Member Article

Is Retirement a Risk to Your ERP?

Don’t be left stranded as your ERP experts approach retirement.

Warning sign #1 - Too much wisdom in too few heads

Every business has go-to gurus, the in-house experts everyone seeks out for answers. Grey hair may be a sign of wisdom, but it can also be an indicator of impending risk. If the continued operation of your internal systems relies heavily on the troubleshooting experience and expertise of a few key individuals, what will happen when they’ve gone? The number of people reaching 65 in 2012 is 30% higher than in 2011, and numbers will remain high for the next five years.

Warning sign #2 - Doing it yourself because the computer can’t

Many firms use manual processes to paper over the cracks in their ageing (or sometimes relatively new) ERP systems. The evidence isn’t hard to spot:

• Complex spreadsheets that only one person knows how to use.
• Manual or batch data transfer between systems.
• Special procedures to fix recurring problems.
• Reporting takes forever.

Too often, the knowledge required to maintain these processes is owned by a very small pool of people who take it with them when they leave.

Spreadsheet statistics:

• Around half of all companies use spreadsheets for cash flow forecasting.
• Almost nine out of ten businesses use spreadsheets for budgeting
• 91% of spreadsheets contain errors

Warning sign #3 - Your library of procedure manuals is empty

You might think no one reads the manual, but it can be a precious resource when the experts aren’t around. Even if the business processes around your ERP systems were documented, chances are they’re out of date and incomplete.

Those empty procedure manuals won’t be a problem until key staff leave and a problem pops up that you can’t solve. Six out of ten businesses aren’t ready for the changes coming as baby boomers leave the workplace.

Warning #4 - Your succession plans have failed to materialise

“Succession planning may be broadly defined as a process for identifying and developing potential future leaders or senior managers, as well as individuals to fill other business-critical positions.” CIPD

There’s more to succession planning than identifying who will hold the top jobs in a few years’ time. It’s also about ascertaining the roles, and individuals, with the highest concentration of knowledge and skills needed for ongoing success. Unfortunately, the pressures of today often relegate preparing for tomorrow to the wish list of tasks that never get done. The result can be a crisis when a business-critical member of the team leaves.

Only 28% of medium-sized businesses have any form of succession planning.

Warning sign #5 - Lots of customisations

It’s great that ERP systems can be modified to suit your specific needs. But time-saving customisations can become time-devouring problems when the changes are undocumented, and the brains behind the modifications have left the business. 96% of ERP users have made moderate to extensive changes in their ERP systems. When your key employees retire, so too does all the business-critical knowledge that’s lodged inside their heads. Unlike the computers that run your ERP systems, that information can’t all be downloaded just before they walk out the door. The time to start preparing for their inevitable departure is now (if not last year!). 3.3 million people will hit retirement age in the next 5 years.

Get ready for them to go!

• Identify who in your organisation holds the key to the ERP system’s secrets
• Don’t be tempted to replace the system with time-consuming manual processes
• Identify who will take over from retiring baby boomers and organise system training
• Make sure your library of procedure manuals is not only well-populated but also well-organised
• Ensure you have a comprehensive succession plan in place
• Is it time to adopt a standard package ERP system that is supported by the supplier?

Download the eGuide now: Why you can’t Excel with spreadsheets: 7 risks of in-house processes for manufacturers. Copy and paste this link into your browser: http://bit.ly/1iLe91B

This was posted in Bdaily's Members' News section by Paul Bywater .