The Future of ERP: IT Talent Management Could Be Your Achilles’ Heel

Pat Phelan
3 min read

Composable ERP requires a broader set of support skills than integrated suites. It also requires experts with knowledge that spans the business and IT. Yet, CIOs face a tough truth with IT talent management. Some ERP skills are going the way of COBOL programming: fundamentally critical to operations, but increasingly scarce and losing appeal as a career path.   

Analysis  

When the initial COVID disruptions caused the US government to quickly add $600 to weekly unemployment benefits administered by each state, it exposed how essential and vulnerable the aging COBOL-based mainframe systems responsible for processing those benefit payments were — with states like New Jersey lacking staff able to do the necessary programming.  

“There are billions of lines of code written in COBOL still running mission critical applications, but the great wave of COBOL-trained programmers who wrote all that code are aging out of the workforce,” InfoWorld reported. “But the COBOL era has persisted to present day, and many legacy systems have muddled on, only half understood by the companies that rely on them, after the expensive ‘big bang’ projects to replace them failed.” 

Substitute “COBOL” with “ERP” and “big bang” with “modernization,” and you can envision why many businesses are likely to steer their Titanic ERPs into a massive, mostly hidden iceberg of a support skills shortage. In fact, according to research by the ASUG SAP user group: 

  • 38% of member organizations do not have enough skilled staff to keep up with technology changes 
  • 27% are lacking internal skills to manage new products 

 “The ERP industry is woefully short of resources and many global brands in this space are locked in a battle to find, recruit and retain new talent,” Steve Leggeter, a senior lecturer in Computer and Information Sciences at Northumbria University, writes for ERP Today. “A significant proportion of resources in the ERP ecosystem are in the twilight of their careers, having already served 20 or 30 years, and the pathway for young talent to get a foothold in the tech sector is often not straightforward.” 

What to Watch for 

A recent survey by CIO, sponsored by Rimini Street, found that 86% of respondents anticipate challenges in hiring individuals with expertise in on-premises technologies, such as ERP and CRM. “Most organizations are focused on acquiring emerging skills, rather than retaining their existing knowledge base,” according to the survey report. “For example, respondents are more concerned about filling cybersecurity and artificial intelligence (AI)/machine learning (ML) roles than enterprise software/ERP positions.” 

This creates an IT talent management problem. It’s more than a challenge to convince young talent that ERP is the shiny object worth devoting their careers to. Especially as businesses are reluctant to tinker with these essential systems once implemented. 

“Despite powerful arguments for digital transformation, 47% of software decision-makers who have implemented, or are implementing, an ERP product plan to retain it,” Forrester analyst Duncan Jones explains in a ComputerWeekly article. “Also, many of those who are considering a change may have no immediate plans beyond a minor upgrade to a more current release.” 

As state unemployment agencies found with their aging COBOL programs, once skills go stale it is time-consuming and costly to try to pick up the pace for a modernization effort. Yet, the CIO survey found that more than half of surveyed organizations are shifting staff from managing on-premises legacy technology to assisting with other projects such as cloud migrations and digital transformation.  

Further complicating the staffing issue is the reality that skilled tech workers are more able to join the “Great Resignation” and leave behind a dull, boring job for something new and, perhaps, a work-from-home opportunity. A Gartner study found that only 16% of IT workers in the 19- to 29-year-old category plan to stay with their current jobs. 

Actions to take 

So, what’s an IT decision-maker to do? Here are some suggestions: 

  • Craft a strategy that balances the need for new and old skills. 
  • Evaluate the potential for allowing existing and future staffers to work remotely. 
  • Utilize remote work to attract skilled ERP talent who want to leverage their existing skills but have no desire to move to your location. 
  • Line up external partners who can help address talent gaps to ensure you can improve quality and performance; deepen the ability to accommodate changing business demands; and improve access to new and emerging skills.