July 2014 CAN ERP HELP BRIDGE THE GENERATIONAL DIVIDE? ADDRESSING THE SKILLS GAP A generational divide today fuels the skills gap in many industries. On one end of the spectrum we see highly trained, highly skilled baby boomers who are beginning to retire. This generation entered the work force at a time when many processes were still very manual, requiring a greater depth of knowledge and understanding. When faced with a new task or activity, these workers also faced a steep learning curve. They communicated (or not) without the aid of cell phones and the Internet; technology played a relatively minor role as people and careers matured. On the other end of the spectrum are the millennials who grew up with technology. They don’t know life without the Internet, smart phones and electronic gadgets. They don’t know what it is like to be “disconnected.” When faced with a new task or activity they ask, “Is there an app for that?” Since the answer is often yes, they are not required to develop the same level of understanding possessed by those who may soon be retiring. While baby boomers knew/know the business and perhaps don’t appreciate the extent to which technology can help, millennials take technology for granted but don’t have the same depth of business knowledge. Companies are increasingly looking for ways to bridge this generational divide. Enterprise Resource Planning (ERP) and other complementary systems can help, but only with a new generation of modern applications. By automating processes and making the user experience more intuitive, companies can not only attract the younger generation but also make life easier for older workers, drawing them into the technology fold. THE ERP CONNECTION Those running outdated ERP applications might be puzzled by the assertion that such a solution can bridge the generation gap or address a skill deficit. Early ERP solutions created the need for lots of training. Not only did users need to be trained in how to navigate menus and screens, but also in workflow and procedure. Because early ERP systems didn’t work exactly the way people worked, workers first had to learn how to do their jobs, and then separately had to learn how to enter data into ERP, and/or how to extract it. Depending Key Takeaways ü June 11, 2014: the Wall Street Journal reported the number of job openings in the US rose to its highest level in 7 years ü While job openings have returned to pre-‐ recession levels, hiring has not; unemployed workers lack required skills ü The connectivity, collaboration capabilities and added visibility of newer ERP solutions hold the key to bridging generational and skill gaps ü Ease of use has taken the top spot in terms of overall priority for companies when evaluating ERP solutions ü Younger workers are twice as likely to seek different employment as a result of usability challenges ü Older and younger generations will be drawn to new user experiences for different reasons, but will wind up in the same place, accessing enterprise data in real time ü New “social” capabilities now being delivered by ERP solution providers can produce a synergistic effect and help close the skills gap Can ERP Help Bridge the Generational Divide? Page 2 of 9 on how closely (or not) these two were aligned, the same ERP that was supposed to make life easier, sometimes made it harder. While baby boomers might not claim to have walked five miles to school in two feet of snow (uphill both ways?), they were accustomed to “hard.” They didn’t revolt. They adapted, even if it meant working around the system instead of with it. But on a personal level baby boomers also wanted “better” and “easier” for the next generation. And they delivered that, providing all the “modern conveniences” to their children and grandchildren. And of course the electronics of today were a natural progression for these next generations. They took to Xbox and computer games like fish to water. And games led to computers and cell phones and then smart phones, and then tablets. Computers led them to the Internet. Smart phones and tablets led them to “apps.” When the generation that grew up with consumer technology entered the “real world” and got jobs, they couldn’t understand why the “apps” they used at work weren’t as easy to use as the ones they were using on their smart phones and tablets. Unlike the older generation that knew the business and the business processes inside and out, and therefore knew how to operate outside of the system, the younger generation had become dependent upon technology. The combination of these forces has led to a change in how enterprise software like ERP is evaluated. While fit and functionality was the top selection criteria (by far) for many years, ease of use has caught up and has now nudged “fit and functionality” into second place. Table 1: Selection Criteria Mean Must Have / Most Important Ease of use 4.39 48% Fit and Functionality 4.38 54% Flexibility to address changing business needs 4.22 44% Total cost of ownership 4.13 39% Integration technologies and capabilities 4.12 37% Ease and speed of implementation 4.07 32% Quality and availability of vendor support services 4.07 36% Must be an integrated end-to-end solution (preferred over multiple point solutions) 3.98 36% Ability to tailor functionality without programming 3.98 32% Level of industry-specific expertise available from vendor/ partners 3.95 34% Software cost 3.94 29% The ability to access ERP data and functions through a mobile device 3.54 25% Having a choice of different deployment options (SaaS, Hosted, on-premise) 3.44 19% Selection Criteria Ranking Participants were asked to prioritize 13 different selection criteria on a scale of 1 to 5 as follows: 5: Must Have/Most Important 4: Important 3: Somewhat Important 2: Nice to Have 1: Not a Consideration The actual “mean” shown in Table 1 is less important than the relative priority of the different evaluation criteria. Data Source In this report, Mint Jutras references data collected from its 2014 ERP Solution Study, which investigated ERP goals, challenges and status and also benchmarked performance of ERP implementations. Almost 800 responses were collected from companies across a broad range of