support Application Consolidation

The adjacent business areas have varying levels of differences in complexity, regulations, customer expectations and business priorities. A solid future-proof plan must consider the possibility of rapid business expansion and changing business priorities.

For example, a bank may focus majorly on commercial lending and commercial real estate lending, while small business lending may be a minor focus area. Going for a packaged application that focuses on origination of only the first two categories of loans will mean that any decision to expand into small business lending will require procurement of another packaged application. Over time, this becomes more complex to manage and creates operating silos.

But, the counterargument that we keep hearing is that horizontal BPM solution per se lack the underlying domain knowledge and functional richness, and may present greater implementation risk.

There has to be a way out.

We, at Newgen, think that organizations should consider a 3rd alternative –

BPM software with industry frameworks: Our experience with our customers demonstrates that this approach combines the best of both – packages and platforms. That’s why we have spent considerable energy and effort in building domain solutions over our integrated BPM and ECM platforms in various areas across Banking, Government, and Healthcare and have seen significant customer successes over time. The underlying BPM platform provides future-proof agility, and industry-specific frameworks (built on top of the BPM platform) provide the domain knowledge required to ensure a fast and successful implementation tailored to the unique needs of a business.

That’s really the best of both worlds!