If your IT manager is on the cusp of retirement, do you keep him or her on because they know your MRP system - or do you upgrade both?
Many manufacturers who saw the merit of MRP and ERP systems in their infancy are facing awkward strategic decisions – and it's all down to demographics.
More retirees but less money
The number of Britons of state pension age is projected to soar from 12.3 million in 2012 to 16.1million by 2037.
That whopping 31% increase has created some difficult choices . . .
The pre-recession boom in the property and equity markets should have left most baby boomers facing a comfortable retirement, looking forward to their time in the sun.
BUT
with interest rates at a record low in the UK, the value of their savings is being steadily eroded by inflation, forcing many to work into their late sixties and beyond.
Putting more money into their retirement 'pot' is far more appealing than it would have been a decade ago.
Reaching the end of the road?
Rising life expectancy is also changing perceptions about the 'right time' to stop work.
- For a male baby boomer born in the 1950s, his likely lifespan was predicted to be in the late sixties.
- Now though, the Office for National Statistics says the average 65-year-old man can expect to live for 18.5 years and a woman of the same age for 21.1 years.
Knowing that you are likely to live to an older age makes it more appealing for individuals to carry on working for a little longer.
At the same time, there is a parallel 'age' issue for many manufacturing SMEs, who installed ERP systems during the 1990s, and now realise that their system is fast coming towards the end of its useful life:
they are deciding how to upgrade or customise their system just as their IT manager is mulling over their own future.
Facing the future
Manufacturing firms, especially SMEs, are notoriously bad at succession planning.
In fact in December 2013, the Manufacturing Advisory Service launched a 'Finance Expert' service, to address such issues as staff retention and replacement.
It's easy to understand the temptation for under pressure management teams to keep their long serving IT manager on past official retirement age, but they are building in three major problems:
1. The IT manager might just reverse their decision and decide to leave.
2. The IT manager’s natural instinct might be to work with the system they know.
3. Not upgrading your MRP/ERP system can hinder the growth of your business in future.
Finding the way forward
If you are considering upgrading your ERP system, there may be merit in asking your IT manager if they would like to work a couple of days each week after their official retirement date. This would allow them to mentor a new recruit in the ways of the company and the advantages/disadvantages of the existing system, before deciding on how best to make the change.
Remember:
- Do not ignore the fast approaching retirement date of your baby boomer IT manager.
- Examine whether your ERP/MRP system is also reaching the end of its working life.
- Consider the mutual benefits of keeping on your baby boomer IT manager in the short-term while also implementing the changes necessary for the future.
Topics: MRP