industries. This sample included responses from companies of all sizes, ranging from very small to very large enterprises. ü Can ERP Help Bridge the Generational Divide? Page 3 of 9 Source: Mint Jutras 2014 ERP Solution Study The Mint Jutras 2014 ERP Solution Study asked participants to prioritize 13 different selection criteria (Table 1) on a scale of 1 to 5. While fit and functionality still has the highest percentage of participant votes for “must have/most important,” ease of use has taken the top spot in terms of overall priority. Having all the functionality in the world is meaningless if you can’t figure out how to use it. While the 2014 ERP Solution Study did not capture age of participants, prior Mint Jutras research did just that. This prior research was conducted to understand how different generations responded to usability challenges. Older generations were significantly more likely to complain about these issues. Less secure in their positions, and with less influence, the younger generation might be reluctant to speak up, but they are certainly not willing to just suffer in silence. The youngest segment (those in the age group of 18 to 35 years) was twice as likely to seek different employment as a result of these issues. So if you are looking to attract and retain bright, young talent, you need to address these challenges. In the meantime, all age groups are likely to use ERP less frequently and are more likely to use other tools as an alternative, with the younger crowd overwhelmingly turning to spreadsheets. Nobody graduates from business school today without having mastered the use of spreadsheets and that skill seems to be well utilized when ERP is hard to use. So what does ease of use really mean? Realizing that this phrase means different things to different people, and even different things to the same person, we asked survey respondents to select the top three elements of ease of use that were most important (Figure 1). Figure 1: Defining Ease of Use Age Groups Participants were asked to identify their age by age group: ü 18 – 35 years old ü 36 – 45 years old ü 46 – 55 years old ü over 55 years old Younger workers are twice as likely to seek different employment as a result of usability challenges. In selecting ERP, “ease of use” has taken the top spot in terms of overall priority. Can ERP Help Bridge the Generational Divide? Page 4 of 9 Source: Mint Jutras 2014 ERP Solution Study Efficiency and intuitive navigation topped the list. The popularity of mobile devices like smart phones and tablets (reflected in the third category: easy access to ERP from anywhere, any time) has also served to raise the bar in terms of expectations. One measure of how easy ERP is to use is the percentage of employees within the company that actually use it. While for many, many years, access to ERP was limited to those doing data entry and a few “super users,” today the percentage of employees that use ERP has grown to 55%. This is a fairly consistent percentage across industries, size of company and other ways of categorizing our survey results, including top performing implementations that we call “World Class”… with one exception. For those operating in the cloud, running ERP as Software as a Service (SaaS), this percentage jumps to 63%. With the mobilization of the work force, the access any time, from anywhere nature of the cloud is a clear advantage. Not only are workforces more distributed today (Figure 2), but mobile devices also keep us constantly connected. Figure 2: Environments are increasingly distributed Source: Mint Jutras 2014 ERP Solution Study And that is why the ability to connect to ERP through a mobile device is even more important than many realize. Notice that in Table 1 the ability to access ERP data and functions is very close to the bottom of the priority list. This is a “World Class” Mint defines “World Class” in terms of the performance of ERP implementations. Survey responses are used to measure cost savings and other improvements since implementing ERP, progress made in achieving goals and selected metrics of current performance, metrics that can apply universally to any business. The top 15% in performance is categorized as “World Class” and the remaining 85% are referred to as “All Others.” The ability to connect to ERP through a mobile device is even more important than many realize…. This is a clear indication that survey participants under-‐ estimate the role ERP can and should play in communication, collaboration and decision-‐making. Can ERP Help Bridge the Generational Divide? Page 5 of 9 clear indication that participants underestimate the role ERP can and should play in communication, collaboration and decision-‐making. ERP can provide these capabilities but not by just lifting and shifting old ways of accessing ERP to a mobile device. Give a new mobile device to a millennial and he or she will find dozens of productive ways to use it. To get this “there’s an app for that” generation to use ERP on a mobile device, it has to look, feel and behave like other mobile apps. Give someone of the older generation the same new device, and it is just as likely to sit in a desk drawer. To get these baby boomers to use ERP on a mobile device, you need to deliver a user experience purpose-‐built to answer their questions and help them solve their most pressing problems. Today’s technology-‐enabled ERP solutions can, and in doing so also help bridge the generational divide. Older and younger generations may be drawn to these new user experiences for different reasons, but they will wind up in the same place, accessing enterprise data in real time and communicating from the same page. The conclusion? User experience is equally as important to both younger and older generations of workers. WHAT ABOUT THE SKILLS GAP? New ways of engaging with ERP, including engaging with mobile devices, might bring the older and younger generation together, but can it help address the skills gap that still seems to pervade the workplace? And yes, we do seem to have a skills gap. On June 11, 2014, the Wall Street Journal (and other sources) reported the number of job openings in the United States (U.S.) economy rose to its highest