Many large service providers are ramping up their SAP offerings. This is good news for SAP customers, analysts...
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say, but it puts the squeeze on independent SAP consultants.
Choice is always good for those looking to buy services, and large companies are moving to fill growing demand in the market for SAP services, according to John Madden, research director for Boston-based Ovum Summit.
"Services firms, outsourcers and global systems integrators are quickly moving to mobilize and market their SAP services and capabilities," Madden said. "[This] choice definitely puts customers in a more leveraged position when it comes to working with the right services firm."
For independent SAP consultants, on the other hand, news of large organizations expanding their services is a mixed bag at best, according to Jon Reed, SearchSAP.com careers expert and president of JonERP.com.
"Developments such as the latest offerings from HP and EDS have implications for reducing dependency on consultants or improving outsourcing options," he said. "The 'good news' of such an announcement varies based on where you sit."
Hewlett-Packard Co., of Palo Alto, Calif., recently announced expanded SAP services for upgrading to NetWeaver and outsourcing SAP application management. Shortly afterwards, Plano, Texas-based Electronic Data Systems Inc. (EDS) announced that it was expanding its SAP Global consulting practice and tightening its relationship with SAP. Madden expects this trend to continue.
"EDS, like many services firms, has a substantial amount of SAP experience and is moving to put it into a more unified practice in order to make it easier to sell their expertise to customers," Madden said. "IBM, HP, Accenture and others have already made similar moves."
This increased competition from larger players could cut into opportunities for the independent SAP consultant, according to Reed.
"Anything that streamlines the technical side of SAP, whether it's the automation of upgrades or the outsourcing of technical projects, impacts the need for on-site consultants," he said.
Some customers may also prefer to deal with one company for many of their IT projects, giving large systems integrators a further leg-up, according to Madden.
"Customers that are working with services firms for a large part of their IT (infrastructure, applications and other) might prefer to work with the same provider, because that provider knows the customer better," Madden said. "Many combine infrastructure and application modernization projects, so it makes sense that a customer would want to work with a provider that can do both."
How SAP consultants can help themselves
That is not to say the news is all bad for independent SAP consultants. While the increased competition from larger firms may affect the rates consultants can charge, lower prices and more choices could mean more SAP projects get green-lighted, according to Reed.
NetWeaver upgrades and companies looking to take advantage of service-oriented architecture (SOA) are boosting the number of projects, Madden said.
"There's plenty of work to go around at the moment, so independents could do just fine -- regardless of where they come from," he said. "SAP skills are in high demand and are hard to find these days."
There are also ways that independent SAP consultants can improve their chances at landing these projects. The first is to stay on top of the latest technology and SAP product releases, according to Reed.
"It's hard to outsource and commodify a new technical area," he said. "So when you stay ahead of the curve technically, you are less vulnerable to those types of trends."
Next, Reed suggested that consultants develop a broader, business process-focused approach to SAP, going beyond pure technology skills to develop their "big picture" knowledge in areas such as industry best practices and SAP's best implementation methodologies.
"Combine a strong skills niche with a big-picture understanding of how your particular SAP specialization helps a company's bottom line," he explained. "The end result of these two strategies is to make yourself more indispensable to project sites."