Social Media and the ERP

by Tom Carroll

Over at gapingvoid Hugh MacLeod posts about a set of questions he received from a friend about social media. I found all the questions and responses interesting. The one one question and response that stood out was #10:

10. Additional Comments?

One more thought, which pertains directly to your client. I firmly believe that the line that separates social media and ERP is going to start getting VERY blurry, and really soon. I can see a not-to-distant future where even the larger ERP solutions are built around social software, not the other way around. And I can see that day arriving in under five years. We live in interesting times.

Sorry, Hugh but I think your are a bit off on this one. Sure ERP vendors will start offering social software as part of their solutions in the next 5 years. But think about from the view point of the folks in the market for ERP solutions. That group of people have driven large ERP vendors to provide guarantees that versions of their ERP solutions will be viable for at least 5 years. The market requires ERP vendors provide these guarantees due to significant costs of major upgrades. So, the adoption cycle for existing customers will drive the adoption of radically different ERP solutions beyond your 5 year horizon. Now I agree that the principles and techniques that have driven the adoption of social software in the consumer market will be adopted over time in enterprises of all sizes.

The reality is that enterprises today are just now getting platforms that enable them to realize visions of Michael Hammer and the like. ERP solutions are complex animals that could never be built around social software. What I believe is that social software coupled with process re-engineering will create huge efficiencies and value for enterprises. All this is dependent on a well abstracted ERP platform, in simple terms it will be all about services (API). Social software has a long way to go before dealing with things like GAAP, complex logistics, Financial reporting, transactional integrity, inventory management, production planning, global regulation, process execution, the list goes on and on. I believe social software has the power to make all these things more efficient and effective.

ERP platforms will remain the core of enterprises for years to come. The smart enterprises and vendors will have ERPs with comprehensive and integrated social software. ERPs will become like utility services doing very complex and important things, social software will create information liquidity, efficiency and transparency within and across business processes.