Consumer-friendly social media tools are finally being integrated into complex ERP applications. Enhancing ERP with deep social media capabilities will allow for easy and fast communications between businesses and customers.
For companies of all kinds, this is a welcome evolutionary step, says industry analyst Kevin Prouty of Aberdeen Group. The biggest benefit is simple -- by building social media tools right into ERP applications, the data can be sorted and saved as structured data about business customers and used for future analysis. If a business is using independent social media tools such as Facebook, Twitter and LinkedIn, that information can't easily be collected and used in the future to help drive business strategies. That loss of data is an opportunity that's being squandered if it can't be used, Prouty says.
"I've been to several conferences over the last few months and at every single one, this was a topic from the vendors," Prouty says. "Yes, businesses can communicate with their customers today using Facebook or other social media platforms. But if you start pushing them on it and asking how they think they'll use the information they gather there, you usually get the reaction that it will be for unstructured communications with customers."
That's where ERP vendors are now working to fill in the gaps so those customer interactions can help businesses grow, he says. "What they're trying to do is to capture a lot of this unstructured communication which goes on between the customers and companies. So then you get all the traditional data from the ERP system but you also have captured the social media communications as well."
That's a useful mash-up that's being sought by many businesses today, he says, because business leaders are beginning to see the broad value of those interactions.
Prouty says there's another key reason for this trend -- the next generation of workers who will be using ERP apps for the first time will have deep social media experience because they are already using tools such as Facebook and Twitter in their personal lives.
"So user companies will need to have the tools in place for those new workers to be able to use them," which puts pressure on ERP vendors to add the required features, Prouty says. "I would say every ERP vendor feels that from a marketing standpoint they have to have some sort of built-in social media capabilities."
The first generations of ERP apps that include links to social media tools are arriving today, Prouty says, but the best is yet to come. "The second generation, which is probably a year or two off, will bring fully integrated social media capabilities, and that's where you're going to track and integrate all of that unstructured communications with all the related transactions that are going on."
That's not going to be a simple task, which is why it's still not here yet, he says. Capturing the information is easy, but sorting it, tagging it and giving it context for data collection is much harder to accomplish.
Vendors were working on something called global search prior to this and it will likely help them with this data cataloging, Prouty says. Global search is a transactional search that allows you to type in an order number or customer number and then you can see every related transaction. "That would help because if they can now associate all of those unstructured communications with those related numbers, they'll be able to tag the information with identifiers that can make it retrievable. If they can tie that together with the social media piece it will work."
There are ERP companies that have begun working on this but the development work continues, he says. Eventually you will be able to create structured data out of unstructured data, giving value to something that today isn't being harnessed.
Incorporating social media tools more closely with ERP is a natural extension for both types of applications, Prouty says. "So many junior employees today use social media for communications in their personal lives and I think that has to be a bigger part of their professional lives as well. These workers have these skills so you might as well take advantage of them."
Deeper integration of ERP and social media could even encourage more companies to delve into communicating with their customers through Facebook, Twitter and the rest, Prouty says. "Some companies today are hesitant to get involved with social media because it only produces unstructured data. But I think they're going to want to use social media once that information can be captured because it creates useful data for ERP or BI or other systems so you can gain more information for your business."
Eventually this kind of social media integration with ERP systems could also make its way into other enterprise applications such as CRM because it could give companies much more customer information for those systems, according to Prouty.
It's only a matter of time before the inclusion of these kinds of social media tools will be key desires among customers who are shopping for new ERP platforms, Prouty says. "I think it's something they need to watch. It's going to slowly work its way into selection criteria for ERP systems. The merger of social media and ERP will allow you to get much more from your data."
Todd R. Weiss covers Enterprise Applications, SaaS, CRM, and Cloud Computing for CIO.com. Follow Todd on Twitter @TechManTalking. Follow everything from CIO.com on Twitter @CIOonline and on Facebook. Email Todd at email@example.com You can also join Todd in the "CIO Forum" group on LinkedIn.com to talk with CIOs and IT managers about the things that keep them up at night.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.