Adding Collaboration tools to ERP systems

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D

IPARTIMENTO DI

DEL

SINTESI

LAUREA

Adding Collaboration tools to ERP systems

RELATORI

Prof. Ing. Riccardo Dulmin

Dipartimento di Ingegneria dell’Energia dei Sistemi, del Territorio e delle Costruzioni.

Prof. Ing. Davide Aloini

IPARTIMENTO DI

I

NGEGNERIA DELL

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NERGIA DEI

S

DEL

T

ERRITORIO E DELLE

C

OSTRUZIONI

SINTESI

PER IL CONSEGUIMENTO DELLA

LAUREA MAGISTRALE IN INGEGNERIA GESTIONALE

ollaboration tools to ERP systems

State of the Art.

Sessione di Laurea del 30/04/2014 Anno Accademico 2012/2013

alespagnesi@gmail.com

S

ISTEMI

,

NGEGNERIA GESTIONALE

ollaboration tools to ERP systems:

IL CANDIDATO

Alessandro Spagnesi alespagnesi@gmail.com

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Adding Collaboration tools to ERP systems: State of the Art.

Alessandro Spagnesi

Sommario

Negli ultimi anni, i sistemi ERP stanno rivolgendo la loro attenzione alla collaborazione (ERPII) ed, in contemporanea, nelle aziende si assiste ad un incremento di utilizzo di soluzioni di Enterprise Social Network (ESN). I sistemi ERP risultano complessi e scarsamente user-friendly, mentre le ESN tendono ad essere abbandonate se non legate al core business aziendale. Mirando a semplificare l’utilizzo dei sistemi ERP da parte degli utenti, alcuni attori del mercato hanno deciso di rivolgere la propria attenzione all’integrazione delle funzionalità social all’interno dei gestionali ERP.

L’obiettivo generale del lavoro di tesi è quello di analizzare il fenomeno dell’integrazione tra strumenti social e sistemi ERP, considerando due punti di vista, quello accademico e quello del mercato. Questa analisi di valore ambivalente riveste un ruolo importante per ottenere una visione a 360° dell’argomento studiato. In questa tesi sono presentati lo stato dell’arte della ricerca accademica, i benefici attesi e gli ostacoli dell’integrazione, un framework sull’integrazione tra social, ERP e contesto aziendale, la nascita potenziale del mercato di Social Enterprise, la visione di casi di studio ed esempi applicativi, i benefici e gli ostacoli reali estrapolati dalle prime implementazioni. I risultati ottenuti dalle varie analisi sull’argomento principale, verranno infine discussi.

Abstract

In recent years, ERP systems are moving towards collaboration (ERP II) and at the same time it’s growing use of Enterprise Social Network (ESN) in the companies. ERP systems have the issue of being very complex, while the ESN platforms tend to be abandoned if they are not related to the core business. Some members of the market have decided to bring their attention to the integration of social tools into ERP systems aiming to simplify the use of ERP systems by users .

The overall objective of the thesis work is to analyze the phenomenon of integration between social tools and ERP systems, from academic and market point of view. The use of double path was an important choice to get a 360 degree view of the topic studied. In this thesis we have presented the state of the art of academic research, the expected benefits and obstacles to integration, the possible obstacles to integration, a framework on the integration of social tools, ERP and business context, the potential creation of Social Enterprise market, the vision of case studies and practical examples, the real benefits and the real obstacles extrapolated from the first implementations. The results obtained from different analyzes on the main topic will be finally discussed.

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1 INTRODUCTION, BACKGROUND AND MOTIVATION

In recent years in the world has developed the use of social networks. The companies themselves have started to use the Enterprise Social Network (ESN), thus trying to enter in the business world the ease of communication linked to the functionality of Web 2.0.

The integration of social tools and ERP systems is very recent and it is being drafted, so we tried to have a wider vision possible. Our job has started from the core problem, and then it has been split on two parallel paths, academic research and market; the two paths will be joined for the final conclusions.