level in seven years. Yet while job openings have returned to pre-‐recession levels, hiring has not and economists think unemployed workers may lack the skills for many of the openings that are available. Of course these statistics are just for the U.S. but few countries around the world have a population more highly educated and skilled. Indeed the connectivity, collaboration capabilities and added visibility of newer ERP solutions hold the key to bridging this gap. The trick is to bring these two generations together in order to learn from each other. This is where the new “social” capabilities now being delivered by ERP solution providers can produce a synergistic effect with the result being far greater than the sum of the parts. Of course the term “social” has different connotations to the older and younger generations. The younger generation seems to operate from the principle of communicate early, communicate often. And this communication is largely electronic. They get answers from the Internet instantly, text their friends and colleagues constantly and are always in search of the latest in Older and younger generations may be drawn to these new user experiences for different reasons, but they will wind up in the same place, accessing enterprise data in real time and communicating from the same page. The connectivity, collaboration capabilities and added visibility of newer ERP solutions hold the key to bridging this skills gap. The new “social” capabilities now being delivered by ERP solution providers can produce a synergistic effect with the result being far greater than the sum of the parts. Can ERP Help Bridge the Generational Divide? Page 6 of 9 techno-‐gadgetry. So they immediately equate the term “social” to engagement, communication, collaboration and transparency. Mention “social” to a baby boomer and you get a far different reaction. While more and more they may actively engage on Facebook to share pictures of grandchildren and communicate with relatives and friends from a distance, from a business perspective it is a distraction, something that should be done on employees’ personal time. For the traditional businessperson accustomed to traditional means of communication, “social” has an unfortunate connotation. Traditionalists distinguish between a business event and a social event, between a business conversation and a social chat, between a business colleague and a friend or social acquaintance. Which is why the “social” tag is unfortunate, even though it is really just shorthand for new and improved means of getting and staying informed in a collaborative way. Yet by applying social concepts to ERP, you not only unlock the potential of those same applications, you also provide a means of bringing multiple generations together. Here are just some of the “social” capabilities being built into ERP solutions today. ENTERPRISE SEARCH: It is not clear exactly when “Google” became a verb, but that is exactly how many people use the term today. Looking for information, for an answer to a question? Just “Google” it. Wouldn’t it be great if you could do the same with your enterprise data within ERP? Next generation ERP solutions with social capabilities do this by incorporating a simple (to use) enterprise search capability. Don’t know exactly what you are looking for? Don’t know exactly where to look? What do you do? In the real world, you start searching and perhaps as you start to retrieve information, you refine that search. Why not apply the same principle to accessing data in enterprise applications? Search by customer, order, supplier, part or product, perhaps combining data residing in your enterprise applications with unstructured data available on the Internet. Without this level of search capability in ERP, users needed to know where and how different data elements and business objects were stored and this knowledge was dependent on technology skills. Adding an enterprise search function bridges that skills gap and allows users to work, discover and learn more naturally. CONFIGURABLE USER INTERFACES: Over the years ERP has progressed from hierarchical menus and tabbing through “forms” to point and click and drag and drop. Now as we also begin to bring these applications to mobile devices, touch screen technology is emerging. Those ERP solution providers that are truly providing modern, next generation ERP are employing a “mobile first” philosophy of design. If you Without “Google-‐like” search capability in ERP, users needed to know where and how different data elements and business objects were stored and this knowledge was dependent on technology skills. Adding an enterprise search function bridges that skills gap and allows users to work, discover and learn more naturally. Can ERP Help Bridge the Generational Divide? Page 7 of 9 allow individuals to choose the paradigm they are most comfortable with and customize it to their individual needs, you get everyone on the same page. Younger workers can use familiar interfaces and devices to build their knowledge of how the enterprise works while older workers are introduced to the ease with which they can connect to the business. PERSONALIZED WORKSPACES: These may be called dashboards, portals or even workspaces. Think of them as a home base of operations from which you can easily access the data and tools you need and use every day, all day. The power of a well-‐constructed workspace lies in blurring the boundaries between ERP and other enterprise applications, desktop tools like spreadsheets, email, instant messaging, alerts and more. You are able to reach out and touch any of these without closing down or minimizing one application before firing up another. As always, a picture is worth a thousand words. Click on a chart to drill down into further detail. The need to learn new “navigational” skills disappears. These workspaces are also a convenient place to insert that enterprise search button. These too should be easily configured and customized by role or by individual. PUSH VERSUS PULL: While all of these new consumer grade interfaces can be very valuable, they only deliver answers when interrogated. Younger, less experienced workers won’t even know what to