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Sapphire 2008 Analysis - by Jon Reed of JonERP.com

After each major SAP show, Jon Reed issues a series of articles and podcasts evaluating the key trends of the conference, with special attention to how these trends affect the demand for SAP skills. This page will contain many of the articles that Jon has written on Sapphire 2008. Webmaster's note: we have moved an important part of the JonERP Sapphire 2008 coverage, Jon's article on the "Competing for ERP Talent" panel he appeared on, into the Hot SAP Skills section.

Note that in addition to the articles listed below, there are some more features to check out, including Jon's piece on the SAP skills gap. You can see this piece on his own career blog, or check out the version of it on BPX that includes comments from BPX users. You may also want to check out Jon's "pre-conference buzzwords you need to know" that he issued right before ASUG 2008.
SAP Skills Shortage Panel at Sapphire 2008 Print E-mail
ERP Consulting Supply and Demand:
Highlights from the Sapphire 2008 "Competing on Talent" Panel

Jon Reed notes: One of the most interesting events at Sapphire was a panel I took part in that looks at SAP skills demand. Since the report we were talking about looked beyond SAP, I decided to write this piece for a broader ERP audience - but most of the examples in here are SAP-specific. View panel replay: you can now view the replay of the Sapphire 2008 "Competing on Talent" panel (right click on the lnk to save this 225K Windows .asx audio/video file onto your computer, then open the file to play.)

Some ERP consultants prefer blue (SAP), some prefer red (Oracle). But there's one thing they all have in common: a desire to keep their skills marketable in a rapidly changing market. This raises an interesting question: are there "mega skills" that transcend individual applications? Are there skills that all ERP consultants can aspire to?

I recently got back from Sapphire 2008, SAP's largest yearly trade show. During the conference, I participated in a panel on enterprise skills trends called "Competing on Talent". While the focus was on SAP, the report we discussed during the panel had a much broader scope. In this feature, I'll review some of the key findings of the report, and I'll make a point to highlight some emerging skills that all ERP consultants can aspire to.


About the Report

On May 05, 2008, The Economics Intelligent Unit (EIU) issued a report entitled "Talent Wars: The Struggle for Tomorrow's Workforce," a report that was sponsored by SAP (you can see the PDF of the report here). In the report, the EIU issued its findings from a survey of 587 executives from "developed countries" (a companion report for developing markets was issued later in May). The key conclusion of the report? Based on the anticipated scarcity of crucial skill sets, "talent management" is rising towards the top of the list of corporate priorities.

No longer an issue that can simply be delegated to HR, the ability to recruit and retain top-level talent is going to be become a key differentiator between companies that succeed and those that don't. Since most companies are reliant upon ERP systems for both their enterprise-level transactions and their talent management capabilities, this type of corporate skills shortage is going to impact demand for ERP consultants across the board, whether your ERP affiliation is red, blue, or none of the above.


Why the Skills Shortage?

The EIC report started by defining the factors that have contributed to the current skills shortage. Amongst the factors cited: the retirement of the baby boomers and the decline in birth rates in developed countries. Retirement has become a big issue because of the knowledge and experience retirees are taking with them, leading to a projected shortfall of 5.6 million workers in the U.S. alone. To address the skills shortage, many companies have turned to developing countries for talent, but the "talent war" in developing countries is heating up also, hampering the ability of global sourcing to address these skills gaps. Of course, global talent sourcing is more effective in some areas (IT programming) than it is in others (financial management, industry-specific ERP configuration), so there are other challenges that make it harder to address the skills shortage than simply sourcing projects globally.

What Skill Areas are Most in Demand?

So what are the skill areas that are most in demand? In terms of Information Technology, some EIU respondents felt more urgency about the IT skill set than others. Overall, about half of all surveyed said they saw IT skills as "very important" to their company's ability to succeed. However, the EIU report went on to say that "companies appear generally confident in their ability to find talent with the right technology skills."

However, companies are not as confident in their ability to recruit so-called "soft" or strategic skills. According to the EIU, "More pressing than the need for better technical skills is the demand for employees able to make use of softer management skills and techniques. Over two-thirds of executives in the survey (68%) believe that the ability to manage change will be critical to their organization's success over the next three years. The capacity to think strategically, to communicate effectively with people, as well as to analyze problem-solve, area also highly sought-after skills by executives among new and existing employees."


How Do Soft Skills Intersect with ERP Skills?

As I reviewed the findings of this report, I saw that they intersected with the recommendations I often make to ERP consultants about staying marketable. First, we can read between the lines and see that the comparative lack of urgency over IT skills likely points to the overall global availability of IT skills. On the other hand, strategic/soft skills are more culturally-specific, and therefore harder to outsource. I have said on many occasions that the "era of the cubicle coder is over." That is simply a colorful way of saying that technical ERP consultants who want to remain marketable need to be seen as a valuable part of the on-site team, and not easily outsourced. This means adding the kinds of soft/strategic skills to the technical skill set - the same skills that are projected as high demand areas by the EIU.

When we look at functional ERP consultants, some skill changes are also in order. Historically, functional ERP consultants have made their living configuring ERP systems across industries, often without the need to have deep industry and business process knowledge. Increasingly, however, that is changing, and the value of "soft" or "strategic" skills to functional ERP consultants is no longer in question. Those functional consultants who have a stronger background in particular industries and who have the ability to help a company think strategically about the processes they are configuring are the ones who are going to be in the most demand going forward.

What Did the Panelists Have to Say about the Ideal ERP Skill Set?

