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mySAP Career Interview Classics

Starting in 2000, Jon created the online content for mySAPcareers.com. This was a time of great transition in the SAP market - the beginnings of the applications that are now called the SAP Business Suite, the emergence of the EAI market that is now heading in the web services/eSOA direction.

For mySAPcareers.com, Jon conducted a series of in-depth, landmark interviews with senior-level consultants across the SAP product line. Now, on JonERP.com, we're pleased to present the best of this content, which is available only on JonERP.com. Jon will be adding updated introductions to all the articles in this section to frame them further in today's market. Enjoy!
A Look Back at Jon Reed's "State of the SAP Market" 2002 Print E-mail
Article Index
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Where Do We Go From Here?
A Look Back at Jon Reed's "State of the SAP Market" 2002

Where Do We Go From Here?
A Look Back at Jon Reed's "State of the SAP Market" 2002
Part One
February 25, 2002

It's not an easy time to be an SAP consultant. The contract market has gotten much tighter as companies pull more work in-house and postpone major SAP upgrades. By now, most of us thought that we'd all be working in sexy areas like BW, APO, and SEM. But we're still waiting for the major installations that will fuel consulting demand in these new areas. Caught between the old back office ERP work and the new e-business work that has yet to emerge, SAP consultants are asking themselves some tough questions: "Do I stick with this bread-and-butter work as long as I can?" "Do I keep pushing for new mySAP certifications, or do I quit on independent contracting and take whatever perm job I can find?" "Is now the time to give up on SAP entirely?" "Are the hot rates of yesterday gone forever, as I always suspected they would be?"

The SAP career crossroads can be a lonely place, and clearly, the overall economy is not making the situation any easier. We're in choppy, unpredictable waters - one day the shoreline of economic recovery is clearly in sight, the next day it's obscured by an Enron debacle or some other unwelcome development.

Most of us thought that as soon as SAP finally delivered the right e-business functionality, we'd be on our way. But rudimentary early versions of products like BW and APO have evolved into robust releases with powerful back office integration, and companies still aren't buying. So what do we do? Do we stick with where the jobs are now, or do we keep holding out for these new consulting markets to develop?

There are no easy or definitive answers to these questions, but they're all important enough to warrant a full-fledged inquiry into the state of SAP, so that's what we've prepared for you here. We recently sat down with Brian Trout, the an SAP staffing expert, and got his bird's-eye view on what companies are telling him and what kinds of SAP openings he's staffing out there. Looking ahead, we get Brian's take on what SAP has done wrong, what they've done right, and where he sees the market going. Our goal with this article was not just to dissect the current SAP market - we want to provide SAP consultants with a roadmap for what we're seeing out there and break down the kinds of career strategies that make sense.

As you read through our discussion, you might be surprised by how many positive signs we're seeing for SAP, despite the overall economic slowdown. In a strange way, the economic recession has further strengthened SAP's position in the ERP and e-business software markets. Those of us who can find our way through the current challenges will be in a position to capitalize on what SAP is quietly building. SAP is not unlike that classic overlooked stock that investors are looking for - the market may not seem be in SAP's corner, but SAP's fundamentals still look sound (we're not commenting on the stock price here, you're on your own with that!).

We know that everyone in the market is experiencing different and unique situations, so we look forward to hearing your comments regarding our appraisals. We know some consultants who still have all the work they can handle, and we know other equally capable consultants who've been on the bench for three to six months. This is an uneven market that is rewarding some folks and not others, and there's not necessarily a lot of fairness in how these scenarios are playing out. Our goal is to provide you with an overall sense of how we see the current SAP market, so that however you are faring out there, you'll have a better take on the trends that are going to impact all of us. We hope you'll keep in mind that we're just providing one perspective on SAP - our opinions and comments are solely our own and are provided in the hopes that they will be of real use to you in your SAP career decisions. We are not intending to criticize any individual career decisions here - we're simply trying to call attention to issues that everyone in this market needs to reckon with. Good luck out there and stay in touch.

Jon Reed: Brian, let's have a no-nonsense talk about the state of the SAP market, and how SAP consultants should respond to these market conditions. I don't know if you agree, but right now, the SAP market seems to be a little deceptive. On the one hand, there aren't a lot of good SAP positions out there, so you get the message that you should take whatever SAP project you're able to get your hands on. But on the other hand, when we learn about all these new SAP and mySAP technologies that SAP is pushing, you get a very different message: you get the sense that if you just stick with what you know and don't try to upgrade your skills, at some point soon, you're going to find yourself on the bench and out of the loop with some pretty key technologies. Do you think that's a fair assessment?

Brian Trout: Yeah, I do. There are all kinds of different things going on with SAP right now, and every company that's running SAP has a different approach. Some companies are spending on new technologies in a freewheeling manner, others are sitting on 3.1i and waiting this economy out, and then of course there are a lot of companies in between these two extremes that are doing different things. But the prevailing tone of the SAP market is one of hesitation on the part of SAP's clients - most of them are just not ready to devote significant resources to enhance their SAP environment, regardless of how appealing SAP's new mySAP solutions might be. Of course, this cautious spending climate is basically the result of the economic slowdown which we are all well aware of.

But there's an interesting undertone I pick up on when I talk with these same companies: I think there's a clear acknowledgement across the board that this spending hesitation is not in any way shaped by a reluctance to accept SAP's technology. In other words, the mySAP product line is really becoming quite robust. The strides SAP has made on APO, with version 3.0, seem to very positive, and CRM 3.0 is getting very solid feedback from those who have put it in and are looking at it. There are a lot of bugs in these new mySAP (formerly "New Dimension") apps as you might expect, but there is also a huge wave of potential opportunity out there when you talk about mySAP blending in with R/3.

