The gradual shift from on-premises to cloud ERP makes the old emphasis on IT infrastructure less relevant and the ability to piece together cloud products more important.
By Tony Kontzer
As companies increasingly migrate to cloud-based ERP systems, there are numerous adjustments to consider. From added integration complexity and quarterly updates to more stringent data practices and ramped-up employee self-service, cloud ERP brings significant change.
To cope with all of this disruption, organizations must assemble a completely different kind of ERP support staff.
Gone are the days when the people working in ERP support could focus strictly on the hardware and software underlying the system. No longer can they simply throw technology over the wall to users. Modern systems call for ERP support staff who can balance people, processes and technology as never before.
“It’s a collaborative team effort between IT and the business,” said Paul Schenck, an analyst at Gartner. “It’s a total shift in the mindset.”
More specifically, Schenck said an increasingly valuable ERP support role going forward — one that he already sees some companies filling — is that of a cloud services broker. This is a term that’s largely been considered a service that organizations seek from a third party, but it’s slowly moving in-house, with good reason.
Cloud services brokers manage ongoing vendor relationships, a job that’s become much more complex in today’s multi-vendor hybrid environments. They manage communication about cloud vendors’ quarterly releases, they make sure vendors are adhering to service-level agreements and honouring contract terms and they manage the relationships between users and vendors.
Schenck said another important evolution in ERP support needs is a shift from project-based management — a leftover from the era of tackling huge on-premises ERP upgrades every few years — to more modular, product-based management. In this model, Agile-based methodologies are employed by small teams that manage the more frequent update cycle for specific parts of the business, such as HR or procurement, or even smaller pieces of those functions. This allows the ERP system to meet the specific needs of independent teams.
“It’s a thing that’s up-and-coming in ERP support,” Schenck said.
Not having people who have the ability to manage IT assets, think strategically and engender a collaborative approach can undermine modern ERP efforts.
Rick Gemereth, CIO of Lionel LLC, a maker of model trains and die-cast NASCAR replicas based in Concord, N.C., said his company’s progress on refining its NetSuite cloud ERP system took a hit when two of his best big-picture thinkers moved on to other jobs. Their departure caused the company to struggle when it couldn’t make up for the lack of in-house planning expertise, so Gemereth had to pull back on the pace of his plans.
“You have to be realistic,” he said. “You can continue running down the alley without the resources you need, but eventually you’ll run into the wall.”
Conversely, once he brought new strategic thinkers onto his ERP support team, he was able to extend Lionel’s ERP operations to match the company’s idiosyncrasies. For example, Lionel has a photographer at NASCAR events take 360-degree images of the winning cars. The company then makes exact replicas — with dents, scratches, the works — and presells them.
With the full complement of ERP support, Lionel was able to build an e-commerce process that enables it to trigger production only if enough orders are placed. This capability helps align production with a demand that has a short window, as consumers’ urge to buy replicas dissipates a few months after the race.
“If we do not hit the minimum order, we do not make the car,” Gemereth said. “We’re trying to avoid manufacturing things that won’t sell.”
What Gemereth has learned about cloud ERP is exactly what Schenck said: That it requires ERP support staff who bring both project-management and big-picture analytical skills. It’s not an easy combination to find.
“In my time, I haven’t seen a whole lot of people who can cross both sides,” Gemereth said.
Josh Greenbaum, principal at Enterprise Applications Consulting, calls the range of capabilities companies need from ERP support staff “bridge skills” because of the need to link IT with the business.
For example, Greenbaum had a client who built an app for field employees because it was assumed that it would help them do their jobs. But what they didn’t take into account was that many of the potential users were older employees still using flip phones who couldn’t even use the app. A simple conversation about what employees really needed could have saved the company the time and money invested in an unnecessary app.
“People need to step up and have those conversations and bring business into the process,” he said. “It doesn’t happen because you wave a wand and have a meeting.”
Gemereth believes that approaching support of cloud ERP as a collaborative undertaking presents an opportunity to be freed from an antiquated, head-in-the-sand approach to IT. In that sense, he considers having to support cloud ERP to be a gift.
“I want to drive the business,” Gemereth said, “not just run the business of IT.”
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