Social media mania is having a huge impact on traditional business applications. Companies that are leveraging this trend are seeing significant benefits, including collaboration and data sharing in ways they've not experienced before.
Adding social media extensions to applications like enterprise resource planning (ERP), customer relationship management (CRM), business intelligence (BI) and supply chain management (SCM) makes it possible for companies to share business insights generated by these apps.
In general, social data can be used to enhance a variety of other sources, says Mary Wardley, program vice president of CRM and enterprise applications at research firm IDC in Framingham, Mass.
What you need to know about connecting social media with enterprise apps:
- Results can be impressive. Implementers report increased sales, more effective lead generation, better communications between customers and salespeople, and more efficient problem resolution.
- The best of both worlds. Think of a Facebook-like interface that lets employees access data and other information residing in enterprise apps.
- Cultural issues. Employees new to the world of social media may need extra help getting used to the social way of doing things; training is your friend.
- Most important decision. You'll need to figure out pretty quickly whether to go with a pre-packaged linkup -- the kind that most vendors offer that connect Social Network X to Enterprise App Y -- or whether to roll-your-own and mix and match multiple social media platforms with your ERP, CRM or other systems.
Customer-related and product-related data from social platforms are "another piece of the puzzle that can be mined to understand" customer preferences and product enhancements, as well as inform other decisions, Wardley says. Listening to what customers say among their friends helps companies really understand their true likes and dislikes, she says.
There are several good scenarios where integrating social media and enterprise apps have shown significant promise, says Dion Hinchcliffe, chief strategy officer at social media technology firm Dachis Group in Austin, Texas, and an expert on social strategies.
The first is in CRM, where organizations have begun correlating social media conversations with customer activities, "looking for sales and [customer] retention opportunities," Hinchcliffe says. The second is in the supply chain, particularly around exception handling -- what a business does when something unexpected happens -- which he calls "one of the most sensitive and important areas of ERP in many companies." When something in the supply chain goes wrong, that information, as well as possible solutions, must be made available to people who can address it, he says.
Combining the highly structured world of enterprise apps -- in terms of how work is done -- with the less structured environment of social media makes sense for many types of business interactions, says Rob Koplowitz, vice president and principal analyst at Forrester Research in Cambridge, Mass.
When processes become more ad hoc -- for, say, when customers need support -- "a lot of that stuff needs to be outside of core systems," Koplowitz says. "The ad-hoc processes live outside of core systems because they execute in places like email that were never designed for tight integration," he explains.
Enterprise social tools "are very good at capturing these human-centric interactions and also are designed from the ground up with integration in mind," Koplowitz says, so the idea of making these applications social is "pretty compelling."
Several vendors are addressing this market, including enterprise application providers that have added social networking capabilities directly into their applications or are offering the social software in combination with the apps, Koplowitz says. Vendors include Salesforce.com, Oracle, SAP, Microsoft and IBM.
Better sales results
About two years ago, the Nebraska Book, a Nebraskan company that buys used textbooks from college students and resells them to college bookstores, began using SAP's Customer on Demand, a cloud-based offering that integrates a social media-type application with ERP and CRM.
Nebraska Book wanted to increase collaboration among its sales representatives so they could more quickly and easily find information about customers, says Michael Kelly, senior vice president.
In addition to the SAP enterprise apps, Nebraska Book uses a BI application from SAS running in a Windows environment and mobile BI software from Microstrategy, and is making those available to the sales team via Customer on Demand, Kelly says.
What it all brings, he says, is "the look and feel of a Facebook-like user interface for communications and access to the data provided by the statistical and BI applications."
"The goal was to take all that information ... and give it to [employees] as soon as they log onto an iPad," Kelly says. "To use a Facebook term, it's all posted on their wall." Before, sales reps needed to go to four different places to get the information they needed, he explains.
Sales reps can now visit a customer and quickly get a single-screen view of all the business Nebraska Book has done with that customer, as well as customer preferences, issues that have come up in the past and other information.
Becoming more agile about gathering and sharing customer information has become crucial in a market that's been transformed over the past few years, Kelly says. "This industry used to be really simple; people would buy and sell textbooks" via traditional retailers either at bookstores or online, he says.
Then Amazon.com gave students the ability to sell books among themselves, and "our market went down considerably," Kelly says. Four years ago, traditional book suppliers such as Nebraska Book had about 78% of the market, Kelly says. Then Amazon began to take market share away and the traditional industry now owns only about 46% of the market, he says.
To compete, Kelly says, "we had to get better at giving bookstores information to help them get better" at serving their own customers.
With the new apps, Kelly's sales reps have more information about trends, "so we can help bookstores provide more choices at lower prices for their student base. We are trying to help bookstores compete in this changing market."
The plan seems to be working. For the past two years Nebraska Book has had record revenue. "I don't credit all of that to the technology, but most of it," Kelly says.
Performance of the sales team has improved considerably, Kelly says. Two years ago the company gave out sales awards -- based on growth within sales territory -- to three people. "This past year 28 of 28 reps qualified for the award," Kelly says.
In addition, Kelly can better keep track of how reps are doing. "I friend [within the Customer on Demand environment] our top 20 accounts, so if anyone says anything about those accounts I can see that on my iPad," he says. "I can set up different types of tags so I can view region by region and look at the top prospects."
The only significant challenge the company faced with implementing social technology was getting some people to embrace the change. "We have people who have been with the company for 25 years in the same job, and the challenge was getting them to understand the benefits" of social networking, Kelly says. "So we implemented it slowly, and I said, 'everyone has to use this.'"
Those who were resistant at first were more willing to use the technology when they saw the success others were having, Kelly says.
