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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.

Or, follow his opinionated views real-time on his JonERP Twitter Feed. Jon served as SAP Mentor from 2008 to April, 2015. 

Jon is a co-founder and award winning blogger at

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Podcast: Talking SAP Business Models, SAP Certification + Training with Andy Klee of Print E-mail

podcastlogo_jonerp.gif"Jon and Andy Interview Each Other on the Future of SAP, SAP Certification, the Impact of Virtual ERP Training, and the Business Model"
Podcast Interview Date: December 22, 2009
Podcast: Listen Now!

What business trend will SAP have to tackle in 2010 to stay relevant? And what is the future of ERP training amidst all the virtual training hype? How does SAP certification impact the SAP hiring process and, and how are new "social networking" sites like LinkedIn making their presence felt when consultants are evaluated? Oh, and how does Jon Reed make money anyway? What exactly is the business model? 

To get to the bottom of these questions and several more, Jon Reed of and Andy Klee of taped an impromptu, unscripted thirty-five minute podcast where they each turned the tables on the other until they ran out of questions to ask - at least for this round. A couple features noted in the podcast: Andy Klee refers to ERPtips Express - a service that allows registrants to check out half of the new ERPtips Journal content free of charge. Andy also refers to the recent ERPtips SAP Training Survey. Jon's Twitter feed is @jonerp, Andy's is @andyklee.

Podcast Highlights

:48 Andy to Jon: You've been well known in the SAP community due to the knowledge you share with the SAP community on SAP consulting skills? Have you broadened your focus in the last year or so?

Jon: Yes. I have definitely broadened my focus. I'm still very interested in tracking SAP skills trends, but in order to best understand where SAP is headed, it's important for me to understand the broader SAP market context also. As part of the SAP blogger program, I've met some bloggers who have really rocked my world and I've learned a lot from them about understanding the SAP market as a whole.

In addition, I've been blogging for the PAC analyst firm on a range of topics in the Feeding the SAP Ecosystem blog. Broadening my focus also ties into where my overall business model is headed, and we can talk more about that. However, I'm definitely going to keep my SAP market focus overall.

2:21 Andy to Jon: You've definitely expanded - follow Jon on Twitter if you want to track where the SAP market is headed. What major trends do you see in SAP?

Jon:  The stakes in SAP have changed dramatically. A couple years ago, it looked like a two horse ERP race between SAP and Oracle. All of that has really changed. There's a number or reasons for that: the economic recession is at the top of the list. But it's also forcing a reassessment of business models, and we'll come out the other side with a new economy and a new way of looking at ERP in general.

The impact of the cloud and SaaS is an area where customers are deriving real value and SAP has challenges to face. The expansion to mobile devices, the push into the SME (Small and Medium Enterprise) space and the lessons SAP is learning there - you can make a long list of the trends that are impacting SAP right now and shaking up assumptions about the ERP market.

Bottom line: it's an economy that requires a more "agile" response, not just in terms of new development methodologies, but the need for ERP customers to respond much more quickly to capitalize on changing markets. This poses a real challenge not only to SAP but to all the traditional ERP providers.

5:00 Andy to Jon: I'm in a program at Harvard Business School, and she says that SaaS is going to impact how services are delivered. But I don't see a fundamental difference in the skills that will be needed to have successful ERP implementations using a SaaS model. Do you see any changes?

Jon: I do see some major changes on the technical side. For example, if you have a bunch of tenants on your service, you might put out a tweak to a release, and the company wouldn't see any changes or have to deal with any issues with upgrading technically. So that can significantly change the technical needs. And there might be some business level configuration changes also. However, the most successful SAP consultants need to know how to advise companies on business process optimization, and that doesn't change, no matter what kind of software you are using.

7:10 Andy to Jon: I think you and I disagree about the importance of certification. I was speaking to JDE and PeopleSoft consultants, and I asked them, if they had two equally qualified applicants, and one was certified and one was not, would that be a tie breaker, and the reaction was: no. Other factors were most important. Comments?

Jon: In the past, when I was a hands-on recruiter in SAP, I noticed there were times like that, where certification functioned as a tiebreaker between two equally qualified, but in more cases, it was seen as one more positive that helped your chances. My objection with SAP certification has never been about that, it's been about the misrepresentation of SAP certification and what it can do for you. I like to think that a sophisticated hiring manager would understand that SAP certification is just one of many factors you would consider when evaluating an applicant, and not to base your hopes for a quality hire on just a piece of paper.

9:25 Andy to Jon: This goes back a few years when applicants could land their first job in SAP with just a certification, and those days seem to be gone now.