For example, Employee Self-Service (ESS) in the HR area is web-based functionality that's getting a lot of play. With a Workplace server, you can create an ESS solution, whereby you're putting ESS functions out there for thousands and thousands of employees. Now, all these folks suddenly have access to this functionality, even though they didn't otherwise use the SAP system via a corporate Intranet. These people probably don't even know that it's SAP that they're using to perform these functions, it's just something that they access through their corporate Intranet in a Workplace environment. Now all of a sudden, they're accessing their benefits, putting in their time and attendance information, accessing their 401K, and all that. Things like ESS further solidify SAP's position at the center of the IT needs of a big business. There's a lot of cool applicability in terms of how the mySAP and New Dimensions apps are inter-relating with R/3 to really make things happen for companies.

Reed: Brian, when you talk about things like ESS, and other mySAP-related extensions of R/3 functionality, they sound so useful and they also sound like they could have a direct impact on a company's all-important bottom line. Given that's the case, why aren't more companies pulling the trigger on these projects?

Trout: Well, when you start talking about a company's web architecture and their whole Internet strategy, that's not something that's easily defined. In the broader picture, a lot of companies have been reluctant to go in the mySAP direction because of the perceived limitations that it might put on their overall web strategy for the business. In other words, if I commit to going beyond R/3 into a Workplace architecture from SAP, all of a sudden I've made commitments on a fundamental level to use SAP's technology versus someone else's. A lot of companies, in the face of current economic conditions, have simply not allocated the necessary attention towards figuring out their overall e-business strategy, in terms of how they are going to deal with their employees, customers, vendors - all that stuff. Underlying Internet security issues are another factor as well. So that would be my explanation.

But the future of SAP for an R/3 customer is dramatic. The Workplace capabilities, the BW report output capabilities that can be realized when you combine an ITS server with BW - all of a sudden you have extended communities of business users leveraging SAP who don't have any interest in sitting in front of a terminal. For example, when senior executives at strategic planning levels of an organization are equipped with EIS functions through SEM (Strategic Enterprise Management) over a web architecture, there's tremendous power in this kind of functionality.

For years, the prevailing message from Hasso Plattner has been: We're going to take SAP out of the client-server architecture, and we're going to get it in the hands of the overall business, and we're going to do it all through the Internet. So that's where all this stuff has been leading. Look at PLM for example. A web-driven PLM solution in a secure Intranet and Extranet environment allows for collaborative design capabilities, developing products between multiple players who might come together and bid on building a certain engineering schematic for a customer, all those types of collaborative processes that have never been available online before. These are unbelievable value chains that SAP is developing. You can almost see a hierarchy of different companies that have complimentary products or services coming together in these SAP-enabled value chains against their competitors.

When you talk about this from the R/3 perspective, it makes a lot of sense, because I think the majority of the market is still R/3-driven. There still isn't overall consensus that everybody is looking at New Dimension or mySAP products. The customers I talk to, a large bulk of them, have not even opened the can of worms on that stuff. They're still sitting on 3.1i or 4.0 or 4.6, and they're saying, "We've enhanced what SAP's got on the back end; we haven't looked at these forward-thinking strategies yet." The biggest step they might have taken is to play around with BW in a sandbox and see how they can get into extended reporting.

Reed: Do you think these R/3 customers feel some risk, given that they've enhanced R/3 on the back end, and they're now worried that their modifications and enhancements couldn't survive a plunge into mySAP.com?

Trout: No, I just think it goes back to the former, Jon, which is that a company's e-business and web strategy hasn't really been defined in a lot of companies. And when you throw in the current economic limitations on top of that - and it's a big challenge to present a convincing ROI case for these kinds of projects against this kind of scrutiny - you're stuck with an R/3 system that's just sitting there.

Reed: You have mentioned this point before - you juxtaposed the Y2K era, when companies had their hands forced into investing into SAP in order to become Y2K compliant, versus now, when the ROI for IT projects is much more heavily scrutinized before the green light is given.

Trout: Absolutely. It's convenient to be that way when you have budget constraints - IT projects are more heavily scrutinized now than ever. Previously, there was the whole artificial environment that the Y2K movement created in my estimation. Another variable to consider is that SAP was a lot more simplistic at that time. Let's face it, the decision-making about different products and solutions becomes more and more time consuming and complicated when you have more choices. A few years ago, when you talked about an ERP solution, it was pretty cut and dried: "Do I go with Oracle, do I go with SAP, do I go with PeopleSoft, or do I go with another smaller, industry-specific player?"

Reed: You've also talked about how the economy can create a self-perpetuating cycle of IT spending cutbacks, because when you look around at your competitors and they're not heavily investing in these new e-business areas, you can justify doing nothing yourself in terms of new projects, because you know that you're not being left behind by your competitors.

Trout: That's right. The stagnation that's out there economically is also out there intellectually and technically. A lot of companies burned a lot of money on IT solutions that were unproven. We all saw the stories in the e-business software development markets, where companies were here today and gone tomorrow. These collapses left a lot of skepticism in their wake. Now, when we see Fortune 50 companies collapsing due to bad practices and economic conditions - when we see that companies like Global Crossing and Enron can't survive - then why would your company want to allocate precious resources on unproven solutions? If you're the CFO of a big company, even though the vendor you're considering is offering you a leading edge solution, the last thing you're going to do is bank your whole company's future on that, just because of the reality that we're not in stable market conditions. That's another contributing factor in the reluctance to invest in the e-business products that companies like i2, Ariba, and even SAP have been pushing.


 

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