With the industry at the mercy of intense global competition for construction IT talent, Walter Hume of Rimini Street discusses the potential impacts on digital transformation
It has been well documented that the construction industry is facing a significant skills challenge. Earlier this year, the Construction Products Association (CPA) estimated that since the summer of 2019 roughly 223,000 experienced workers, including half aged between 45 and 55, have left the industry. Clearly, this has a very broad impact on the ability to deliver projects, but as companies look to modernise and digitise their business models, we need to talk about the potential impact this brain drain could have on digital transformation in the construction industry.
Gartner has recently stated that around the world only 29.1% of IT workers have a high intent to stay with their current employer. If this is the pressure on staff retention at a macro-level, the industry is going to be at the mercy of intense global competition for construction IT expertise. One of the biggest dangers is not just hanging on to your best tech talent but also the skills and knowledge specific to the IT needs for the business that resides with them. The industry must spend time understanding their IT skills requirements (and accompanying gaps) and create a succession plan to source and retain the expertise they require.
Every construction business should be asking itself tough questions in relation to its IT capabilities. Looking ahead, senior executives should examine whether their teams are the experts with the skills necessary to support modernisation. If they aren’t, how best can those skills gap be filled? And just as importantly, what is the best way to continuously evolve and develop IT skills to ensure their companies keep pace with the rapid changes in digital technologies?
Transformation requires a single view of all the data in your business
If you spend time auditing the IT skills within your company and mapping them against the requirements to maintain your existing environment and support future transformation, it will be very apparent, very quickly, where your skills challenges lie. For example, we commissioned a study of CIOs which found that 53% of Oracle customers and 43% of SAP customers were using older versions of their enterprise resource planning (ERP) applications. Worryingly, 24% admitted they were unable to find the talent with such legacy technology expertise.
Aside from the obvious issue of who will have the knowledge to “keep the lights on” for these core business applications, there is a consequence for modernisation strategies. While ERP systems may perform mainly routine and mundane tasks such as managing payroll, processing supplier invoices and submitting employee expenses, they are the source of a lot of valuable information about the business. Extracting information from these systems is crucial, particularly if construction companies are to successfully embrace approaches such as Building Information Modelling (BIM). Being able to have a single, integrated view of all the data that resides in different applications across the business will be crucial to having confidence that BIM will be effective.
The challenge for construction businesses – like many in other sectors – is that they have built up their core enterprise application environments over many years, either through software adoption cycles or acquisition of companies. This has created a mishmash of different versions which is complex to manage.
Over time, experienced systems administrators and developers will have built localised “work arounds” and application interfaces to enable these versions to talk to one another. Where this becomes a skills headache is if the IT professional with the environment knowledge related to these integrations decides to leave. It could mean you are at risk of IT security vulnerabilities or a reduction in performance unless you can find the expertise to maintain these systems.
This is accentuated if you operate a hybrid IT environment with in-house applications working alongside Software-as-a-Service (SaaS) applications. SaaS applications are constantly updated so you will need to ensure the connectors between your existing ERP and these cloud-based systems remain up-to-date. If you don’t keep up it may mean your IT infrastructure is not able to evolve rapidly enough to meet the emerging demands on the business.
Decide what IT skills are critical to your transformation
This is where the skills question becomes even more important. If we are facing significant shortages, construction companies should not only be carefully planning how to implement their IT transformation strategies. They should also be mapping their IT skills requirements to meet these transformation goals – what we call skills succession planning. By identifying what expertise you will require, you can qualify how best to fill these positions. Most importantly, you must decide which IT skills are critical to your competitive advantage and decide how best to source them.
To give this proper consideration there are three key questions to answer:
- Is your company properly weighing up the IT skills required to fulfil your IT transformation alongside valuating the business impact of such change?
- Are you considering skills needed to support existing applications alongside next generation technologies?
- Does your company have the time and resources to invest in training staff on both emerging technologies and existing applications?
Managed transformation and skills succession planning
The goal of this analysis should be to help you to better understand the skills requirements of your business today and into the future. Fundamentally, it should be about buying you time rather than facing the massive disruption of trying to modernise all your existing applications in one go – what the IT industry calls “rip and replace”.
It will also avoid you having to go through the wholesale change of bringing in new tech skills to deal with a completely different IT environment. The more new skills you require, the greater the challenges you will face to fill such roles.
How you achieve a more measured transformation, which eases the demand for new IT skills, is by maintaining your existing ERP applications to ensure they remain viable and modern. This will give you the flexibility to transform your IT systems at the edge of your environment in a targeted way and ensure innovative applications integrate effectively with your core ERP applications.
It will also enable you to build a comprehensive succession plan in terms of the skills you need moving forward. As you decide which applications are strategic to the business, you can assess who the best qualified experts are to deal with those systems. It is not simply a case of deciding whether to hire or outsource but understand who is better placed to optimise applications and get the best out of them for your business. You must consider how best to continuously improve and update the skills supporting your current and future IT systems. Do you have the resources to ensure your team has the most current skills?
If you don’t have the capacity and expertise to ensure you have the right expertise, then you should be considering a partner. The right partner will not just maintain your existing systems but optimise them to ensure they support your transformation goals. You must see them as part of your skills succession planning, so you need to have confidence they are investing in the skills within their team. If you give skills planning the right level of focus and ensure that you build the strategy that can evolve with your business as it goes through its digital transformation, you will stand a better chance of protecting the technology expertise in your organisation and reducing the pressure to find new skills at a time of such intense competition for talent.
Senior account executive, construction
Tel: +44 (0)20 3763 7463