Jon: Agreed. When SAP certification works the best, it serves as a validator of field experience you've already achieved. Now, at the Professional and Master level, there will be validation that goes deeper than simply technical skills validation that could help companies make better hiring decisions. Believe it or not, I've gotten emails just this week from a couple of people who are frustrated about being certified and not being able to find a job. So there's still an expectation gap between what people want out of an SAP certification when they are trying to break into SAP and what's out there for them on the market.

11:00 Andy to Jon: I don't disagree with what you're saying. When you have ten years of experience, and you're trying to compare two candidates who both talk a pretty good game, maybe SAP certification has a role to play in helping to discern between these two candidates.

Jon: Yes, it's one more criteria you can turn to that can help to validate the hiring decisions you are making, but how people conduct themselves in online communities can start to serve as a tiebreaker also. For example, someone who speaks regularly at an ASUG event, or who has twenty recommendations on their LinkedIn profile. Now, those recommendations could be "B.S.," but it does tend to speak volumes over one that has none.

12:38 Andy to Jon: Back to SAP: do you think they can really focus on all these different initiatives - SaaS, cloud, mobile, SME?

Jon: SAP does have the capability to focus on all these needs. Unlike some of its competitors (Oracle, IBM), it can focus on business application. I don't worry so much if they can address each area, but the cohesiveness across the landscape. And how well are the innovations being shared across all platforms, and is there some standardization across application areas. But does everyone inside of SAP feel the kind of urgency internally that analysts want them to feel? This is an area of heated debate and maybe there's no one right answer.

14:45 Andy to Jon: Let's shift focus a bit to your own business. I'm sure the listeners are curious to know: what is the JonERP business model? How do you generate income?

Jon: That's a great question, and one of the most common questions I get. People have this gut feeling that podcasts don't make someone rich, and they're right about that, though I do get a lot of joy out of doing them, and I fancied myself as a radio DJ when I was younger, so this is a chance to live out some of that. Bottom line: I blog, podcast and Tweet because I enjoy doing it, because I enjoy service the SAP community, that's part of why I'm an SAP Mentor, because I enjoy doing these community-oriented things.

But technically speaking, creating all this free content IS part of my business model. What we have seen, across many industries, is the emergence of some form of a "freemium" business model. In a nutshell, the freemium model means you give away some kind of free information, to build goodwill, visibility, and/or market share, and then you have some types of premium services that you hope to sell to that loyal base that "consumes" your free information.

I don't have any content visitors pay for on my web site (or a "premium" paid area), though I do have a registered user part of the site, and I do a fair amount of consulting, as well as some content that I am paid to deliver (that content is clearly marked on the web site if it appears here as "vendor content"). Most of my content is free.

As for my consulting work, most of it is helping smaller SAP service providers who have a lot of entrepreneurial grit and attitude to find a successful market play in the SAP space. Sometimes that means consulting firms, sometimes that means training and service providers, and sometimes that means third party SAP software vendors.

I actually had a two hour session with a software vendor on Friday that's looking into how can we take our knowledge of ERP and create a meaningful product that would be successful, so they had questions like, "Should we become an SAP software partner," and "How should we market to the SAP community?" That second question is one I am particularly interested in, because marketing to the SAP community is something that many companies still do a poor job of.

Even when we talk about the new social networking tools like Twitter, LinkedIn, and Facebook, too often there is an emphasis on broadcasting and not enough thought around, "How do I make an impact and join a conversation about how to solve SAP problems in a meaningful way, as opposed to just pushing product?" I help companies with their strategy around these new tools and how to better participate in the SAP community, but also be more successful with their services and make sure they're rolling out services that anticipate the trends they are seeing. For example, the trends around analytical tools and getting more out of transactional data - those are trends that I try to help companies make the most out of.

That's basically what I do. I also have some new paid products coming out. For example, and this is a world premier on this podcast, I have a book coming out through my company, "The Ultimate SAP Pricing Guide." Interestingly enough, the author contributed on SAP Pricing on ERPtips when the publication was first coming out that you and I had worked on back in the day. All of us working on freemium models are inventing it as we go along so far, but it's been a good ride so far.

18:40 Andy to Jon: You've touched on many issues that are near and dear to my heart. For example: do you find that services and software companies that are successful in a different market, like JDE Edwards or PeopleSoft, that they can have similar success in SAP, and how does that work out?

Jon: Yes, I do run into companies who think that their success in another area of SAP automatically means success in the SAP space, and that's not necessarily the case. In the beginning of this discussion, we talked about how many ERP business practices are based on the same issues, pricing is pricing and order management is order management, so there are competencies that can translate well from one ERP package to another. But other dynamics are different.

