Declining ERP user skill levels hit the bottom line

Businesses are risking the return on investment from their enterprise software because the levels of end user skills are in...

Businesses are risking the return on investment from their enterprise software because the levels of end user skills are in decline, according to the Meta Group.

A survey of Meta clients using JD Edwards ERP software revealed 45% of respondents expressing concern at "user competency".

According to a Meta research note, "Parallel studies into SAP's installed base have revealed a similar decay in ERP end-user competency."

Meta analyst Andreas Bitterer said, "This is not a platform issue. It is true across the board for ERP and CRM systems."

Many firms provide end-user training for enterprise software only once, when the system is installed. After that they rely on internal "pass the baton" training.

"This condemns the user base to declining skills and knowledge and that has a direct impact on the return on investment," he added.

David Roberts, chief executive officer at Corporate IT Forum Tif, said the need to maintain skill levels "should be blindingly obvious".

Ongoing training was simply "the cost of living with IT".

"It should be the HR function that recognises the problem, but the board may need extra encouragement from the IT director. IT investment is not cheap," he added.

Simon England, government partner at consultants Accenture, said he was constantly surprised by the way organisations underestimate the "people costs" in implementing and maintaining enterprise software.

"As a rule of thumb, some 40% to 50% of your budget should go on people change aspects of a technology led change programme," said England.

"Too often we see people trying to spend 10% or less," he added.

The Accenture partner said, "If you invest hundreds of millions of pounds you build a tight business case and track return on investment, but very few organisations track return on investment for training."

BT is one of the few organisations that does, said England. The telco has a successful contract with Accenture where the consultancy is paid by the measurable business benefit of the training it provides to BT sales and customer service staff.

According to Victoria Gill, an adviser on training at the Chartered Institute of Personnel and Development, UK training budgets in the private sector were down 27.9% in the past 12 months.

The figures, from a CIPD survey, compare favourably with the reduction in training budgets in the economic downturns in the 1980s and 1990s, she said.

However, analysis of the CIPD figures by Ewart Keep, deputy director of the Warwick University centre for Skills, Knowledge and Organisational Performance, suggested that the headline figure on training budgets was disguising deeper problems.

"There are indications that the bulk of employer-provided training is underpinned by operational or legislative requirements that make cuts difficult, if not impossible, to contemplate.

"Buoyant figures on training spend may reflect costs that are more or less unavoidable rather than some deeper organisational commitment to skills development," said Keep.

Like England, Meta's Bitterer was adamant that organisations should resist the pressure to cut high-end training.

"Companies buy enterprise packages to get competitive advantage, but if your employees are effectively doing data entry and you never leverage the analytics and other advanced applications of the package, you are simply hurting yourself and your business," he warned.

Read more on Business applications