Enterprises undertaking digital transformations of their ERP, SCM, HCM, e-Commerce, or Customer Experience platforms are engaging system integrator partners (SIs), like Accenture and IBM, to support their programs. However, when evaluating these various SI partners, it is critical for companies to understand the current problems plaguing the SI world in order to form a comprehensive digital transformation strategy.
There are areas within all the SIs today where they are depleted of talent. As a result, enterprise customers need to be equipped to navigate the SI world when we are dealing with these “talent deserts.” Talent deserts are essentially an unavailability of a key competency or experience at a particular SI. In other words, the SIs are likely unable to provide talent that has the expertise in the key areas you need to run your program successfully if they are affected by these talent deserts.
What is causing these SI talent deserts, how are the SIs responding to this lack of talent, and what steps should your company take to protect your digital transformation and ensure success despite these?
What is Causing SI Talent Deserts?
There are several reasons why the major SI vendors find themselves with talent deserts. First, we have vendors like SAP rolling out new technology, whether it be SAC, BRIM or any other digital technologies that have been newly released.
In terms of talent, this means that because these offerings are new to the market, there is a limited number of trained experts on these technologies. While SI’s can train talent when deploying these technologies, the productivity that comes with experience is not available.
Next, about a year ago, the COVID-19 pandemic held back the start of big transformations. An abnormally larger number of these initiatives were launched, and many of them are now at peak staffing. We call this “The Pig and the Python” phenomenon, and while we expect this situation to resolve itself over the next few quarters, it is very real now.
The next cause of these SI talent deserts is the “Great Resignation” of talent from the SI space. It seems a lot of talent at the SIs grew tired of the extensive travel and decided to either pursue their own endeavors or pursue opportunities that were not as taxing as their previous roles. As such, there is less talent available at each of the SIs because they have moved on to other opportunities.
Finally, because of this lack of talent, all the firms are plucking from each other right now, creating a talent vacuum and leading to “talent poaching” between the vendors.
How are Vendors Reacting to SI Talent Deserts?
Considering these talent deserts, vendors have had to make shifts and adjustments to their practices to be able to deliver to customers. For example, vendors are investing in internal assets in order to automate certain capabilities within their firms. This effectively insulates the vendor from deserts happening again in certain areas.
Vendors are also no longer waiting for their new hires to come out of college with a degree. Instead, they are starting their own internal education programs and recruiting talented high school students to bring them into the marketplace early. As a result, there will be a certain amount of loyalty to those firms from these students as well as a difficulty for them to move away from these companies in the future without a college education and degree.
Additionally, vendors are spreading their senior talent across multiple engagements. The pandemic has allowed senior talent to work on upwards of 2-3 different accounts at the same time because they can show up in a remote capacity as opposed to having to be on-site for each engagement. Due to these more hybrid and remote environments, vendors no longer have to assign a senior-level talent to one account full-time but can rather spread their time over multiple engagements.
We have also identified an increased level of staffing “TBDs.” SIs are pitching teams and providing resumes of people that are “representative” to the type of people that will be assigned to the account even though these specific people will not necessarily be working on your transformation.
Lastly, as a trickle effect of all these reactions, SIs are looking to control demand by selectively raising prices in specific areas that are above and beyond inflationary patterns.
What Clients Can Do to Protect Their Transformations
The SI’s reactions to these talent deserts can have a direct impact on your digital transformation, making it critical for customers to know what the vendors are doing and how they can best protect themselves and their transformations. Below are a few of the ways customers can be proactive in ensuring their transformation is protected from the negative impacts of the talent deserts.
1. Require Certifications
One way to ensure that you are working with talent that understands the technologies specific to your project is to require certification on the various technical resources that are being applied. For example, you can set the expectation that the talent your SI is bringing in is SAP-certified. You can often flag whether talent is certified by simply looking at their LinkedIn pages.
2. Train Your Own Talent
You can also assess your own technology requirements, recognize that expertise on those technologies is scarce in the market, and decide to train your own talent on those new technologies to minimize exposure. This allows you to gain that expert level of knowledge you need when deploying these technologies without having to rely on a reluctant vendor.
3. Match the Vendor’s Reference Clients with the Vendor’s Proposed Talent
When the vendor comes to you and says that they have done this specific work at various companies, you can insist that the talent they provide you is aligned with their reference clients. We often see SIs claim that they have done this type of project at specific companies, but then offer you talent that did not work at those referenced companies.
In the end, you have no idea if this talent can do the work or not for your specific project. If you insist on lining up your talent with the SI’s reference companies, you can check the talent when you make the reference call and ensure that the talent has the experience necessary for a successful transformation.
4. Align Deliverables with Senior Talent
Within your contract, you can align specific deliverables with the talent that is supposed to produce those deliverables. This locks in the participation of those senior teams that you want working on your project because they have the experience necessary for a successful digital transformation.
5. Implement Full Vetting Sessions
As part of the RFP process, you can include full vetting sessions where you insist that the SI bring their full teams as part of the final “RFP gate” to closing the deal. These sessions allow the customer to vet that full team by interacting with the actual talent, not just the resumes of that talent.
6. Negotiate Strategic Contract Terms
Lastly, you can integrate terms involving key personnel, rate locks, and staffing incentives into your contract to either vet out whether the SI has this talent desert or, once you’ve locked in your vendor and identified the talent, secure that talent for the long run and not let it get filtered away throughout the project term.
Navigating SI talent deserts is no easy feat, but it is vital to the success of your enterprise digital transformations. Knowing how the various SIs are responding to these deserts and what you can leverage against those SIs as a result can make or break your evaluation criteria.
You must stay up to date on the state of these talent deserts, in addition to other SI and digital transformation trends, so that you can use that knowledge to update your SI evaluation processes and ensure you choose the right fit for your company’s goals.