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SAP firms struggle to find experts

With the labor pool drying up, consultants and third-party service providers are having trouble finding the right talent for their clients' projects.

Companies are having trouble finding the right expertise when starting some SAP projects, and if the trend continues,...

the result could be costly project delays, according to analysts at AMR Research Inc.

What is happening here is that people with a lack of upgrade knowledge or people without post-production skills are falling behind the latest technology.
Azmath Khan,
director and SAP consultant3Core Systems Inc.

The gap in expertise is putting pressure on consultants and third-party service providers to find the right experts to run SAP projects. The talent pool for SAP pros is lacking in a number of areas, including SAP Business Warehouse, SAP Customer Relationship Management, and SAP Product Lifecycle Management implementations.

"Providers are hard pressed to bring the resources to the client," said Dana Stiffler, research director at Boston-based AMR. "Even globally, we're seeing a lack of technical skills."

SAP skills will generally continue to be in high demand, Stiffler said. AMR and other research firms have projected an increase in spending on ERP projects in 2006, and companies are following through. The average IT budget is projected to increase by more than 14% in 2006, according to AMR.

"We do see some big upgrades going on," Stiffler said.

SAP itself is also driving demand for experts. It has been urging its customers to upgrade to the latest version of its software, mySAP ERP 2005. NetWeaver, SAP's application and integration platform, is at the core of the company's strategy to build out an ecosystem of composite applications around the architecture. And, as SAP is more aggressively seeking to sign deals against competitors Oracle Corp. and Microsoft, analysts and job experts predict the labor pool will continue to dry up.

SAP firms are also building out their application portfolios and developing more complicated architectures, requiring experts to help ease growing pains. One way for companies to meet the mounting challenge of finding expertise, Stiffler said, is through a multi-service provider strategy.

Using multiple service providers reduces the risk of cost overruns and delayed projects caused by a lack of expertise.

"Given all the activity going on with SAP right now, even the very large service providers are having trouble getting clients sufficient experts," Stiffler said.

SAP Consulting Services, the software vendor's own support organization, tends to be more expensive than a third-party support provider, according to Stiffler.

"If you're looking for a skill set that might go outside of SAP, such as integrating to a third-party application," she said, "there's no guarantee that SAP Consulting Services is well equipped to go beyond SAP."

And since companies are working in hybrid environments, third-party service providers are looking to fill the gap left by SAP Consulting Services.

Consultants are needed in a variety of areas, including SAP Exchange Infrastructure, SAP HR, and compliance, according to Azmath Khan, a director and SAP consultant with Lombard, Ill.-based 3Core Systems Inc. Basis administrators are scarce, Khan said, and a lot of SAP pros are not trained or certified on tools that address regulatory compliance.

"What is happening here is that people with a lack of upgrade knowledge or people without post-production skills are falling behind the latest technology," Khan said. "This puts pain on our clients' projects but also on us as we accumulate a talent pool."

3Core has about 50 consultants, but it also has what Khan calls a "small offshore augment team in India" to make up for the lack of U.S.-based talent. But India isn't always the right answer, Khan said.

"I've been in India for three months interviewing, and not even one was qualified," he said. "People are getting trained in India in a crash course and trying to get assignments and accomplish tasks to help their resume."

Mike Vaughan, a recruiter with North Carolina-based SAP consultancy Apple Berry Enterprises LLC, said he's seeing the hiring cycle fluctuate throughout the year. Although Apple Berry is successful in placing SAP pros in permanent positions, Vaughan said, it can sometimes be difficult to find the most qualified experts.

"You'll find a group of companies that have a need in a specific area all at once," Vaughan said. "It depends on the market, but it can be difficult to find the right talent when you're hit all at once."

Vaughan said that while he encourages his clients to use his services to tap his network of SAP candidates in the Atlanta market, he knows his clients will use employee referrals and other job recruiters to get by.

"Networking with your candidates is really how to find the best people out there," Vaughan said. "The job boards are becoming unreliable for the best talent."

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