ERP cloud-Many enterprise software or enterprise resource planning (ERP) vendors are in some phase of moving to a new digital platform, with each trying to encourage long-standing customers to shift with them.
SAP is aggressively looking to move its base over to S/4 HANA, and Oracle is doing the same with its ERP Cloud offering. Yet customers may find they’re being faced with less a choice and more a demand from the vendor, with many ERP giants scheduling end of support for older versions within the next decade.
It’s a large shift that is not without precedent: those in business during the late 1990s will recall the rush to upgrade systems ahead of the Y2K doomsday scenario, and the shift to client-server and the web from old “green screen” systems. Today’s shift towards next-generation digital platforms is similar to those days when finding people with significant experience was difficult as the new systems were only just launched.
But as was the case then, the digital shift is not as simple as flicking a switch. These new platforms can require a whole new set of skills to implement and administer, let alone support. Further, those best placed to guide the customers of those ERP giants are on their way out. Take SAP, which this year announced it would lay off about 4,400 employees, with Australia and New Zealand among the affected regions. According to recent comments from SAP’s CEO, Bill McDermott, the layoffs are part of a “fitness program”:
“What we’re doing with the fitness program is we’re giving people a chance to do some early retirement in countries where we need to do that,” McDermott said.
One way to look at early retirements is that experience is set to walk out the door before its time and with it the best placed and most trusted expertise needed to ease the transition for customers.
The way these customers currently do business means they may face a deadline of obsolescence – but those making the shift early could find the skills are not quite there yet to support the transition to digital platforms.