Manufacturers Ambivalent About Benefits of Social Media

Jan. 8, 2010
Manufacturers are struggling with the question of whether "social media" applications have any value to their operations

Manufacturers are struggling with the question of whether "social media"—Internet-based applications such as FaceBook, Twitter and LinkedIn—have any value to their operations, and, if so, what it is and how to best secure that value, according to a survey released last month by enterprise systems vendor IFS.

The survey concludes that businesses are planning to use social media to keep abreast of their markets and communicate with customers, prospects and partners. However, most manufacturers have yet to recognize the benefits of integrating existing social networking applications with their enterprise system.

Roughly two-thirds (63%) of the executives surveyed see the opportunities and potential benefits of tying social networking applications such as Facebook and LinkedIn with their own enterprise solutions. The intentions in using the social networks as a business tool are to gain a fuller comprehension of the marketplace by understanding how their company is perceived, for researching the behaviors of customers and prospects, and acquiring intelligence on the competition.

Manufacturers also are exploring the integration of social media tools with enterprise systems as a way to capture the intellectual property that is disappearing with the large-scale retirement of Baby Boomers. According to the survey, many manufacturers believe enterprise applications may offer a solution. Two out of three (62%) see ERP technology as a way to accumulate and store knowledge, while 44% said they want ERP that is easier and faster for younger, technologically sophisticated employee to learn and use.

While questions relating to external social media site integration with ERP revealed marginal interest, executives surveyed apparently want their ERP solution to perform the functions of many social media tools. Moreover, they want ERP that is intuitive and usable for younger people, who spend their time outside of work steeped in social media. Social media make it easy for people to communicate and share what they know, while recording that exchange of ideas for others to benefit from. Blogs, wikis, threaded discussions and tools such as Twitter all create a stream of user-generated ideas and content that is searchable and can serve as a resource for others.

Company size has a great deal to do with how eagerly manufacturers are exploring the use of social media in their operations. Fifty-eight percent of surveyed companies with revenues over $1 billion say that exploring the integration of social media with ERP systems is very important. Only 30% of companies with revenues less than $250 million say the same thing.