Mint jutras

November 2015

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Those running outdated ERP applications might be puzzled by the assertion that such a solution can bridge the generation gap or address a skill deficit.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 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

Key Takeaways üWhile 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

ü The connectivity, collaboration capabilities and added visibility of newer ERP solutions hold the key to bridging generational and skill gaps

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, drawing all parties into the conversation, sharing strengths and creating synergy

Can ERP Help Bridge the Generational Divide? of 11

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. For many years “fit and functionality” was, by far, the top selection criterion. The Mint Jutras 2014 ERP Solution Study, and other prior year studies asked participants to prioritize individual selection criteria (Table 1) on a scale of 1 to 5. And we observed a change.

Table 1: Selection Criteria

Source: Mint Jutras 2014 ERP Solution Study

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 2015 Enterprise Solution Study, which investigated the goals, challenges and status and also benchmarked performance of implementations of software used to run the business.

Almost 400 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


While fit and functionality still had the highest percentage of participant votes for “must have/most important,” ease of use took 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.

But the results were so close we wondered what would be the priority if respondents had to choose. So in 2015 we changed the format of the question, again listing the different criteria, but this time consolidating to 10 criteria and forcing the participants to stack rank them from 1 (least important) to 10 (most important). Given the preoccupation of industry influencers with “user experience”, we also changed “ease of use” to “user experience” and substituted some of the prior criteria for new factors which had risen in importance in our research. The overall results are clear. The top three criteria are all related to features and functionality.

Table 2: Selection Criteria Priorities Stack Ranked from 1 to 10

Source: Mint Jutras 2015 Enterprise Solution Study

User experience is still in the top half, but when forced to choose, it fell in importance. “Ease of use” is an important element of the user experience, and in fact is often viewed as synonomous. But “ease of use” means different things to different people, particularly across generational boundaries. Mint Jutras suspected this was very much the case in terms of both the definition of ease of use, as well as the prioritization of selection criteria. So in 2015 we also captured the year in which our survey respondents were born, in order to categorize them in the most popular vernacular of “generations.” The results were quite interesting (Table 3).

We can make several interesting observations from this comparison. Not only do the priorities of baby boomers differ quite dramatically from those of millennials, but we also see less consensus from this youngest generation.

Selection Criteria Priorities 2015

Survey respondents were asked to stack rank the different selection criteria from 1 (least important) to 10 (most important). They were not allowed to have two ranked at the same priority, forcing them to decide on the order of importance.


Table 3: Selection Criteria Priorities Stack Ranked by Generation


Note: Top priority is shaded in light green

Note the differential between the criteria with the highest and the lowest scores across each of the three columns. Fit and functionality is clearly at the top for baby boomers (and Gen Xers) and “social” capabilities are clearly at the bottom, with a difference in scores of 4.3. Surprisingly, social capabilites were also at the bottom for millennials, but there was only a spread of 1.5 between the bottom and the top. And at the top of the millennials’ list was the quality of built-‐in reporting and analytics… perhaps because without this built-‐in capability, these younger workers might not be able to garner real meaning from the enterprise data.

But what some might find most surprising is that millennials seem to place less value on the user experience than both of the older generations. While on the surface this might seem puzzling, since these are the workers balking at the green screens and clumsy interfaces of old. But this is far less surprising when you realize that millennials define “ease of use” differently than those with more experience.

Survey respondents were asked to select the top three most important aspects of “ease of use.” While baby boomers and Gen Xers define it first and foremost in terms of efficiencies, millennials are far more likely to simply equate it to the visual appeal of the user interface (Figure 1). While baby boomers equate efficiency to intuitive navigation, millennials take intuitive navigation for granted. They have never used software that required a user manual. To them, a visually appealing user interface, which was at the very bottom of the priorities for baby boomers and GenXers, is most important.

Defining the Generations

Survey respondents were placed in the following groups based on the year they were born:

üBaby boomers: born between 1943 and 1964

ü Generation Xers: 1965 to 1981

üMillenial: born in 1982 or after


Figure 1: Defining Ease of Use by Generation (top 3 factors)


There is an important lesson to be learned here. Most companies have representatives of all generations using ERP. For it to be most effective in helping you bridge the generational divide and fill the skills gap, you can’t settle for pleasing some of the audience all of the time, or all of the audience some of the time. You need to please (and engage) all users all of the time. “Beautiful software” and simplicity, functionality and efficiency are equally important. Navigation throughout must be intuitive for all generations, including both those anxious to get rid of old cheat sheets and guides, as well as the younger generation that takes intuitive navigation for granted.