look for. Older workers, aware of potential danger, may not know where to look. Why not have ERP deliver data to you without having to ask for it? In its most simple form, this could simply be in the format of an alert. Event management, which is the underlying technology that triggers an alert, is hardly new, but still not widely used. An event manager can be constantly searching for conditions or events that occur (e.g. a big order comes in) or fail to occur (e.g. payment of a large invoice does not) while you go about your business. Alerts can be delivered in any number of ways, but the most common today is still via email. While the exception management facilitated by these alerts is certainly a plus, executives and line managers can still be blind-‐sided by a notification that seemingly comes out of the blue. Of course in some cases the sensitivity level can be increased to give a warning, but think how much more valuable it would be to have the ability to monitor a stream of activity surrounding that big order or the efforts made to collect payment from that delinquent account. In order to do that, you need to be “following” the account. THE CONCEPT OF “FOLLOWING” Younger, less experienced workers won’t even know what to look for. Older workers, aware of potential danger, may not know where to look. Why not have ERP deliver data to you without having to ask for it? Can ERP Help Bridge the Generational Divide? Page 8 of 9 If you aren’t already a fan of “social”, the concept of “following” someone or something might not seem immediately familiar to you. But chances are, you are already following someone or something either in your professional or personal life. Perhaps you follow the stock price of specific companies, or you watch a stock exchange like NASDAQ or the Nikkei. Or maybe you follow the stats of your favorite sports teams. Maybe you do that through newspapers, online or using an app on your mobile device. Perhaps newsfeeds are delivered to you through email. Regardless of the delivery method, the objective is to stay informed. What if you could easily apply that same concept to your customers, orders or prospects? Let’s look at that big deal you are expecting to close. The sales rep has it on his forecast and his manager also feels confident. But if you really want to get a feel for the timing and the likelihood of closing the deal, today you probably pick up the phone and talk to the rep or his manager. But do you get the full picture? Wouldn’t it also be helpful to follow the trail of activity that has already occurred during the sales cycle? What if you could see the conversations or chatter between sales rep and manager? What documents have been delivered to the prospect? And what if this potential deal is with an existing customer? Wouldn’t you like to be able to scroll through the support activity over the past few months, including the calls, issues and resolutions? Has the customer experienced any quality or delivery issues? Have they been consistently paying their bills on time or is the outstanding balance over 90 days? Think what could be learned, potentially filling more of those information gaps that are only aggravated when you have a skills gap. COLLABORATION Simply aggregating all this activity and data and making it available to all interested and involved parties provides an environment conducive to collaboration. These tools can easily draw all parties into the conversation, sharing strengths and creating synergy. Younger workers are drawn into real business conversations and more mature workers can be guided through using these electronic means of engaging, sharing and collaborating. We are already seeing increased engagement with ERP at higher executive levels of the organization, but are they engaging collaboratively? Although the younger generation intuitively works collaboratively because they are always connected, we see few of these younger workers in top executive management roles. While of course, these higher levels are not necessarily older workers, there are few like Mark Zuckerbergs, (CEO before the age of 30) in the corporate world. Yet while we have made significant progress in top-‐level executives simply gaining access to ERP, we still have a long way to go before they are well equipped for collaborative decision-‐making (Figure 3). We need to give them Social capabilities can easily draw all parties into the conversation, sharing strengths and creating synergy. Younger workers are drawn into real business conversations and more mature workers can be guided through using these electronic means of engaging, sharing and collaborating. Can ERP Help Bridge the Generational Divide? Page 9 of 9 access directly from the mobile devices (which they all carry these days) and apply these social concepts in order to draw them into the real-‐time communication of the digital world. Figure 3: Level of Executive Access Source: Mint Jutras 2014 ERP Solution Study SUMMARY AND KEY TAKE-‐AWAYS Can new ways of engaging with ERP teach the younger generation the business while awakening the more mature crowd to the potential for new technology? The answer is a definitive “Yes!” Not only has ERP itself matured to better reflect and adapt to the changing business world, but new ways of engaging with modern, next generation solutions are emerging. Need to access data from anywhere, any time? There’s an app for that. Need to access it from your mobile device? Yes, there’s an app for that. Need to communicate throughout the chain of command, across the generational divide? Yes, there’s an app for that. The app is ERP. About the author: Cindy Jutras is a widely recognized expert in analyzing the impact of enterprise applications on business performance. Utilizing over 35 years of corporate experience and specific expertise in manufacturing, supply chain, customer service and business performance management, Cindy has spent the past 8+ years benchmarking the performance of software solutions in the context of the business benefits of technology. In 2011 Cindy founded Mint Jutras LLC (www.mintjutras.com), specializing in analyzing and communicating the business value enterprise applications bring to the enterprise.