The reasons that have led us to explore the two fields are the followings: the topic treated is new and under development; in the field of ICT is often the market to drive the research, developing new solutions compared to those designed by the researchers; evaluate if the proposed solutions from academic research are already available on the market.

1.1 THESIS OBJECTIVE

The intent of this thesis is to analyze the integration of social tools and ERP from the academic and the market point of view. Our thesis tries to give answers to the following key questions: state of art of academic research in the field of social ERP; expected benefits from the integration of social tools according to the researchers; possible obstacles to the integration according to the researchers; propose an explanatory framework for the evaluation of the integration of social, ERP and business context; current state of the market; presence of integrated solutions between ESN and ERP on the market; evaluation of real cases and examples to evaluate the effective benefits and the presence of obstacles; final evaluation of the central topic.

1.2 OVERVIEW

As explained in the framework (Fig.1) this thesis is divided into 3 section:

• Section1: we explain the motivations of our work, the questions that we’re trying to give answers and we show the history of the evolution of ERP systems and products of the major software house on the market;

• Section2: in this section we have performed the literature review to know the state of the art of academic research, the expected benefits and obstacles to integration. Afterwards, we have Fig. 1 – Thesis structure

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created an explanatory framework of the integration between social, ERP and business context. In vendor step we have carried out a market analysis and we have analyzed two solutions, specifically SAP JAM and Infor10X. We have searched some application examples and case studies. We propose a framework on the situation of market vendor solutions;

• Section3: in this section we present the main evidence and the conclusions on the integration of social tools into ERP systems.

2 ACADEMIC RESEARCH ANALYSIS

We collected, explored and analyzed a number of articles discussing Social collaboration platform integrated in ERP systems or modules composed ERP. The main purposes of the literature analysis are: review and analysis article of Social tools and management systems; assessment the current state of academic research; discovery of expected benefits of integration; discovery of possible obstacles of the integration; creation an explanatory framework of the relationship between social tools, ERP and business context.

2.1 RESEARCH RULES

The first step was to set the following search method: research about only published literature; consider documents having more than two pages; use scientific databases for research documents (IEEE-Xplore; ScienceDirect; Springer; AISeL; Emerald); keep articles that deal with social tools or application that are available in the company (ex. Social platform support); delete documents that related to the use of social networks in the company (ex. Facebook, Twitter, Linkedin).

Research is composed in four different Section:

• Data collection: in this section we have focused on the research of documents; • Data analysis: in this section a citation analysis using the software "Nvivo10" which

allowed us to freeze the documents of our research is carried out. Then we made a detailed analysis of the texts;

• Evidence: in this section we have listed and described the results of the analysis phase, we have: catalogued the papers, listed new capabilities of integrated ERP and listed the main evidence about integration of social tools and ERP;

• Output: in this section we have provided the following output: summary framework of research, expected benefits, possible obstacles, a chart on the cover of the processes through social collaboration and we have finally done an explanatory framework of integration between social collaboration, ERP and business context.

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2.2 DATA COLLECTION

The search for papers is carried out in 3 phases: the first aims to search those documents which focus on integrating social ERP; due to the lack of material, we decided to expand the research to those management software that make up an extended ERP. We have eventually used the Publish or Perish software to perform a literature search of the authors, to try to expand our database.

2.3 DATA ANALYSIS

In this section, we have done a citation analysis of documents in "freezing phase". The analysis has been performed using the software "Nvivo10". The first results obtained by the citation analysis is to give a definitive structure to the papers database (Tab.1).

MODULES

ERP BPM CRM SCM HRM R&D FIN. H.I. TOT ABSTRACT >=100 >=100 >=100 [40:60] <=20 [20:40] <=10 [40:60] ~500

EVALUATED 34 19 28 8 5 8 3 16 121

FROZEN 11 12 7 2 1 1 0 4 38

Tab. 1 – Documents research overview

The citation analysis and re-reading of the key points of the documents has enabled us to set the two next steps.

