FSN writer Lesley Meall looks into the benefits that social business tools can potentially deliver to the finance function.
Perhaps you are a fan of social media; perhaps not. Maybe you think this is immaterial, and in your personal life you may be right; but in business and in the finance function the potential benefits of social media are becoming ever more apparent. Don’t worry; I’m not about to suggest that every CFO and FD and financial controller should be tweeting and getting into professional discussions on LinkedIn. Most of the time you probably have more pressing matters to deal with – though you should definitely be a member of the Financial Systems News LinkedIn group and be following FSN_writer (me) and FSN_editor (Gary Simon) on Twitter. But I digress.
Social media tools are, increasingly, being integrated into the complex world of ERP applications, providing new ways for finance to collaborate with its ‘customers’ in other parts of the enterprise and outside it. FinancialForce.com blazed something of a trail back in 2010 when it integrated its accounting software with Chatter the SalesForce.com social network for business and introduced Chatterbox, which creates Chatter streams and uses alerts based on user-defined criteria. But as Kevin Prouty, an Aberdeen group analyst observes, ‘every ERP vendor now feels that they have to have some sort of built-in social media capabilities,’ if only from a marketing standpoint.
Beyond the marketing hype, lurk some good reasons for adding social capabilities to accounting systems. Key benefits for the finance function include:
- Removing barriers to communication;
- Helping finance to consolidate its position as a trusted adviser to the business;
- Reducing push reporting and creating more time for higher value work;
- Minimising costly mistakes;
- Improving ambient awareness of the rest of the business and functions.
‘Bringing together an accounting system and a social interface can seem like an unlikely pairing, however one of the biggest challenges to finance professionals is the accessibility and transparency of data,’ says Claire Carter, marketing director at m-hance, a reseller of Microsoft Dynamics GP, Dynamics CRM and Dynamics AX solutions that has developed a Social Business tool (MSB) that integrates with them. Like Chatterbox and FinancialForce before it, MSB aims to combine the best parts of social user interaction (the ability to post, comment and like activity streams) within a business context – improving the exchange of information and productivity.
One of the features of social business tools such as these and others (see below) is their use of streams to deliver user-defined alerts. ‘Feeds of information such as sales order purchase documents on hold, customers approaching their credit limit, and receivable transactions over due date can appear to selected groups of people,’ explains Carter. Improving collaboration for ERP users can have other benefits too, such as speeding up month end processes by making it easier to gather the required information, and making accounts payable and accounts receivable issues easier to resolve by helping finance to work more closely with sales and operations.
Other social business tools that finance can potentially exploit to improve collaboration and make better use of the information stored in ERP systems (and other software applications and business processes) include IBM Connections, Infor 10 ION Workspace, and SAP StreamWork – to name but a few. ‘Social software is gaining in momentum in the enterprise,’ reports Michael Fauscette, group VP for the IDC Software Business Solutions Group, adding: ‘Companies are seeing significant gain in productivity and increasing value from successfully deployed social software solutions including supporting ad hoc work by bringing people, data, content, and systems together in real time and making more effective critical business decisions by providing the 'right information' in the work context.’
So much so, that when IDC company recently asked ‘global manufacturing leaders’ about the major limitations of their current ERP systems, almost 50 per cent cited lack of support for collaboration and social networking capabilities. Maybe they appreciate their potential to enhance decision making and productivity – or maybe they’d seen figures like the ones that m-hance has for ROI on enterprise social networking (ESN) tools. ‘On average, ESN tools show an increase in productivity of around 2 per cent per user,’ reports Carter. At first glance, it may not seem like much, but if you take the average cost of an employee to be £35k the potential gains ramp up along with user numbers. You can do the maths.