Is ERP Set to Retire Along with the Baby Boomers?

Record numbers of people will be hitting the classic retirement age of 65 over the next few years. The exit of these so-called ‘baby boomers’, the product of the population explosion of the late 1940s and early 1950s, is more than just a statistical blip. It also sees the custodians of huge volumes of commercial knowledge walk out of the workplace.

One industry that looks set to particularly suffer from this exodus is ERP. Enterprise computing grew and matured alongside the baby-boomer generation, allowing them rewarding professional careers working with technology valued by manufacturing businesses.

In my experience, many of today’s ERP specialists, both in-house and consultants, are complaining about the lack of young blood coming in behind them.

The Effect of the Economy and Business Practices

The loss of the generation that understood and appreciated enterprise systems is not the only threat to ERP.

The economic downturn delayed many manufacturers from undertaking ERP system projects. This increased their reliance on legacy technology or ‘in-house’ fixes, which are often managed by those now approaching retirement.

Failure to ‘embed’ the expertise of individuals within the businesses via systems will see the loss of years of valuable knowledge. Failure to update their technology will make it harder and harder to find staff to support it.

When staff leave, if critical business processes can’t continue, the business is at risk. Companies may have become reliant on the memory skills of individuals, rather than having systems that can give the answers.

Embracing the need for operational change is an opportunity to grow what the business is capable of.

Spotting the Danger Signs

Preparation is essential for firms who want to get through what could be a serious skills crisis.

Here are some of the signals warning that your business could be at risk from baby boomer retirements:

• The level of manual work-arounds is increasing, because too few people understand the core ERP business processes
• Succession planning remains a ‘to-do list’ item yet to be implemented
• Your ERP system is riddled with customizations, detailed knowledge of which will leave with your in-house experts when they retire
• Documentation of your ERP systems and processes hasn’t been reviewed or updated for a long time
• The majority of your in-house experts are approaching the end of their working lives

Who Will Operate Tomorrow’s ERP?

The challenge for ERP, and indeed for manufacturing as a whole, is to present itself as an exciting and rewarding career proposition. At the same time, manufacturers must be prepared to run their ERP systems without the experienced staff they’ve relied on for years.

Prepare for this by:

• Conducting an audit of the current skills base
• Reviewing processes for knowledge transfer
• Performing a risk assessment to identify areas of the business most exposed
• Updating legacy systems with next generation technology

While some of the baby boomers may be willing to work on beyond 65, this is not a solution to the challenge facing today’s ERP users. Firms wanting to continue reaping the competitive benefits available from ERP need to be considering their future options right now.

by Paul Bywater, Managing Director of Manufacturing at Sanderson