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Digitalization Is Creating An ERP Skills Shortage by Pat Phelan

By Deborah Wilson | March 14, 2018 | 0 Comments

Pat Phelan picEnterprises are starting to look beyond traditional ERP vendors for solutions that can support digital business. If creating a digital business model changes the way that work gets done, perhaps even eliminating the concept of separate front- and back-office applications, will it spell the end of ERP? Gartner doesn’t think so. It is more likely that how ERP is defined will change.  We are already seeing that ERP means different things to different enterprises, but they still (and will always) need a systematic way to record the results of ‘work’ and report on it regardless of ‘how work gets done’.  Yet, questions remain: “What does digital mean for ERP?” and “What skills and expertise will we need to support it?”

Although the dust hasn’t settled on a definition of “ERP of the future”, we are already seeing an impact of digitalization on ERP resources and skills… in two ways. First, there is a ‘brain drain’ of resources for applications such as SAP’s ECC and Oracle’s EBS suites because talented staff are being moved to experimental digital projects. Support of established applications is also being affected by retirements of knowledgeable, long-term staff. For enterprises whose postmodern ERP strategy includes retaining incumbent ERP solutions for a number of years, we expect the pool of experts who can support them to continue shrinking. Is it time to create an ERP expert replenishment process – including ways to develop the skills internally? Or, perhaps outsource the more commodity-like support skills and services?

The second way digitalization is affecting ERP resources and skills is a lack of expertise to work on new digital projects. This includes both business and technical skills. For example, when AI takes hold, which skills will business staff need to assess how to incorporate AI into the business model (in addition to the ERP-specific knowledge and expertise)? Does anyone on staff have those digital skills? Most enterprises don’t already have them; there are few experts available in these early days to steal from other enterprises; and it takes time to develop the needed skills. The same applies to supplying technical expertise needed to select, implement and support the AI technologies.

Since filling the digital skills gap will be on the critical path for business and IT in enterprises that are planning digital initiatives involving ERP, factor this into early digital projects.  Plan for the lead-time it will take to hire external experts who will be scarce through 2023, and probably more costly as a result. Also plan for the growing pains associated with developing the knowledge internally. Examples of this include giving staff a chance to fail while they learn or including extra time in projects to accommodate the learning curve. Most likely, a mix of both staffing approaches will be necessary for the next 5 years.

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