A shortage of people with SAP skills is starting to push small and midsized companies that are implementing new...
By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
ERP systems toward other vendors, specifically Oracle and Microsoft, according to a new AMR Research report.
This shortage also means that companies that already run SAP, especially those in the Northeast and the Midwest, where the SAP skills shortage is most severe, will be relying more on third-party service providers for support and should expect to
"There's kind of a tipping point, where perhaps other solutions look more attractive," said Dana Stiffler, research director at Boston-based AMR Research.
"Companies will really need to rely on consultants and outsourcing firms to do a lot of this going forward, and focus internally on whatever it is their business needs to do with these applications going forward," she said.
Over the last 12 to 18 months, service providers told AMR that their SAP business was limited only by their ability to find, train and place appropriate resources.
"We noticed that their SAP practices were growing by leaps and bounds," Stiffler said.
Meanwhile, she said, AMR manufacturing and retail clients are placing more weight on "availability of resources" when selecting ERP software.
With that in mind, AMR started searching for SAP careers on Monster.com.
Researchers found that in the month of August alone, there were 960 SAP job openings in the Northeast and 1,180 in the Midwest, the report says. That's compared with 470 Oracle job openings in the Northeast and 360 in the Midwest. The SAP skills shortage in these two regions is probably more pronounced because they are heavy manufacturing areas, Stiffler said.
While the disparity between the two ERP giants was less pronounced in the Southeast, West and Pacific Coast, SAP still had 340 openings in the West, versus Oracle's 280. SAP had 400 on the Pacific Coast, versus Oracle's 310. And SAP had 300 job openings in the Southeast, against Oracle's 200.
"Unless the striking variance in skills availability is eliminated, Oracle will become an increasingly attractive option relative to SAP," the report reads. "Cracks in what has essentially become a two-party system may emerge."
SAP skills in highest demand were experience with SAP's core ERP applications -- mainly financials, Stiffler said -- strengthening the claim that the skills shortage could hurt SAP's midmarket business the most. SAP's goal is to win 100,000 customers by 2010. To achieve that goal, it's focusing much of its attention on winning small and midmarket customers with its SMB suite -- Business All-in-One, Business One and Business ByDesign.
Small and midmarket companies are also driving ERP spending by buying full-scale ERP systems for the first time.
One of the factors making SAP's skills shortage more severe, Stiffler said, is the tendency of even small and midsized companies to customize their SAP ERP software to some extent, which requires more resources and which buyers of other applications seldom do.
The skills gap is also becoming one of many factors pushing customers toward Software as a Service (SaaS), which is more easily deployable, she said. The rollout of SAP's SaaS ERP -- Business ByDesign -- was scaled back in the spring because SAP claimed it needed more work.
For its part, SAP still considers the skills shortage "a high-class problem," as SAP executive Bill McDermott called it -- the result of a strong demand for their software. Oracle won't gain advantage because of the skills shortage, SAP spokesman Andy Kendzie said.
Earlier this summer, SAP said it needed another 30,000 people to implement and run its applications.
SAP plans to add 23,000 skilled professionals through its partner channel, Kendzie said. The company is also making strides through the University Alliances program, which is focused on training students on SAP in college.
"What we're really trying to do is fill this pipeline with the talent and resources we're going to need in the next five years," Kendzie said.
And according to Stiffler, SAP is doing pretty much everything it can to remedy the shortage.
"I think they're doing as much as they possibly can," she said. "But in order to meet this demand, they have to be more aggressive in pushing out a creative delivery model," for buying, implementing, delivering and managing the software.
But some consultants, like Jon Reed of the consulting firm JonERP.com, still doubt there is a true skills shortage. He said it's less of an SAP skills shortage and more a problem of companies not wanting to pay SAP professionals for those skills, plus a lack of people with specific skills, such as NetWeaver.
"Why do I hear from people all day long who are certified and can't get work in SAP? These skills shortages are not across the board," Reed said. "They're concerned they can't hire people as part of their in-house teams. And then the cost of implementation goes up."