ERP market suffers skills crisis

The enterprise resource planning (ERP) market may be suffering from post-Year 2000 (Y2K) blues, but rumours of its demise are greatly exaggerated, according to organisations trying to undertake staff recruitment in the field.

Mary-Sue Rogers, who heads PricewaterhouseCoopers’ 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.

Many 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.

Duncan Prior, head of business streams for communications and commercials at Druid, says: “There were major questions at the end of 1999 about the future of ERP. The argument was that most companies had implemented ERP and that it wasn’t producing the benefits touted for it, while on the horizon other ideas like CRM and ebusiness loomed. But ERP is not dead – far from it.”

He predicts that the market will change in nature, however. “Several years ago, one of the main drivers for ERP was Y2K-compliance, but now clients are looking for demonstrable business benefits. UK manufacturing productivity growth, year on year, is 1 to 1.5 per cent – people are looking for jumps in that figure and know that IT investment can help.”

Demand for ‘ERP plus’ projects

A second shift in the market, he says, is demand for what he calls “ERP plus” projects. “These focus on greater internal harmonisation, or links up and down the supply chain. A firm which implemented an ERP system two years ago, for example, now wants to hook into its suppliers, in sales or production planning, product lifecycle management or shared design and research and development,” he explains.

Mike 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 fulfilment.”

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 fulfilment applications, are interested in skilled people who can sell and implement them. Fulfilment 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.

Stuart Mclean, i2 Technologies’ recruitment manager for Northern Europe, is likewise finding that recruiting staff to handle the firm’s supply chain applications is not easy. The organisation has grown rapidly this year, with European staff numbers rising from 350 in February to 570 now.

“We are looking across the board for pre-sales, post sales and implementation consultants, and sales people. Growth has been in sales and consultants – people who can sell multimillion deals in our market space,” he explains.

Recruits typically come from rivals such as SAP, Oracle, CommerceOne, Baan and Manugistics, Mclean claims.

“Occasionally we get people from the transportation industry, with specific industry knowledge. Such people would be supply chain managers who have been involved in implementations within their own company, or would have specific product knowledge,” he adds.

Not enough ERP staff to go round

Although headhunting staff has been i2’s most successful method of recruitment so far, the vendor is now attempting to undertake more recruitment in-house to reduce the amount of money it spends with agencies, a costly process given its current growth levels.

But 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 are also looking for staff with experience of internet-based systems supplied by the big ERP players such as mySAP.com. “And,” Kensington adds, “Siebel consultants are in huge demand.”

While there has been a surge in demand for skills relating to front-office applications such as data warehouses, CRM, self-service HR and application service provision, Kensington has seen a massive decrease in consultancies looking for traditional ERP skills.

“PwC is the best example of a major consultancy doing big amounts of bog-standard SAP recruitment,” he says. “The other big consultancies aren’t looking in the same way. But consultancies across the board want ERP skills, with some exposure to new products such as Broadvision, Vantive, Clarify, Siebel and CommerceOne. And such people are like hens’ teeth.”

As a result, he adds, consultancies are becoming more open to employing people who have worked in a corporate environment. “For example, someone who has implemented Siebel at a big blue chip would be snapped up assuming their age and qualification profile was right. It’s a great time for people moving into consultancy,” he explains.

Experience essential

PwC’s 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. Experience of an older version is OK, and someone with JD Edwards skills, for example, coming in to do SAP wouldn’t find it too big a jump,” she says.

“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.

But one of the issues is that the ERP sector is no longer perceived as sexy. “The press and recruiters hyped ebusiness 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.

Kate Curtis, recruitment manager at FI Recruitment, part of the FI Group which recruits both for subsidiary Druid and external customers, likewise sees huge demand for people with genuine, proven implementation skills, who can add value to project teams.

“If I have seen a difference in the last six months, that is it. People with application knowledge who can point out potential pitfalls, and where the concentration in terms of risk analyses and impact should be, are much in demand,” she says.

No staff, no system

But it is quite difficult to find such people. In fact, says Curtis, some customers have delayed implementing systems, not because of a problem with the technology, but because they cannot find qualified, experienced personnel.

She adds: “A number of customers who have implemented ERP are finding that they haven’t locked knowledge into the company because they relied on the contractor model.”

This means that they are now looking to bring in staff with in-depth knowledge of the software they have in place. “Sustain and optimise skills are required – and there is huge demand for people who can use the ERP backbone to deliver the ebusiness requirements of the corporation,” she explains.

As a result, PwC’s Rogers said she would advise anyone on the contracting market to take a serious look at taking a permanent job. “Contractors use the skill sets that they are best at, and those skill sets will ultimately diminish in value without the training and investment that an organisation can provide. I use in-house staff for any leading edge stuff,” she claims.

Druid’s Prior agrees that skill development is essential. “There is definitely still a requirement for ERP skills, but you need to keep them alive – and know how to deliver business benefits,” he concludes.