The panelists included some heavy hitters in the ERP services industry. These panelists all agreed that the ERP skill set is changing, but that doesn't necessarily mean abandoning the core competencies that got us to this point.

Mark Willford, Managing Director of Accenture's SAP Practice for North America, led off the panel with an overview of the ideal ERP skill set. When asked about the impact of "soft" skills on ERP staffing needs, he said: "We view this issue in two ways: one is having specialized skills, but then also having what is referred to as ‘soft skills'... The two step approach is: first, what are the specialized skills that are in demand in the marketplace? From an SAP perspective, this would be the different functional and technical areas, and then we make sure to train our people specifically in those specialized skills."

Mark continued: "Our clients are not looking for generalists; they are looking for specialists. Then, beyond that, we take it a step further and say, ‘How do you use that skill to help develop a compelling value proposition for our client?' These are soft skills like being able to understand the end goal, the value the client is trying to achieve and how you collaborate, beyond just knowing your skill set, to work together as a team to create a solution? Those soft skills are critically important."

I thought Mark made a very important point about generalization versus specialization. When we think about the increasing importance of so-called "soft skills," we can fall prey to the assumption that the most important skills are a general consulting skill set. But in fact, the core of the marketable ERP consultant remains a focused specialization. The soft skills, if you like, are "wrapped" around this specialized core.

Mark Willword said that Accenture had around forty specialized SAP profiles, and I've seen more than that cross my desk. Examples of SAP specializations range from development to systems administration, from financials to supply chain management. And of course, we know that even within the areas I just cited, many of the best consultants have an even more precise focus, such as a product costing expert within SAP Financials.

Later in the panel discussion, I suggested that consultants needed to pursue these process-oriented skills so that they would be more valuable to on-site teams. The goal of the ERP consultant, in my view, is to combine the core specialization with the value-added soft skills that make a consultant more valuable to a project and less vulnerable to outsourcing.

Bill Yoh, Chief Executive Officer for Yoh Talent Solutions, agreed with my comment and described the ERP skill set his clients were asking for: "Whether it's for own internal talent, or for the talent we provide to customers on a consulting basis, it's kind of a trifold of needs. The first fold is certainly technical skills, whether it's a programming language or a particular expertise in a module, that's always been key, but that's no longer just enough. Now, certainly the second part of it is the vertical market knowledge. They don't want somebody in the utilities business who has done their whole career in pharmaceutical. They don't want someone in the government space who has spent their whole career in private industry. The third one is more that functional skill - business analyst, project management, those kinds of things. That's the area where you get into the soft skills, and more into these emerging skills. Those are the ones, to your point, that are not by definition, offshoreable or outsourceable. You have to be right with the customer, managing the teams, there's a lot of human interaction that is inescapable in order to be successful."


How Can ERP Consultants Capitalize on the Findings of this Report?

In addition to acquiring more "soft" skills, what else can an ERP consultant do in order to stay in demand? What we're really talking about, in simple terms, is mimicking the product evolution of the products we consultant in. SAP, for example, is now positioning itself as a "business process platform." Therefore, SAP consultants should be pursuing their own business process expertise. On the SAP side, there is a specific online community, called SAP BPX, dedicated to supporting the business process expert skill set. In fairness, there is still a lot of work to do defining what the "ERP business process expert of the future" is going to look like. "Soft skills" is a pretty vague phrase that doesn't always shed light on the skills needed.

In the SAP BPX community, I have participated in discussions where we have tried to better define what this future skill set might look like. My view is that what is required is more of a skills evolution than an immediate skills change. I also think that the shift in skills is less about abandoning core programming and application configuration skills, and more about adding process expertise around those core skill sets. For example, I often hear from SAP programmers who are thinking of jumping ship, rather than working to evolve their skills in line with how SAP itself is evolving.

For those who want some examples of what an "ERP Process Expert" skill set might look like, here are some possible aspects of this profile:

- business process expertise (knowledge of process flow around one's area of specialization)
- modeling tool expertise (business process modeling and data modeling tools)
- industry specialization
- Web 2.0 skills (ability to adapt collaborative tools like wikis into the workflow)
- soft/communication skills (in particular the ability to work with a diverge group of people within an organization, to understand the overall business strategy of the ERP implementation, and to make a "business case" to executives when needed)
- SOA expertise (understanding how ERP business processes can be extended via the Internet to customers and suppliers)

As noted, these "business process" skills would then be "wrapped" around a functional or technical ERP specialization. Of course, the particular tools you want to master will vary based on your ERP vendor and your area of focus. I do find it's helpful to think it terms of how soft skills intersect with tools. In particular, we are going to see the emergence of a number of modeling tools, some that are vendor-specific like SAP's newly-announced NetWeaver BPM, and some that are more open source in nature.

These tools will give some teeth to process-driven ERP by allowing users to design and model processes that can then be executed with a minimum of expensive customization. That's the vision, anyhow. What we've learned in the SAP world is that these visions take some time to realize, and we may see a buggy release or two before the potential is reached.

With that disclaimer in mind, the EIC report shows that SAP is not operating in some kind of vacuum with its notion of becoming a business process platform. Success as an ERP consultant has always involved reading the tea leaves and adding new skills before the demand for existing skills flattens. Today is no different. If anything, we have more web sites and more data, such as this EIC report, to ensure that our project choices are in line with where the market is going. But it's up to us to take the steps to remain marketable.

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3.26 Copyright (C) 2008 Compojoom.com / Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved."

 

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