For example, on the consulting side, with smaller ERP packages, you can find master level consultants who may be able to implement almost the entire suite of functional products. But I warn them, "You can't do that on the SAP side. You can't one or two or three go to consultants. Even in an area like SAP financials, you have a range of consultants, from a product costing expert to a new General Ledger expert, to someone with industry specific costing knowledge, so you can't have just a few consultants to cover SAP the way you might have done in another product."

20:44 Andy to Jon: Yes, the services market is different, it's a lot bigger world. It's not a slam dunk, there are size and scope issues and more complex vendor approval processes.

Jon: Right. Your work is so well known on the JD Edwards side that almost all JD Edwards companies know about your firm. On the SAP side, you really have to manage people's expectations around this. For example, how long have I been plugging away at this? I've been publishing SAP content since 1996, and there's still a ton of people who don't know who I am. So you can't look at that from a marketing and name recognition standpoint, and say, "Everyone is going to know who I am, so it's going to be easy to sell."

Andy: On the JD Edwards side, we're very well known as a training firm, and also an SAP consulting firm. But on the SAP side, we're primarily focused on SAP training, in particular SAP configuration level training. There's not too many firms out there that focus on configuration level skills.

Podcast Part Two: Jon turns the tables on Andy and the two discuss ERP training trends

22:55 Jon to Andy: So on that topic, what do you see as the keys to good configuration level training?

Andy: If it's a public class, or even if it's an on site class, we try to cover all the major areas of the software, so the students aren't in a situation where they don't know what they don't know. We want them to know what areas they might need to dive deeper in for future training. We usually do a five day class, for example on Sales and Distribution, so we can get into quite a lot of detail, and we'll always try to tie that back into business process, like Order to Cash.

The keys to make sure that the clients feel their training was worth their time is the business process focus, gotchas to avoid, and beginning, intermediate, and expert level content in a particular area of SAP.

24:55 Jon to Andy: And how do you evaluate instructors, but for me, in my training experiences, the caliber of the instructor was crucial.

Andy: Agreed! We did a survey of SAP training with SAP clients, and the instructors' teaching ability and real world experience came out as the top two factors in terms of what helps clients to get a great SAP training experience. We always do evaluations on the training we do - if we don't get a four out of five on the evaluation, we have to look at the instructor. A lot of times, it goes back to establishing expectations at the beginning. Sometimes we'll be clear on the class content with the client, but the people in the class don't know why they are there, so getting clear on expectations is important.

26:45 Jon to Andy: You were first skeptical of SAP virtual training. How have your views evolved?

Andy: I was skeptical initially, because I couldn't see how a student could sit in front of a screen with the speakers on for eight hours a day. The state of my thinking now is that virtual training can be somewhere between the 80-90 percent range compared to a classroom where you can interact directly. Given that you don't have to travel for virtual training, that's a pretty good success rate. We're looking at combining our virtual and classroom training at ERPtips, and SAP and Oracle are doing the same thing. But I do think that the best practice is more than just putting people in front of a screen for eight hours a day. One example I saw from Sage is that they break up the content into smaller chunks and spreading it out over twice as many days, and adding more interactive sessions. Those are some of the findings that we've come up with so far.

29:10 Jon to Andy: In your IT Toolbox blog, in your interview with Cushing Anderson of IDC, there seems to be a sea change in ERP training from technical/task focus to business process focused. Why is this change so important?

Andy: Historically, most training vendors and clients have looked at training in terms of skills gaps - "let's offer these classes to these students and get them trained and fill those gaps." But what's missing is the overall business strategy, and how that is tied to the training. For example, if the business is trying to emphasize reducing costs of inventory and reducing pricing, and they are taking their marching orders from other companies that have accomplished this, such as Walmart. So the training focus needs to incorporate that into business strategy.

31:20 Jon to Andy: This reminds me of what SAP Board Member John Schwarz said at the recent SAP Influencer Summit in Boston: "This isn't your grandmother's SAP. Well, this isn't your grandmother's ERP training either."

Andy: Yes, I'm excited. I think we're doing all the right things. Like you, I enjoy giving away a lot of content. In fact, all the interviews and blogs I've been doing will move into a 15 page white paper which I will also give away, and move on to new topics. I'm going to move on from the subject of linking training to strategy after that white paper for a while. I'm going to start interviewing a bunch of people about end user training next.

32:10 Jon to Andy: I've turned the tables on you for a while, any final comments or questions?

Andy to Jon: I agree with your "freemium" model. We do have an ERPtips Express option, where you can get half of our new content available for free.

Jon: Yes, there's no one right way to implement these new models, but it's worth doing that's for sure. I enjoyed talking with you, in particular, I know our listeners like to hear more about the training and certification topics that are a key part of your focus. Let's do this again down the line.


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