SAP Skills of the Past, Present, and Future

SAP Skills of the Past, Present, and Future:
How the Announcements of SAPPHIRE 2007 Will Affect SAP Professionals

Unabridged and Unadulterated Edition, Never Before Released

SAPPHIRE/ASUG 2007 was not a conference of big announcements, but for SAP professionals, the implications were plenty big. A revealing moment came at the major press conference that followed CEO Henning Kagermann’s keynote. The first question to lead off the press conference called direct attention to the issue every SAP professional has to face. The best translation might be: “Is there a skills gap in the NetWeaver era, and if so, what do I have to learn to remain gainfully employed?”

The actual question was posed by Bruce Richardson of AMR research. Here is how he phrased it: “Henning, I liked your comparison to moving from mainframes to client-server and BPR and ERP, and now making the transition to eSOA and the business network transformation. When we made the transition from mainframe to client-server, it exposed huge skills gaps and skills shortages. As we move to SOA, it’s an entirely different skills base and a lot of IT departments aren’t prepared. I’m wondering if you’re worried about a potential skills shortage and what SAP might be doing to address that and get on top of it?”  

The answers from Henning Kagermann, CEO of SAP AG and Leo Apotheker, Deputy CEO, were notable. After hearing a number of SAP executives play down the “skills gap” problem, it was striking to hear both Kagermann and Apotheker acknowledge that there was in fact an insufficient supply of consultants who had the experience needed to fulfill SAP’s Enterprise SOA vision.  

Kagermann put a positive spin on it by arguing that when the demand for qualified consultants outstrips the supply, it’s a good indicator of a healthy market. Consultants who are getting more phone calls from recruiters than they have in years would agree. But would SAP customers?  Apotheker also responded to this question and his initial answer was surprisingly blunt: “The fact of the matter is that there is a shortage.”

Apotheker also explained that the shortfall in consultants was the result of double-digit growth. He went on to make clear that SAP is not satisfied with the situation, and that SAP is committed to addressing this skills gap shortfall. He described several measures being taken, including an emphasis on online learning and leveraging SAP’s knowledge-sharing communities, including the new BPX network for SAP “Business Process Experts.” 

Apotheker mentioned that SAP has committed to “upskilling” 30,000 consultants globally, partially through e-learning initiatives. One revealing moment during this Q&A exchange (which you can hear online at SAP.com): first Kagermann answers the skills gap question, then Apotheker. After both initial answers, Kagermann adds a further clarification. While he is doing so, you can hear Apotheker talking to the person sitting next to him in the background.  

What he is saying is not audible until Kagermann is wrapping up his answer, and that’s when you can make out Apotheker saying, “(it’s) a big problem.” One would assume that Apotheker means that the staffing aspect of SOA is currently a big problem for SAP. If that’s the “big problem” he is referring to, he is correct. After all, how can you emphasize the cost savings of SOA when the consultants you need to implement it are in such short supply that their rates are through the roof? 

On the surface, this is good news for experienced SAP consultants, and it’s also good news for those trying to break into the field. Clearly, there’s a lack of senior SAP consultants who have actual project experience implementing the NetWeaver-driven Enterprise SOA functionality that SAP emphasized in the press announcements at this year’s conference. We have been told by SAP that these new technology areas will create entirely new jobs that are different skill-wise than anything we have seen in SAP so far. This would seem to imply an immediate demand for a whole new skill set.  

But here’s the problem: over the years, many SAP professionals have been burned by investing in new skills training before the jobs arrived. And in some areas, such as APO and SEM, the jobs never arrived in the quantity needed to drive a lucrative consulting market. SAP was able to fill most of the needs internally, with the help of a smaller group of specialized outside consultants with very deep experience. Aspiring SAP professionals were not able to justify their investment in this type of training. In the NetWeaver era, the problem remains: how do you stay ahead of the curve without being burned?

There’s no simple answer to that question, but the key is to find a way to evolve along with SAP, keeping the future in mind but also cultivating skills that are relevant to the present. SAP might say, for example, that folks with Enterprise SOA skills are badly needed, but how many jobs have we seen up to this point that require those skills? Not many. Not when we compare that with the amount of jobs that are now open in areas such as Financials, HR, BI/BW, and CRM. And what if IT departments find that their existing Java and web people call fill the SOA gaps pretty easily?