Results from our ease of use question tell us that the different generations appreciate (or not) easy access to ERP any time from anywhere about equally (33% to 38% placed it in their top three). But if we look back at Table 3, we see that millenials are more likely to connect the dots between the cloud, their mobile devices and this instant access… especially the cloud. “Cloud options” for ERP ranked number two in priority (behind quality of built-‐in reporting and analytics) for millennials, while cloud, mobile and social rounded out the bottom three for baby boomers.

These digital factors weigh heavily on how millennials learn today. Back when the baby boomers were just starting out (and had a lot to learn), they were surrounded by more experienced workers, in the physical sense. But today we often work in a virtual world of telecommuting and distributed environments. We find 80% of the companies participating in our Solution Study operate in multiple locations (Figure 2), and this doesn’t even reflect the workers in home offices. Even smaller companies face this challenge. These less experienced

To be most effective, you can’t settle for pleasing some of the audience all of the time, or all of the audience some of the time. You need to please (and engage) all users all of the time.


workers can’t necessarily walk across the aisle for assistance. Instead, they reach out electronically. So it is critical that those with more experience are also connected to that virtual network. But both need a transportation vehicle to support communication and transmit data throughout that network. This is where ERP comes in.

Figure 2: Environments are increasingly distributed


And since most millennials view their mobile devices as a lifeline to the rest of the world, this is just another reason why the ability to connect to ERP through a mobile device is even more important than many realize. Notice that for all but millennials, this was second from the bottom of the priority list. And it wasn’t that much further up the list for the millennials. This is a 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 dumping 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

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.

Company Size

In Figure 2 company size is determined by annual revenue.

ü Small: annual revenues under $25 million

ü Lower-‐Mid: $25 million to $250 million

üUpper-‐Mid: $250 million to $1 billion

ü Large: revenues over $1 billion


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?

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 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.

Yet it would appear that baby boomers are not alone in missing the connection between “social” and ERP. Social capabilities was at the very bottom of the priorities of all three generations, albeit more dramatically so with the more mature crowd. And yet when we identify what some of these capabilities actually are, we get a very different response. Sure enough, all the social capabilities that vendors are busy adding to ERP are more often viewed as useful or “must have” than just “nice to have.” And 10% or less indicated they would not use the capability if available (Table 4).

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.

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.


Table 4: Are these “social” capabilities useful? Shhh…don’t call them social


You might be wondering if this too varies by generation. The answer: Not as much as you might think. The only capability that was valued significantly more highly by millennials was the ability to capture a conversation and associate it with a business object (e.g. a customer, an order, etc.) But remember, millennials are very accustomed to carrying on a conversation electronically, so making the mental leap to capturing the conversational trail is not a very big leap. For a baby boomer it may well entail redefining what is meant by a “conversation.”

YES, ERP CAN HELP. BUT NOT JUST ANY ERP

By now, you are probably thinking, that perhaps ERP can in fact help bridge the generational divide and fill some of the skills gaps we experience today. But not every ERP will be able to help. It takes a certain level of feature functionality, coupled with enabling technology. Below you will find some of the next generation capabilities required, including those that might be called “social.”

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, or 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 need to know where and how different data elements and business objects are stored and this knowledge is 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 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

Without “Google-‐like” search capability in ERP, users needed to know where and how different data elements and business objects are stored and this knowledge is dependent on technology skills. Adding an enterprise search function bridges that skills gap and allows users to work, discover and learn more naturally.

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?


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” 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,

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.


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. The majority of companies surveyed (81%) claim all executives have direct access to ERP. But do they engage on a regular basis and are they engaging collaboratively? Although the younger generation intuitively works collaboratively because they are always connected, baby boomer executives are more likely to simply make “an executive decision.”

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. We need to give them 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.

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 40 years of corporate experience and specific expertise in manufacturing, supply chain, customer service and business performance management, Cindy has spent the past 10 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.

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