Wrong ERP Demise Predictions Have (Only Partly) Created Skills Shortage
Written By: Predrag Jakovljevic
Published On: February 2 2001
Wrong ERP Demise Predictions Have (Only Partly) Created Skills Shortage
As reported on January 9 on VNUnet.com, a leading European IT news
portal, e-business and customer relationship management (CRM) may be all
the rage, but IT recruiting professionals say the demand for enterprise
resource planning (ERP) professionals is hot as well. While the ERP market
may still be recuperating from theY2K hangover, the predictions of its
demise have been greatly exaggerated, according to organizations trying
to conduct staff recruitment in the field.
Rogers, who heads PriceWaterhouseCoopers' (PWC) UK technical
solutions team for the consumer and industrial products sector, confirms:
"We have been very busy since March. Post-Y2K, a lot of clients have kicked
in with major ERP implementations." While many of these are driven by
big business changes such as mergers or de-mergers, she claims that quite
a few major corporations are starting their ERP projects from scratch.
"A second driver is the e-thing. Everyone wants to be on the web, and
we are doing quite a lot of e-enabling legacy systems for clients who
do not want to do a complete upgrade." A lot of customers are also adding
human resources (HR) and e-procurement modules to their existing systems
and integrating them with customer relationship management (CRM)-based
ones. "We are seeing it in all three sectors we focus on - SAP,
Oracle and PeopleSoft," Rogers explains.
of the projects being undertaken by PWC are sizeable, she adds, requiring
between 50 and 100 staff over an 18- to 24-month period. But she claims
that PWC is not the only one bidding for such work, with the traditional
ERP vendors themselves also closing big deals.
Milner, a recruitment consultant with ERP specialist MJM Recruitment,
adds: "ERP software alone no longer provides competitive advantage. The
real advantage, as far as the user is concerned, derives from order fulfillment."
While he still sees demand for pre- and post-sales staff among the traditional
ERP installed base, he also believes that start-ups and pre-flotation
companies focusing on the emerging market for order fulfillment applications,
are interested in skilled people who can sell and implement them. Fulfillment
systems sit on top of the conventional plumbing provided by ERP software.
"Such companies are looking for people with a fundamental understanding
of ERP and how to sell complex solutions into the enterprise - and explain
the corporate benefits," Milner claims.
Mike Kensington, an executive at recruiter Prism, confirms that
ERP vendors and consultancies are chasing a finite population. "They are
looking at ERP from a different angle now. They are looking to integrate
it with the web, front-office applications and CRM. They want people with
experience of using e-modules or integrating these products. Consultancies
across the board want ERP skills, with some exposure to new products such
as Broadvision, Vantive, Clarify, Siebel and
Commerce One. And such people are as scarce as hens' teeth."
Rogers confirms that the company is looking for staff that can handle
all aspects of ERP, but, like other big firms, it has struggled to recruit
them over the last six months. "It's a more mature marketplace and we
want people who have 'been there and done it'. We are not looking for
foundations to build on, but implementation experience of any of the big
packages. The market is very hot and it's not easy to find the right sort
of people. In more traditional ERP areas we have significant chunks of
work that I can't resource without hiring contractors," Rogers adds.
one of the issues is that the ERP sector is no longer perceived as attractive.
"The press and recruiters hyped e-business and tried to build an early
grave for the ERP side, but ERP is alive and kicking. If you don't get
the ERP right, e-anything is not going to work because it relies on having
a solid data model and set of processes to put the next layer on," she
claims. But it is quite difficult to find such people. In fact, some customers
have delayed implementing systems, not because of a problem with the technology,
but because they cannot find qualified, experienced personnel.
ERP's vitality is on the mend, which should be a relief for all involved
parties: vendors, enterprises, and consultants/system integrators. This
is by no means a surprise for TEC, since we have been noting this trend
for awhile (for more information, see ERP
Demand Being Re-heated, Will
That Wretched ERP Finally Die? Possibly, But Only the Acronym!, ERP
Getting a New Breath of Fresh Air in Europe, and Big
ERP Players Courting Government Agencies) and have strongly opposed
the theory of ERP obsolescence touted by many at that time.
all the recent attention being paid to e-commerce and CRM, some may feel
that ERP is a pass technology. ERP, however, remains as necessary as
ever. Nonetheless it does need to evolve to thrive in the Internet age.
fact remains that the majority of ERP vendors have been taken aback during
the last two years by a combined effect of the following major factors:
- The Y2K-caused
- The Fortune
500 market saturation
- A bad
reputation for exorbitantly expensive and protracted implementations
without producing touted benefits
- The market's
attention shift to e-business, supply chain management (SCM), client
relationship management (CRM), business intelligence (BI), and other
We feel that
the majority of vendors tackled those difficulties with appropriate, time-and-money-consuming
more implementation-friendly and industry-tailored products attractive
to the untapped small-to-medium market
product functionality to cover the above-mentioned hot applications
(web-enabling) or fundamentally revamping the product architecture to
be Internet based
- And More
upbeat quarterly and/or annual results from most of Tier 1 players including
even once written off Baan, particularly in terms of license revenue increase
despite the general economy slowdown, demonstrate the market is on its
functionality of ERP and the Internet (and its associated e-commerce technologies)
are different. While ERP is an integrated transaction-processing system
that handles major information within the four-walls of an enterprise,
the Internet is primarily a distribution medium and does not entail a
lot of processing. Although the information flow through the Internet
is becoming more amenable to transaction-processing all the time, particularly
with the advent of new technologies like Java and XML, it is still mostly
processed by applications, ERP packages being the best example. The great
benefit of ERP is integration- enabling all users to use the same information
and business processes and obtain the same results when the system is
is a myriad of exciting point-specific applications with a strong Internet
orientation, these applications do not currently provide strong information
integration among companies. Integration with ERP has never been easily
achievable, although it is generally worth the trouble. The integration
allows firms to offer services such as available-to-promise (ATP) inventory,
which means that customers do not order 'pies in the sky'. If procurement
systems are not integrated with sales, manufacturing and logistical systems,
ATP is just a teasing hallucination. A lot of e-commerce vendors cannot
provide it at this stage, despite their highly Web-enabled applications.
