I had yet another of what has become a semi-annual discussion with an HR Technology friend that runs all the HR Technology systems for his shop - Payroll, Benefits, etc. for a medium size organization.
Flickr - guppiecat
They run one of the major Enterprise Resource Planning (ERP) solutions for all their HR Technology, and the ERP also supports Finance and Logistics. The solution has been in place for over 10 years, and has undergone 3 or 4 major upgrades in that time.
Over the 10 years when considering license, maintenance, upgrades, hardware, and labor, this organization has easily $10 - $15 million into this platform. Normal processing works perfectly fine, the payroll runs, employees get enrolled in benefits plans, etc., some manual processes have been automated, but no real 'transformative' HR technology has been implemented.
Why is this important?
My friend, the HR Tech person, has been advocating for the last few years the implementation of new technologies for two of the main organizational 'pain points' : Recruiting and Applicant Tracking, and Performance Management. He (correctly), has determined that there are numerous third party solutions available offering far superior functionality, user experience, and configurability that the related functions in the ERP suite.
He has articulated a plan, documented his strategy, and prepared a solid business case for these projects. Sure, there are cash expenditures and internal labor costs for these projects, but they are reasonable, and since the solutions he has recommended are delivered in Software as a Service (SaaS) mode, there are not any massive, up front capital expenditures.
Unfortunately for my friend, and for his organization he has been unable to proceed on these projects. And the reason for the decision is not completely what you think, it is not purely financial.
It is rather a more philosophical issue that can be summed up as follows:
'We are millions of dollars in to this system, and it already has the functionality we need? No way we are bringing in another technology'.
This organization, like many others, is in the ERP Trap. So much time, money, and internal investment into a solution that it can paralyze the organization from moving forward on any 'non-ERP' related HR and workforce technologies. A technical decision made, in this case over 10 years ago, continues to have repercussions today.
This part gets kind of gross
You have all heard the old legend that a coyote that gets caught in a steel leg trap will eventually chew off their own leg in order to escape. But the coyote, when trapped, does not immediately begin gnawing on its own leg. That is a crazy, and quite painful reaction.
No, the coyote waits, and only after the leg has gone numb, and all other possible escape options have been evaluated and discarded, does it take extreme measures to free itself from the trap.
Back to my friend's organization. How long until it goes 'numb' before it makes the decision to break free from the ERP trap and stop letting a decade-old decision drive today's critical workforce technology decisions?
How bad does it have to get before they are willing to do whatever it takes to get out of the trap?