2.4 EVIDENCE

In this area, we are going to describe the evidence from our academic research. After dividing the documents by type (theoretical, empirical model, empirical case study) and listed the new features of the integrated solution, we extrapolated the highlights of the first part of the analysis: the basis for a possible integration between social tools and ERP is to move from a process-centric vision to an user-centric vision; systems are easier to use thanks to user-centric architecture; it’s important to use a platform inspired by the style of the various social networks on the web; not all ERP functionality are easy to coverage through social tools and so we have to make a choice between flexibility (social tools) and stiffness (ERP); there is a risk of data loss and lack of respect for privacy.

2.5 OUTPUT

In this sector we have developed: a study of the expected benefits and obstacles, a graphic on the concept of social coverage of business processes and at last an explanatory framework of the integration between social, management systems and corporate context. The creation of the output depends on the search path and for that reason we have created a summary framework of academic research (Fig.2).

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Fig. 2 – Summary framework of academic research 2.5.1 Benefits

The new capabilities can bring benefits in the field of activities managed by the ERP. The benefits are found by grouping in homogeneous clusters the references previously found with the citation analysis, then we re-analyzed the documents to outline the following benefits:

IMPROVE CONTROL AND STORAGE OF DATA, IMPROVE CUSTOMER EXPERIENCE, IMPROVE EASE OF USE OF EMPLOYEES, IMPROVE ENTERPRISE AGILITY AND INNOVATION, IMPROVE EXTERNAL COLLABORATION, IMPROVE EXTERNAL COMMUNICATION, IMPROVE INTERNAL COLLABORATION, IMPROVE INTERNAL COMMUNICATION, IMPROVE KNOWLEDGE AND INFORMATION CAPTURE, IMPROVE PRODUCTIVITY OF EMPLOYEES, IMPROVE UNDERSTANDING OF THE MARKET, REDUCE CUSTOMER RELATED COSTS, REDUCE OPERATIONAL COSTS, SAVING TIME. As we can see in the picture (Fig.3) a key to create an integration between social and ERP is to place at the centre the social collaboration and outside the management software part.

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2.5.2 Obstacles

The work methodology used for the analysis of obstacles has usually been used for the analysis of the benefits previously explained. The main obstacles we have found are: DATA SECURITY, DIFFERENT ARCHITECTURE AND LANGUAGE INTEGRATION, OVERESTIMATION OF FINANCIAL BENEFITS, PRIVACY RESPECT, RELATIONSHIP BETWEEN DATA QUALITY AND QUANTITY, RESISTANCE TO INTERNAL CHANGE.

The presence of barriers to integration puts new challenges to be overcome in order to create an efficient and effective social collaboration in the company. There are four main challenges that a company must win in order to overcome the obstacles found: break away from the classical process-centric architecture; explain to employees the importance of innovation; finding ways to ensure flexibility in the exchange of data and information but at the same time ensure the security of data and privacy of the users; find performance of collaborative processes index.

2.5.3 Crossing-Structuring graph

Not all processes achieve a real benefit from the use of social collaboration, so we tried to find out which are the processes related to social collaboration. Starting from the processes in the Porter value chain, we have created a chart which represents the above processes on the basis of crossing and structuring.

• X-axis: Structuring: types of decisions taken to carry out processes (structured, semi-structured, unstructured);

• Y-axis: Crossing:

involvement of different types of actors in and outside the company.

We believe that the processes closer to the red zone are the ones that get the greatest benefits by the inclusion of social collaboration tools.

2.5.4 Framework

We have created a framework that tries to show the relationship between social collaboration and company context coming out from the analysis of academic texts. As we

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can see in the picture (Fig.5), a company using an ERP system has basically 4 items to integrate: The management modules of the ERP system; People; Processes; Documents.

The social collaboration connects the four objects for the following reasons: through the social platform, we should be able to follow all processes in the Porter’s chain, the ERP or the module used in the company produces structured data and documents useful to the company, the documents are tracked, stored, and made available, and people have to keep in touch; for the reasons above, we have placed the social collaboration in the centre of the chart.