Therefore, the merits of ERP will prevail for a long time to come.
Our belief is that the current shortage of quality ERP consultants is
only partly attributable to wrong ERP demise predictions and subsequent
(in)voluntary defections of disconcerted ERP consultants into more promising
areas like CRM. Some attrition should also be written off to the severe
travel requirements and consequent burnout and personal life sacrifices.
For that reason, some have opted for internal consulting within a particular
enterprise. Others have found a sweet spot as pre-sales consultants for
ERP vendors and their channel; it involves much less traveling, while
it requires extensive experience and creativity to tackle prospective
users' issues on the fly.
main reason for the skills shortage, however, lies in the higher market
awareness and self-education of users before jumping on an ERP implementation
journey. Early ERP implementations often proved to be costly and time-consuming,
if not with disastrous consequences. Several years ago, one of the main
drivers for ERP use was Y2K-compliance. Now clients' focus has shifted
to achieving apparent business benefits. Many companies have become disillusioned
with multiple-year implementation schedules, budget-breaking costs and
promised benefits that never do occur.
consequent shift in the market is the demand for so-called "ERP plus"
projects, as companies are now trying to integrate ERP software with other
applications that focus on superior internal coordination, with links
both up and down the supply chain. An enterprise which has already implemented
an ERP system, may now want information transparency for everybody - its
suppliers and/or customers, in sales and/or production planning, product
lifecycle management or shared design and research and development departments.
are hoping to resurrect that missing return on investment (ROI) through
integrating existing ERP software with other business applications. Finally,
a number of companies that grow by acquisitions will have to install ERP
systems in newly acquired businesses. ERP systems are being extended to
a variety of areas: facilitating supply chain wide employee and business
partners self-service, clarifying the details of business changes like
mergers and moving beyond corporate headquarters to other business units.
while there is still a wealth of opportunities in the ERP space, they
require much more comprehensive individual skill sets rather than being
an "expert" in a particular application or a narrow field. Those who will
succeed will know how to interface/integrate ERP with supply-chain, CRM
and e-commerce components - or even how to integrate different ERP modules
- both on a program level and at the business process architecture level.
Hence, jobs in ERP consulting are increasingly demanding more experience
and business sophistication than ever, as the market matures and morphs.
Consultants who have particular functional expertise in areas like warehouse
management, quality management and procurement, will still fare well.
Such knowledge is critical because much of an ERP implementation involves
aligning business processes with the software's capabilities.
and recruiting firms will see a mature but ongoing market for experienced
ERP professionals who can work in Web-based environments. Business experience
in specific industries and business areas such as finance and human resources
(HR) should vouch for even more opportunities. Knowing the fine points
of accounting and inventory control or the particular needs of for example,
banking or automotive industries, contributes to a well-rounded skill
set for IT recruiters in ERP positions as applications developers, software
architects, project managers, engineers and marketing specialists. ERP
specialists, who possess a variety of strengths, including strong communications
and interpersonal skills, will continue to be valuable to their organizations.
Given all the above-mentioned profile requirements, it doesn't take a
genius to figure out the reasons for existing ERP skills shortage.
ERP seems to be getting back in shape. This does not however imply that
applications vendors, their affiliate system integrators and consultants
will not have to seriously put their current business models and practices
under a magnifying glass. ERP has long moved from the realm of IT to business.
The 'gravy train' days of multi-year implementations, with over $2000
per day charges for (inexperienced) consultants, without producing any
obvious results are past. Jobs in ERP are indisputably demanding more
experience and business sophistication than before.
have, for some time, been in the driver's seat and have increasingly been
aware of the fact that they need a reliable back-office system in place
in order to conduct their e-business or client relationship management.
Therefore, we encourage them to aggressively inform themselves about vendors'
latest product offerings and vigorously negotiate contract terms. Pay
close attention to vendors' extended ERP applications and discern hype
from reality. The 64,000-dollar question is how functionality rich those
new components are, and how seamlessly they have been integrated with
the back-office. Alternatively, how feasible would the integration with
third-party products be? Put vendors' software through its paces during
"scripted scenario" demonstrations (detailed sequences of near real-life
business processes), in order to further distinguish between the vendors
who made the short list.
piece of advice to consultants: be agile and alert! Make every effort
to maintain your skills according to market demands. A magic formula lies
in the balance of both business skills and basic technical understanding
of what happens "underneath the hood". Knowledge of, for example, XML,
Java, C++, and/or Visual Basic can never hurt. Inform yourselves about
the company you wish to join. Do they really treat their staff as an asset,
which they probably claim during their recruiting effort? Are they a 'hire-and-fire'
place or a company who continuously invests in its people's skill sets
and attempts to cross-train them before laying them off in droves? Are
they making any efforts to provide "virtual consulting' model that requires
only a reasonable amount of traveling? Needless to say, informal networking
skills are needed to find the answer to these questions.