Like It or Not, Here Comes the Facebook-ization of ERP

It may sound like vintage vendor hype, but there's business value in linking ERP apps and Enterprise 2.0 tools.

This much you should know: Resistance to Enterprise 2.0 talk is futile. In 2011, Social Media-inspired, Facebook-like business applications are going to be all the rage...or so we're being told.

The Facebook-ization of ERP software, in particular, is a marketing trend that will snowball in 2011: Enterprise software vendors rarely ignore a hot industry trend which they can wrap around their existing products or services, whether it has actual merit or not (Exhibit A: Cloud Computing).

Right now, however, CIOs, CEOs and CFOs can be excused for their lack of enthusiasm for the Facebook-ization of ERP apps. To wit: Nightmarish visions of users enabling Facebook and Twitter connections to financial and other "sensitive" corporate data is not something that appeals to the higher ups. ("I just became the Mayor of our year-end financial results! Who wants to join me in looking at them?")

That hyperbolic scenario aside, there are many business benefits to adapting Enterprise 2.0 technologies to ERP business processes today (just ask Hayes Knight, Yum! Brands, Philips and Sony, to name a few companies).

A recent survey of 325 manufacturing executives asked these leaders whether they feel Web 2.0 technologies should be married to their ERP systems. (The survey was conducted by Affinity Research Solutions for ERP vendor IFS North America, so take the results with the requisite grain of salt.)

First off, why do the thoughts of manufacturing executives matter? I mean no offense to manufacturing execs, but their companies are typically laggards when it comes to leading-edge technology adoption, though they do love their ERP systems. (For instance, "Green Screen" terminals are still not considered legacy systems in some manufacturing facilities.) Therefore, what they have to say about Web 2.0 tools melding with ERP software is an insightful barometer on the trend.

Here's what these executives said, according to the survey results:

The ability to integrate with external social media tools on the Internet does not weigh heavily on the selection process for ERP. However, the adoption of social media functions to include collaborative and communication capabilities is viewed with importance but is not seen as a major influencer. There are two primary benefits of social functionality embedded in ERP: to streamline and communicate within the enterprise, and secondly to document business processes to support lean initiatives.
Manufacturing executives are optimistic about the potential benefits of social functionally embedded in ERP and realize that there could be great value if their ERP application includes features that mirror the functionality of online social networking tools. Increasing communication in the enterprise and the ability to capture the tacit knowledge of senior employees are the most frequently reported benefits.

So while I may chide the tech savvy of manufacturing execs, they clearly see value in how embedded Enterprise 2.0 tools can facilitate collaboration and communication among employees and partners using their ERP systems.

As to integrating ERP systems with external social-media sites, the execs were less enthused, according to the results.

To me, that shows the right frame of mind to be approaching the combination of social media and enterprise apps. As I wrote previously, today's companies should look—and look again—before they leap into "socializing" their corporate processes, applications and back-end systems.

The Facebook-ization of enterprise software appears unstoppable—whether you like it or not.

Thomas Wailgum covers Enterprise Software, Data Management and Personal Productivity Apps for CIO.com. Follow him on Twitter @twailgum. Follow everything from CIO.com on Twitter @CIOonline. E-mail Thomas at twailgum@cio.com.

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Copyright © 2010 IDG Communications, Inc.

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