More effective lead generation
Also tying social media into CRM is Zimmer, an Indiana supplier of orthopedic devices. The company since 2011 has used Salesforce.com's Radian6 social media monitoring application to monitor conversations on Facebook and Twitter that relate to the products Zimmer offers, and also to participate in conversations about its brand.
Radian6 provides a way for the company to determine how aware people are of its brand, says Line Berg-Ostergaard, associate director of interactive communications at Zimmer.
The company is also using Salesforce.com's Chatter social media tool with the vendor's CRM platform to enable customer lead generation and to connect its 8,000 employees and management team to its distributor partners.
Lead generation is more effective now, says Don Lamping, associate director of sales/service programs. "We now have the ability to collaborate [among employees and partners and] follow all lead and opportunity records," he says. "Consumer leads are fed from Radian6 into our CRM contact database."
Another key focus for Chatter was "the ability to provide group collaboration around our product marketing functions and events such as national sales training," Lamping says.
Among the biggest benefits of using social media are increased and more effective collaboration, a more transparent organization and better cross-division and cross-geography interaction, Lamping says.
"Before we were socially engaged, we used voicemail and email" to collaborate within the company, Lamping says. But that had limitations because people often took a long time to respond to communications, or messages were forwarded to multiple people before reaching the most appropriate person. Chatter tends to generate more real-time response to queries because many people can view requests or updates as they are posted, he says.
Zimmer has created 75 user groups within Chatter, and since launching the product has seen steady growth in use of the social media tool.
Social triggers ERP actions
Energy Alloys, a Houston-based provider of oilfield metals to global oil and gas manufacturers and service companies, began using Appian's business process management (BPS) software as its social media application in December 2012.
The company recently deployed Appian Cloud to modernize its JD Edwards ERP system with Appian's social interface. When certain actions occur in the ERP system, Appian automatically triggers other actions in an interconnected ERP system operated by the appropriate Energy Alloy customer.
"We have Appian collaborate between a request for product in the ERP side from our customer, [as well as for] order fulfillment using business rules, workflow techniques and dashboards," says Kaushik Ray, director of the BPM Applications Group at Energy Alloys.
Appian looks for potential demand in the customer's system, validating data between the two ERP systems, running business rules to determine where there are exceptions and deviations from corporate policy and determining who needs to take decisions on each, Ray explains.
Once the demand is identified, Appian lets sales people know about the new demand and waits for them to acknowledge the demand, and sends an electronic acknowledgement back to the customer, Ray adds.
When issues arise, employees from both Energy Alloys and its customer get together on the Appian Tempo social collaboration tool to discuss the specific issue, look at data from both ERP systems and make corrective actions, Ray says.
This information is available on employees' desktops as well as on their iPhones via the Appian application, where they can respond to a task assigned to them, review status of product orders, prices, delivery times or shortage issues.
The key business drivers for using social media with ERP were to reduce the cost of processing transactions and improve response times from when customers make requests to when those orders are delivered or questions are answered. In addition, the company wanted to reduce the cost of carrying inventory and gain greater visibility of the status of transactions and increased accountability on the part of Energy Alloys and its customers, Ray says.
The company is already seeing benefits such as enhanced inventory accuracy, a 90% reduction in lead times in some cases, zero invoice errors, cost savings on logistics due to 100% accuracy of product deliveries, reduced inventory costs and improved accuracy in areas such as product pricing and delivery times. "Inventory-carrying cost is the least it's been in years," Ray says.
For organizations just getting into social media, one important decision will be determining whether to use multiple social platforms with enterprise applications or to standardize on a single social platform, Forrester's Koplowitz says.
"This is where it gets complicated," he says. A specific social-media platform is paired with the enterprise application it's sold with. "Do I want four or five of these? Do I want all these stovepipes, or do I buy [Salesforce.com's] Chatter and everything has to snap to that? [This year] will be an interesting year to see which leaders emerge in this space."
Of course, enterprises can opt to mix-and-match various social platforms and corporate applications, but there are no guarantees of integration. Customers would have to roll their own.
Another challenge is getting consistency in messaging across channels. Many companies have multiple social media platforms to reach different types of customers, IDC's Wardley says. "In marketing, it is not uncommon to have multiple fan pages or brand-related pages in Facebook. In addition, multiple brands can be using a variety of handles in the various social networks."
The addition of social also opens questions about privacy, governance, risk and compliance. "For industries in which these are particularly an issue, such as any highly regulated industry -- government, financial services -- there need to be safeguards and clear rules of engagement," Wardley says.
Research from IDC shows that enterprise social software adoption has "accelerated significantly," finding use cases across almost all industries as it continues to become a critical decision-support and worker productivity tool. Companies are turning to social software in growing numbers as they look for ways to increase collaboration and worker productivity and efficiently manage growing volumes of information, IDC says.
Gartner agrees. In a report released in January 2013, Gartner predicted that by 2016, 50% of large organizations will have internal Facebook-like social networks, and 30% of these will be considered as essential as email and telephones are today.
Several trends across vertical sectors have emerged, reports London-based research firm Ovum. The retail, hospitality, transportation and technology industries have become early adopters of using social media as a customer service channel and are using it pervasively.
Not all companies are adopting social as quickly, however.
According to an October 2012 Ovum report, a number of CEOs and senior executives "fail to see how social media adds value to their overall strategy, and are reluctant to invest internally or externally in the concept."
But that's a mistake, the consultancy maintains. If enterprise leaders don't become more receptive to leveraging social media, "they are going to fall behind and pay the price," the Ovum report says. Business and IT executives must develop a strategy in this area or risk missing opportunities to reach customers and access strategic information.
Social media links with enterprise apps has given companies such as Nebraska Book "the ability to put valuable information into the hands of our sales force more quickly," and "in a social media format they use every day," Kelly says. "This gives them more time to sell our services rather than spend their time gathering information."