ERP as a protective shield against brain drain and shadow IT

Demographic change is increasingly becoming an operational risk for manufacturing SMEs. In the coming years, hundreds of thousands of experienced specialists and managers from the baby boomer generation will retire - often without an adequate successor. The loss of experience, process knowledge and informal procedures that have been built up over decades is particularly critical, rather than the mere loss of personnel.

«Many companies underestimate how much their operational stability depends on the tacit knowledge of individual employees. If this know-how is not systematically digitized and anchored in processes, a dangerous brain drain occurs,» explains Christian Biebl, Managing Director of ERP manufacturer Planat.

Brain drain refers to the loss of knowledge, experience and expertise when qualified specialists leave the company and cannot be replaced due to a shortage of skilled workers. In many medium-sized production companies, key operating processes have evolved over time. Knowledge about production parameters, material flows, special processes, supplier relationships or individual customer requirements often remains in the heads of long-standing employees - or in so-called shadow IT.

Shadow IT as an invisible risk

Shadow IT refers to software, cloud services or digital processes that employees or departments use outside of the ERP and company system without the approval of official IT. A typical example is private Excel lists of individual employees with business-relevant information that remain invisible to the company. The shortage of skilled workers is also exacerbating the situation: vacancies can often no longer be filled promptly or with equivalent quality. As a result, companies are faced with the challenge of making existing expertise permanently available, independently of individual people.

ERP as a digital corporate memory

In this situation, modern ERP systems are increasingly taking on the function of a digital corporate memory. «Today, a modern ERP system is far more than just administrative software. It maps processes, rules, decision-making paths and empirical knowledge in a structured way and makes this knowledge comprehensible and reproducible for new employees,» says Christian Biebl. In the manufacturing industry in particular, this creates a strategically important knowledge base that standardizes processes, reduces media disruptions and minimizes dependencies on individual people.

This is particularly important for IT structures that have grown over many years. Many companies still have proprietary legacy systems or individually developed stand-alone solutions whose functionality is often only fully understood by a few employees. These systems are often closely linked to individual IT managers or long-standing specialists. «The lifespan of some company software is effectively linked to the working lives of individual experts. Without timely migration to standardized ERP structures, there is a considerable risk for the future,» warns Christian Biebl.

Knowledge management as a productivity factor

At the same time, knowledge management is becoming a productivity factor. The more digitally documented, standardized and company-wide available processes are, the faster new employees can be trained. «The people in the company remain crucially important. But company knowledge must not be permanently tied exclusively to individuals,» explains Biebl. Modern ERP systems therefore create platforms on which production knowledge, process sequences, documentation and business contexts are brought together.

Added to this is the growing complexity in the industry. Production companies today have to switch flexibly between one-off production, small batch sizes and series production. At the same time, the requirements for transparency, traceability, supply chain management and resource efficiency are increasing. Without centrally available and consistent data, this becomes increasingly difficult to manage.

Human resources in the focus of ERP planning

The shortage of skilled workers is also fundamentally changing the role of modern ERP platforms. While the focus used to be primarily on machine capacities, today the efficient deployment of qualified employees is becoming more important. «In the past, the main thing was that the machine had to run. Today, it is also crucial that qualified personnel are deployed optimally and that existing knowledge is made permanently available,» explains Biebl. ERP systems enable the direct linking of production planning, personnel resources and process knowledge.

According to the Planat Managing Director, this development will continue to accelerate in the coming years: «SMEs are facing a profound generational change, while at the same time the number of available skilled workers is decreasing. Companies that do not systematically digitize their experience risk operational inefficiencies, rising error rates and productivity losses. Modern ERP systems are therefore increasingly becoming a strategic infrastructure against knowledge loss and skills shortages.»

Source: www.planat.de