In our framework we have included, according to our research, the expected benefits and obstacles that social/ERP integration can bring.

2.6 RESEARCH ANALYSIS OUTLINE

After data collection, data analysis, data evidence and research output, we can affirm that: the academic research is currently in progress; to proceed effectively and efficiently with the integration process the first step to take is to try to transform the architecture from process-centric to user-process-centric; collaboration is the main point and we need to put the social collaboration platform in the centre; not all processes have to be covered by the social features, processes that can benefit from social collaboration are the ones in the red zone of the graph in Fig.4; knowledge management in today's world has become critical, the social collaboration helps the company to track the various conversations and documents in the portal; the financial benefits from the introduction of social collaboration cannot yet be estimated precisely because it is difficult to find KPIs that indicate with precision the various economic benefits of the collaborative process, so that there is a high risk of overestimating the financial benefits; to overcome the internal resistance, the company must take Fig. 5 - Framework about integration between social tools, ERP and business context

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advantage of the employees of the Net-generation. Probably the social collaboration will change the way people work in the coming years.

3 VENDOR MARKET ANALYSIS

The questions that we are trying to answer are the followings: what is the situation of the market?; what are the best solutions on the market?; are there real benefits to implement specific solutions?; are there obstacles in the integration of various facets of the project?; is it possible to integrate the key components of a company?

To find answers, we analyzed the integration of social tools and ERP systems from the market point of view, trying to find integrated solutions already on the market.

3.1 MARKET ANALYSIS

Analyzing the situation of the two markets (ERP and ESN) by IDC, Frost & Sullivan and NUCLEUS reports, we have tried to answer the question about the current and future situation of the market. The ICT market is declining, but the Business Intelligence market has a growth of around 20%. The investments in ERP are increasing by 35% per annum. The IDC research has highlighted the problem of the complexity of enterprise IT and then management solutions have to find ways to simplify these technologies.

The members of the Net-generation are entering the companies and the ESN market registered a growth of 27% in 2013.

According to Frost & Sullivan, the main problem in the implementation of these technologies is the difficulty in binding to the core business of the company. For the previous reasons, we can say that the current social ERP solutions market is immature, but in the coming years it will be on the rise. In the future, we will quit the idea of an ERP and a social collaboration platform and we will consider SOCIAL ENTERPRISE solutions.

3.2 PRODUCT ANALYSIS

We have evaluated two product solutions integrated in social management systems, to find the benefits and obstacles expressed from the actual use. Through our research, we try to evaluate, if possible, the architecture behind integration. We have described and analyzed two solutions, SAP JAM and Infor 10X because:

• Infor 10X is the only one (at the time of the research) which has a complete integration of the collaboration platform with the company's ERP. On internet there are case studies and we can get in touch with Infor Italy or Infor partner for more information and case studies;

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• SAP JAM is integrated with CRM and HRM, so there could be an opportunity to study different cases and to have the chance for having direct contacts with suppliers of SAP solution;

The two solutions are described and analyzed: at the end of the description of each solution, we have fulfilled the following table (Tab.2) to homogenize the comparison.

PROCESS PRODUCT INTEGRATION MODULES SOCIAL TOOLS PEOPLE BENEFITS Activities of the Porter’s value chain Name of the product ERP integration module present in the solution offered by vendors Name and social tools of the solution People connected Expected benefits

Tab. 2 – Solution summary table

After having completed tables, we have created another table (Tab.3) that summarizes what management modules the solutions are able to integrate.

Considering the research carried out and the analysis which has been made, we can say that, at present, the best solution on the market is Infor 10X. 3.3 EXAMPLES AND CASE STUDIES

During the analysis of a topic, examples or case studies could help to understand it better. The choice of the cases and examples is critical, but in our case the choice has almost been obliged. We have moved from the beginning with awareness of difficulties to find more contacts as possible: we contacted two SAP partners, an Infor partner, Infor Italy and we have done an internet research over the world.

