Social networking revolution on manufacturers' radars

Survey finds a majority of executives with manufacturing systems see value in social media -- and for reasons beyond enhancing communication and collaboration.
Written by Joe McKendrick, Contributing Writer

Call it the final frontier of social networking in the enterprise -- those large, complex, behemoth enterprise resource planning (ERP) systems, designed to control and report on the flow of money and materials across production and supply chains.

Will Enterprise 2.0 -- defined as the constellation of services, from social networking to blogs and wikis -- begun to shape the way corporate end users interact with these systems?  Possibly so, a new survey says -- but not for the reasons you may think.

Yes, Enterprise 2.0 and social networking are great emerging channels for engaging with customers and helping employees collaborate better. But for ERP systems, which are large and complex environments, social networking offers a way to capture and digitize institutional knowledge and expertise. With large complex ERP environments, there's a lot of knowledge that is kept in peoples' heads -- knowledge that walks out the door upon other job offers or retirement.

In a new survey of 325 manufacturing executives, six out of ten see the potential for social networking to enhance the capabilities of their ERP systems. One out of four said they want to see social networking capabilities built right into their ERP systems, and a lesser number, 12 percent, see potential for integration with existing social media tools.

These observations were confirmed the survey, commissioned by IFS North America. I recently had the opportunity to speak with Chuck Rathmann, IFS industry analyst, about the results, which are soon scheduled for release.

The jury is out as to the direct value of social media -- at least as its practiced today -- in big enterprise application settings. "We wondered to what extent people actually want their ERP to actually be integrated with social media tools," says Rathmann. "That hasn't been too much of a hot ticket. Unless you're dealing with consumer product technologies or retailers, its hard to see where you could get real enterprise value from this. You're really talking about a CRM initiative, where people are talking about your company, and you want to be able to track what it is they're saying. But exactly how that relates the enterprise environment and your general ledger and your supply chain and all these different things, it remains to be seen."

What executives seem to want, Rathmann says, is to have the ERP software itself "enable the type of communication and collaboration that we see in a social network type of setting." Just build it into the system itself.

The survey finds that the greatest anticipated value in social media in ERP environments stems primarily from increased communication and the capture of tacit knowledge of senior employees.

In addition, more than two out of five executives see potential for employing social media tools to capture the knowledge of retiring employees. A social media-enabled enterprise application can help address issue with a shrinking workforce, Rathmann explains. "They said they really need their enterprise application to help them capture and retain the tacit knowledge of their senior employees."

This post was originally published on Smartplanet.com

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