ERP Training: Why Hiring Contractors isn’t the Cost Effective Option

The market for enterprise resource planning (ERP) is booming, as organisations across all industries continue on their paths to digital transformation.

Despite this, many ERP implementations fail to live up to expectations – one commonly cited figure is that between 55% to 75% of all ERP projects don’t meet their objectives¹. There are several reasons for this, but one key problem is around end-user training.

Eighty-six percent of organisations have experienced delays in rolling out ERP integration projects. Nearly half (48%) cite a lack of integration expertise as their biggest challenge².

Too many companies take the view that ERP implementation begins and ends with commissioning the ERP system, and that ERP training is an optional extra. The reality, however, is entirely different. A successful ERP implementation requires an effective end-user training plan from the outset – especially given the diversity and complexity of the ERP landscape.

There are numerous examples of what can go wrong when employees aren’t trained correctly – which can result in significant costs to the business.  At Optimum, we have seen:

• Organisations not being able to ship goods
• Production planners which were trained too late and did not interpret suggested purchase orders, and so were unable to fulfil customers’ orders
• A facilities team which didn’t trust new handheld technology, so building repairs and maintenance worsened

Additional reading: For more resources on the planning and implementation of ERP end-user training, check out our free guide and templates — The ERP End User Training Plan Toolkit

ERP Consultants and Contractors: Knowing the difference

Even companies that understand the importance of ERP training can end up making decisions that can prove costly. For example, in many cases organisations must choose between partnering with a training consultancy or working with contractor trainers. This decision alone can play a major role in the success of an ERP implementation. So, what’s the difference between a training consultant and a contract trainer, and why is it so important to differentiate?

Put simply, a consultant provides professional and expert advice to businesses that lack the required in-house knowledge and expertise for a specific project. The service provided is usually linked to a defined outcome with agreed milestones or deliverables, and the supervision of the people involved is the responsibility of the training consultancy (or shared with the client).

ERP Training Contractors, on the other hand, are employed by a business to perform a given task or project. The contractor is under the client’s direct supervision. As a result, the client is responsible for managing the contractor’s work risks, including quality assurance, timeliness of delivery, and general performance management.

Clients will generally pay for a set amount of time from their contractor. Contractors typically spend no more than six to nine months on one project, although it is often in their financial interest to make it last as long as possible. Familiarity can make a contractor ‘part of the furniture,’ and they can be retained, even when the organisation’s initial needs have passed.

Hidden costs

So why do organisations choose to work with contractors? One common misconception is that contractors will be cheaper than using a consultancy. But if you look beyond the initial day rates, there are many hidden costs to both the top and bottom line than come with hiring a contractor.

One major downside of that that is contractors usually demand a 6-12 month contract, so are less flexible. ERP projects are always subject to change and timelines frequently shift, and there is often downtime when the system isn’t ready.

Organisations may feel they have to onboard contractors early in the process to be part of the project team kick off, and really understand the depth of the system configuration. But an experienced training consultant with an intimate knowledge of numerous different industries, workstreams and systems only needs to understand the unique elements of the project, which include the business processes. They don’t need to lift the bonnet and understand the engine; instead, they teach teams how to drive the vehicle.

Here, a consultancy is likely to be more cost-effective over the duration of a project as you only pay for the days you need. There is minimal downtime as an agreed amount of time will be negotiated before the beginning of any given project. This allows them to work the hours required by the client in order to meet their deadlines. Plus, with an ERP training consultancy you can offboard your team and reboard when ready.

A real-life example: at Optimum we had a client, an energy company in the UK, which decided to hire four ERP contractor trainers a full year before its new system was set to go live, at a rate of £550 per contractor, per day. With the contractor starting to develop training materials before the system went into testing, they ended up constantly reworking the materials after each test cycle. The end result was inconsistent and unfinished material and a loss of confidence within the team.

Optimum was able to come in and fix the problems, and deliver the required training, but it impacted the client’s return on investment (ROI), as they ended up spending a great deal more than it anticipated by opting to use contractors.

Inconsistent quality

Elsewhere, hiring contractors can result in varied quality, especially when they don’t follow the same methodology. This result in the outputs not being consistent. Optimum consultants, meanwhile, follow the same methodology and templates so all ERP training deliverables produced look the same. This can be the difference between getting the project done well and just getting the project done.

And if something happens with a contractor during a project – if they become ill or unable to work for some reason, project progress will be significantly impacted. Even worse, if the contractor’s circumstances change, their experience and knowledge can walk out the door. With an experienced training consultancy, the work would be moved to another member of the team.

Ultimately, ERP training consultancy’s such as Optimum have a pool of expertise to provide insight and resources, and bring a pre-defined, proven, and structured approach to any ERP project. While at first glance it may appear that hiring contractor trainers is the better value option, in the long-term it may prove costly to your project and ultimately, your organisation.

Optimum is here to help

Working alongside consultancy partners like Optimum is ideal for planning, implementing, and delivering a robust ERP end-user training timeline. We enable clients to gain the support of an experienced consultancy and the benefits that entails.

We can provide flexible, high quality and tailored training solutions, often working alongside and supporting internal training teams, and help to upskill internal teams for delivery. Optimum also offers a very short cancellation period to our clients. In contrast, training contractors often work to a fixed-term contract, and are therefore harder to offboard and more likely to get paid for minimal work when your training requirements change.

No ERP project is ever fully complete. Having an experienced partner on hand who understands that and can help with refresher training, new joiner programmes, and upgrade training support is always worth considering.

Get in touch today and find out how we can help with your user adoption requirements.

¹ Deliotte – Top 10 ERP Challenges Report

² Opentext – ERP integration and transformation