The research results of the contacts are the followings: 3 application examples of Infor Ming.le into Infor ERP solutions; 1 explanatory example of SAP ERP system used with the Yammer social platform; 2 case studies of implementations of Infor 10X (Preferred sands and Johnstone supply) in 2013; 2 case studies of implementation project of Infor 10X in early 2014 (DAB and Boskalis).

3.4 VENDOR MARKET OUTLINE

The context of the market and of the solutions on the market is quite complicated. The

OVERVIEW INTEGRATION SOCIAL/ERP MODULES SAP JAM INFOR 10X

ERP X BPM X CRM X X HRM X X SCM X R&D X FINANCE X X

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Through the study of solutions, application examples and case studies, we have found the following benefits: possibility to achieve increases in revenue; flexibility in order management; ability to manage plant maintenance at several locations within budget; quickly management of emergencies; knowledge of the status of the core business processes in real time; ability to manage business information in real time; chance to facilitate productive discussions between members of the company; reduction of activity time and paperwork; relationship with suppliers is closer but flexible at the same time; exchange of information between different retailers can provide job opportunities or facilitate positive situations for the company.

As already done in the field of academic research, we have not only analyzed papers and extrapolated data and information, but we have tried to rework them to create our output. We have modified the framework of Fig.5 using the information of the vendor analysis; the resulting framework is the follow:

As we have seen in the study of the market, the current market offers a single solution integrated with the ERP system; for this in the framework (Fig.6) the circle "Modules" is in red. The study of the products and the exchange of information with partners of SAP and Infor has indicated some problems about documental section management by product solutions. This kind of problems has not been carried out from the academic research.

Regarding people side, the use of social collaboration platform allows us to connect the internal and external members to the company, so the circle "People" is green. Process management obtains benefits from the integration between business and social. Considering examined solutions, it is possible to know in real-time the status of production, warehouse and orders.

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4 CONCLUSIONS: HIGHLIGHTS AND FUTURE

In conclusion, through our analysis and evaluations, we are able to explain the key points and hypotheses about the future use of social tools within ERP solutions.

The academic research is in progress, we have seen a progressive increase in the last years of production. The integrated solutions between social and ERP are so few and the market is totally immature. The ERP systems vendors have understood the importance of social collaboration and big vendors are preparing to attack the social tools, but currently only Infor has placed on the market a release, while other vendors are waiting for the second half of 2014 to finally get off the field because currently social capabilities don’t move customers. Great part of vendors are still stuck on a classical process centric architecture while Infor10X is going towards a user-centric architecture but this way is still hard. In the future we will talk about social enterprise. Digital Natives or Net-generation are a key factors that can accelerate the process of integration between social tools and ERP.

Main benefits coming from the integration are: time savings; improvement on communication and collaboration outside and inside the company; improvement on ease of use and productivity of employees; growth of flexibility order management; ability to manage business information in real time; ability to trace the corporate knowledge, especially informal data coming from posts, videos and conversations; ability to read faster the market.

As for all possible innovations, there are some obstacles to the integration of social tools and ERP: internal resistance; respect of users’ privacy; management of the relationship between social platform and documental section; difficulty in finding the suitable architecture for a homogeneous integration between ERP and social tools;

During the academic research we have read a paper where social collaboration is considered to be one of the seven technologies capable to improve the future of business. We tried to list some key points that make us believe that our work and the "Social ERP" have a future. Enterprise market is immature but is growing fast. According to market players, the integration between social tools and ERP will follow the path of cloud technology. The future of "Social ERP" depends on finding an architecture that allows total integration between social tools and ERP tools. A solution, proposed by the Italian company Altea, is a scalable and parametric architecture, which aims to define the integration between social and ERP. The fact that an important company proposes an architecture similar to our framework confirm that we were able to propose a pattern that may be useful to the future implementation of “Social ERP” and the idea is shared by the members of the market.