Only 27% of IT Leaders Report Their Enterprise Resource Planning (ERP) Projects are Very Successful, Finds TEKsystems
May 1, 2012 | HANOVER, MD | For media inquiries, please contact us at media@TEKsystems.com.
HANOVER, MD – May 01, 2012 – Only 27% of IT leaders report that their organization’s ERP projects are very successful, according to a recent survey performed by IDG Research Services Group and TEKsystems, a leading provider of IT staffing solutions, IT talent management expertise and IT services. Interestingly, 80% of IT leaders who report successful ERP implementations feel their organizations spend the appropriate amount of thought and effort on workforce planning compared to only 55% of those who report failed implementations.
The Importance of Workforce Planning
More than 90% of organizations report experiencing at least one major challenge due to a lack of available qualified IT professionals for their ERP programs. Challenges they experience include: missed timelines (55%); lower quality deliverables (45%), productivity issues (44%), less system functionality than defined in original project scope (43%) and budget overruns (42%) due to lack of talent. IT leaders say the average cost of budget overages is 15% of total ERP project costs.
“People are the common denominator of both successful and failed implementations. Those organizations that dedicate appropriate focus to workforce planning and finding the right people tend to reap the desired business benefits of their ERP systems. The organizations that don’t prioritize workforce planning typically find themselves spending more money and experiencing more headaches,” says TEKsystems ERP Support Services Director, David Spires.
Why Workforce Planning is Difficult
Workforce planning tends to fall at the bottom of IT leaders’ priority lists behind aligning stakeholders, building a business case, capturing ROI and selecting the technology platform. Forty-six percent (46%) of IT leaders report that “getting the qualified IT professionals I need fast” is the number one challenge during ERP projects. More than a third of IT leaders also say “retaining the resources I need for the duration of the project” (36%) and “securing the appropriate training” (34%) are major challenges.
“With all the technical and political issues IT leaders must manage throughout an ERP program, workforce planning tends to fall dangerously by the wayside,” states Spires. “The less focus companies place on acquiring the best talent, the more likely they are to get whatever resources are available rather than the right people for the job.”
Determining the Right Sourcing Strategy
Only 25% of organizations are extremely confident in their in-house experience to plan, build and run ERP programs. Just 21% are extremely confident in their in-house skills to do the same. And only 17% express extreme confidence that they have the necessary capacity to manage their ERP projects.
Further, 18% of IT leaders report that training internal employees on new and necessary skills is the primary method to address workforce gaps for ERP projects. Aside from training, IT leaders also report using the following sourcing strategies:
- Staffing project teams utilizing internal employees, then backfilling the support of the legacy environment (14%)
- Hiring specialized contractors to address spikes in project hours (9%)
- Using project partners to fill gaps (8%)
- Outsourcing portions of projects (8%)
- Augmenting staff (8%)
- Outsourcing the entire project (6%)
“While training tends to be the ‘go-to’ method for addressing skills gaps of current team members, it fails to address experience and bandwidth concerns. It also takes time for learning to evolve into true skill,” comments Spires. “The best organizations work with the right partners to assess and fill their gaps, considering all potential sourcing strategies. Be wary of what your team can actually handle to avoid burnout and falling even further behind.”
About the Survey
TEKsystems partnered with IDG Research Services Group to explore the major success factors and challenges of ERP system implementations. The survey of 200 IT professionals involved in ERP implementations, upgrades and/or management was conducted in February 2012.
People are at the heart of every successful business initiative. At TEKsystems, an Allegis Group company, we understand people. Every year we deploy more than 80,000 IT professionals at 6,000 client sites across North America, Europe and Asia. Our deep insights into IT human capital management enable us to help our clients achieve their business goals–while optimizing their IT workforce strategies. We provide IT staffing solutions and IT services to help our clients plan, build and run their critical business initiatives. Through our range of quality-focused delivery models, we meet our clients where they are, and take them where they want to go, the way they want to get there.