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jonerpdemojam.jpg Jon has been tackling key SAP issues (like SAP certification and HANA) since 1995. Get the latest from his blogs, YouTube channel, and iTunes feed.

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Podcast: Jon Reed Interviews Vijay Vijayasankar on the Impact of Offshoring and SAP BPX Skills Print E-mail
podcastlogo_jonerp.gif"SAP Consulting in the Era of 'Global Delivery' and Offshoring and How the Consulting Market Has Changed - Permanently"
Podcast Interview Date: March 20, 2009
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On March 20 of 2009, I spoke with Vijay Vijayasankar, Senior Managing Consultant at IBM and fellow SAP Mentor, and conducted one of the most important podcasts I have done since I started doing them almost two years ago. On my mind during the taping: my theory that SAP consulting is not just being impacted by the economy and will come roaring back later. I believe the changes in SAP consulting that are underway now are permanent in nature, and have implications for all SAP professionals. There was no one better to ask about these shifts than Vijay, who has broad market experience and has seen many of the changes I am talking about. Disclaimer: please keep in mind that the opinions Vijay expresses during this podcast are entirely his, and do not represent the view of his employer, IBM.

Before you listen to the podcast, I want to note that Vijay and I do not intend to make light of the layoffs and shifts in employment globally that most systems integrators (and software vendors) have undertaken. Nor are all these shifts necessarily bad for everyone who is impacted. However, we both believe that the reality of "global labor arbitrage" require a fresh look at what it takes to succeed in SAP and a pro-active approach to SAP skills development. During this forty minute podcast, we go into both the state of the market and some of the skills approaches that Vijay recommends. If you want to learn more about Vijay's takes on SAP, I highly recommend his popular SCN blog. (Recently Vijay was honored as a Top Contributor on SCN for 2008).

Here's the podcast summary by timeframe:

2:02 Vijay's role as a Senior Managing Consultant at IBM, and how his role is not just as a Program Manager. Vijay's position is flexible enough to provide him with roles as a Solution Architect, a BI Architect, and other views into SAP project work.

2:53 Jon asks Vijay about being named an SAP Mentor and whether the announcement came as a surprise. Vijay talks about sharing the news with his colleagues as some of the reactions he got to being named as an SAP Mentor. And no, it's not a title you can pay for or get based on SDN points.

4:20 How does Vijay seen an SAP Mentor role? Expertise in SAP technologies, involvement and influence in the ecosystem, and ability to advocate and share views from the reality of field work. Plus, a two way communications loop is established, sharing clarifications from SAP with the community as well.


6:00 The discussion shifts to the "rocky world" of SAP consulting in this economy. Vijay shares some shocking percentages on the amount of SAP work being outsourced - in some cases 90 percent. Vijay does not use the term "offshoring" at IBM - they talk in terms of "global delivery." Some of this reflects the importance of hiring local experts on projects, but some of this is "global labor arbitrage" - as SAP projects mature, more and more SAP work is offshored to the cheapest competent source. Offshoring has matured a lot in the last ten years, it is not just snippets of code. Issues with security and work quality have been addressed significantly.

8:30 Jon asks Vijay to talk more about global delivery and the huge percentage of work he sees being outsourced: doesn't this mean that many SAP skills are going to become commodities? Vijay says this is an issue that should be watched out for. ABAP, for a large part, has become a commodity - except for the super talented top performers. These folks are not only getting premium on site rates for their technical skills, but their business acumen is a key part of what keeps them on site. Vijay regrets to report that BI skills are often becoming a commodity, which is not necessarily a good way to handle BI projects.

10:22 Jon presses Vijay on the question of skills: aren't Basis skills becoming a commodity as well? Vijay talks about these trends, and what opportunities there might be. Sometimes working off site can allow you to support multiple projects off site at the same time. You might have to take a lower rate, but there are opportunities to take on multiple projects, perhaps even from your "SAP laboratory" of your home office.

11:30 More recently than ABAP, Basis, or BI, SAP functional work is now being outsourced as well. Vijay comments on this more recent trend. A functional consultant typically had some industry experience as well as configuration skills. Therefore, it was always harder to generalize functional work the way it was ABAP and Basis. But slowly but surely, these skills are being outsourced elsewhere. Technology has a huge part to play: it's now possible using videoconferencing and virtualization to do functional work like blueprinting from remote locations. Vijay doesn't think functional work is going away, but the functional skill set is changing. Functional business architects are still needed - those who can be in front of a client advising them on business processes. People use to say it would never happen, but it's happening.

