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TEKsystems, a provider of IT staffing solutions, IT talent management expertise, and IT services, recently partnered with IDG Research to explore the major success factors and pitfalls of ERP implementations. The survey of 200 IT professionals involved in ERP implementations, upgrades and/or management was conducted in February 2012.
Enterprise resource planning (ERP) systems are massive, multi-million dollar undertakings that affect nearly every business process within an enterprise. Unfortunately, given the size and complexity involved in ERP initiatives, successful implementations are not the norm. In fact, in a recent IDG Research survey, only 27% of IT leaders said their ERP initiatives are very successful.
Considering the importance of people involved in ERP projects, the assumption would be that companies spend a significant amount of time and effort doing workforce planning around ERP – in fact, the opposite is true. According to a recent IDG Research survey, IT leaders admit that people are the root of most ERP program issues. Only 17% of respondents strongly agreed that their organization dedicates the appropriate amount of thought and effort to workforce planning for ERP programs. Interestingly, 80% of respondents who report successful ERP implementations feel their organizations spend the appropriate amount of thought and effort on workforce planning compared to only 55% of respondents who report failed implementations. Clearly, organizations that understand the importance of having the right people in the right roles will set themselves apart, enabling them to thrive in highly competitive markets.
Defined as a strategy to have the right people, in the right place, at the right time, to fulfill business objectives, effective workforce planning is paramount to successful ERP projects. 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. More than 40% of respondents experienced missed timelines (55%); lower quality deliverables (45%); productivity issues (44%); less system functionality than defined in original project scope (43%); and budget overruns (42%) because of that lack of talent.
Any and all of these mishaps can lead to job loss on an individual level—and massive financial loss on an organizational one. IT leaders report that budget overages caused by IT skill scarcity, on average, can cause a financial impact of 15% of total ERP project costs, which is a huge number considering ERP programs can cost upwards of $15 million.
Issues Faced as a Result of IT Skill Shortages During ERP Projects
When looking at various planning activities for an ERP program, workforce planning falls at the bottom of IT leaders’ list of priorities. Aligning stakeholders, building a business case, capturing ROI and selecting the technology are all rated as higher priorities, relative to workforce planning.
However, without the appropriate prioritization of workforce planning efforts, IT leaders report multiple workforce-related challenges. The number one issue reported is “getting the qualified IT professionals I need fast” (46%). This challenge is followed closely by “retaining the resources I need for the duration of the project” (36%), and “securing the appropriate training” (34%).
“With all the technical and political aspects IT leaders must manage throughout an ERP program, serious focus on these workforce-related areas tends to fall dangerously by the wayside,” says TEKsystems’ ERP Support Services Director David Spires. “The people planning these projects usually come from an IT background, so they focus more on the technology and the business process and less on having the right people in place—the primary reason projects get derailed.”