14:00 Jon gets emails from people that begin with the phrase "When the SAP consulting market comes back, after the economy is getting better." But Jon doesn't think the SAP consulting market is EVER coming back to what is once was this time. This downturn is not like the others - companies are changing their delivery models and what they look for from outside consultants. This is something SAP professionals need to be on top of. Vijay agrees: the SAP consulting world has changed, permanently. The global delivery model is here to stay. Vijay agrees: people may refuse to believe it, but you can now use technology to outsource things we have never envisioned. Traditional narrow SAP specialties like pricing and variant configuration used to get a premium rate, but those skills are slowly coming down. Without multiple skills, it's really hard to get a good job. Vijay encourages his IBM team member to have multiple skills, combining business and technical work, and mixing up skills such as BI and Portals. Few clients will pay a premium rate for just one narrow skill anymore.

17:00 Jon says that he wanted to get this difficult point across clearly to also highlight that there is an opportunity: a fork in the road for SAP consultants who want to improve their skills and remain marketable as on site consultants and key contributors on project teams. So what does Vijay recommend for functional consultants who are used to make their living configuring the IMG? Vijay uses the example of an SAP Financials person. One key: making your skills relevant to the economy. Help companies to visualize and predict costs, not just configure the IMG. BI knowledge would be valuable in this case. Vijay has seen clients get excited about possibilities beyond "blue screen SAP." Vijay also sees opportunities with SOA, combining services, beyond the marketing hype of SOA. Thinking outside the box becomes very important. Understanding the relationship between Financials and other modules, and how costs are tracked, and how best to present this information at the CFO and executive level via dashboards and widgets. Not many people can currently do this. Bring sharp ideas to clients, not just marketing talk - you have to be able to build a real business case. We're back to the fundamentals: SAP consultants need to be able to solve business problems.

22:25 There's something in the BPX skill set for everybody. Not everyone agrees, thinking BPX is a futuristic skill set relying on modeling tools that aren't mature. But Jon feels differently. It's not just about Solution Architects or Enterprise Architects, and it's not just about modeling tools. It's about a range of skills and tools that consultants can get started on now. Jon goes off on a rant about the kinds of relevant skills he thinks consultants can be working on. He asks Vijay what he thinks of this. Vijay thinks that BPX is perceived as futuristic is because it can be incorrectly seen as a "big bang" approach, and we're not there yet. He returns to the example of widgets: it's not hard to build a widget, and it's an underutilized technology that exists today that can be used to tackle existing business problems. But what does the business need? That's the big question that must be tackled. It's not about becoming a BPX superhero - you can't learn all the skills sets yourself. But if you know how to work with a diverse team and visualize a business process, you are on the way. Vijay suggests: take small skills steps now - don't approach it in an all-or-nothing fashion. Build on your tangible results.

27:48 Jon asks the crucial question: does IBM take BPX skills into account during its own hiring process? The short answer: absolutely. IBM has an "extreme focus" on BPX skills. There is buy-in at IBM regarding SAP BPX skills from the top down. There is a lot of training going on - it hasn't reached every single consultant at IBM yet, but it's getting there.

29:25 The BPX-to-BI skills connection hasn't been talked about enough. There is some vague sense that BPX and BI skills are connected, but there isn't enough specific information on how the two are connected. Vijay uses the example of a CRM product, which requires analytical information to be of use to an executive. A CRM consultant and a BI consultant must work together to figure out how to capture the right data and visualize this data in an appealing and useful way. These skill sets are overlapping, bringing BI and BPX skills into the same mix. You can learn BI online at SCN, you can pick up books, you can get up to speed on BI skills if you make the commitment. Vijay thinks both ABAP and BI have been seen as less important than the skills actually are. At the least, functional consultants should have a clear sense of what BI can accomplish.

34:45 Before the podcast wraps, Jon can't hold back from asking Vijay about Business Suite 7, since Vijay has already blogged about BS7 and "value scenarios." BS7 is the largest suite release in SAP's history, but it has faced criticism, perhaps due to market timing around its release. Vijay thinks that BS7 is a step in the right direction, but asks question about the timing of BS7 in a market where companies aren't thinking of upgrading. BS7 will get there, and the industry value scenarios look promising, it's really a matter of timing.

37:05 Vijay's parting words to SAP professionals: no need to get fancy: get one more SAP skill than you have today.


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