I ran into more than one SAP customer who told me that their existing web programmers had been able to catch on to SOA projects quickly. For those companies, the supposed "SOA skills shortage" was not a relevant factor. Making the right SAP skills choices is not as easy as resting on the admissions of SAP executives, as sharp as those comments often are.

SearchSAP.com ran a piece not long ago describing the new project roles SAP envisions that are supposedly going to be centered around these new "Age of SOA" skills sets. These roles had fancy new titles like "Consolidator," "Composer," and "Repository Keeper." It doesn’t matter what these jobs are eventually called. If they are about to become commonplace, it makes sense to start acquiring the needed skills now. But how do you do that when there are so few of these jobs available?

A quick search of Dice.com, SearchSAP.com’s job board partner, yielded exactly 0 jobs involving SAP Repository Keepers. SAP Consolidators got two hits, but one was from SAP itself and one involved financial consolidation. "Composer" did generate 33 openings in SAP, mostly involving Visual Composer - one product that the "Composer" of the future might end up using. So that role might be taking on a bit of shape, but the others are not going to put much food on the table this summer.

I didn’t even bother searching on "Disruptive Innovator," another "job of the future" from SAP that is not currently being emphasized. I am confident there are 0 listings for that one. "Business Warehouse," on the other hand, generated 2740 hits, "SAP Portals" 902, SAP CRM had 1344 hits, and SAP "FI" 1295 jobs - and that’s not including the other variations on those keywords that might have generated even more hits. So how do you get from BW Administrator to Repository Keeper? And how do you know it’s the right move to make?

In this article, I’ll try to address these skills dilemmas by breaking SAP skills down into "past, present, and future." As we go through each category, we should get a better idea of how to balance today’s skills with tomorrow’s "jobs of the future."

THE FUTURE

Functional and technical skills will converge. There’s no question that the SAP functional consultants of the future will have more technical know-how. And successful technical folks are going to need to understand the business processes that drive technical requirements. What kind of technical tools will functional consultants need to understand? They will need to grasp the web-enabled functionality in their focus area (Employee Self-Service being one obvious example in the HR area), and in the Enterprise SOA era, they will need to understand how different pre-defined business process components, such as those stored in the Enterprise Services Repository, can be assembled to perform end-to-end business functions.

There will also be a need for functional folks who understand the tools that SAP is rolling out to automate the development process, such as Visual Composer and third party modeling tools from partners ARIS and IDS Scheer. As for technical folks, the days of IT projects running wildly overbudget through self-indulgent customization are over.

IT is more strategically important than ever, but it’s also subject to more bottom line accountability than ever before. This climate rewards technical pros who have an "MBA mentality." As I have said before, "the era of the cubicle coder is over." The ability to work with functional teams, as well as supporting the needs of users through easy reporting solutions and friendly user interfaces, are all great skills to cultivate if you are on the technical side.

Configuration skills will become less important. SAP is always looking to reduce the total cost of ownership, and that means reducing consulting costs. This means automating everything that isn’t already nailed down. I had a couple of high-level SAP managers tell me in strongly-worded language that they expect the configuration piece to become less and less crucial to the functional skill set. They expect configuration to be increasingly "out of the box" for particular industries.

In addition to the emphasis on industry pre-configuration, the manual configuration that *is* needed will be subject to the same global marketplace that has changed the nature and cost of development work. With more configuration being outsourced, this skill set will become commodified. "The end of configuration" would be a major piece of news, especially when you consider that configuration skills are at the core of what makes a functional consultant marketable in today’s market.

Up to this point, functional consultants stayed marketable by mastering configuration on the latest SAP releases. This tactic will become less effective as the overall need for hands-on configuration goes down. This shift won’t happen overnight, but in the long term, functional consultants need to think in terms of delivering real business value to clients by acquiring expert-level business process and industry knowledge.

This knowledge will be the key to "adding value." There will always be some configuration work, but it will become much less central. The ability to guide clients through the entire implementation blueprint, including knowledge transfer/user training, will be more sought after than ever. I had a highly-placed SAP executive who was a key player in SOA adoption tell me that he thought configuration was going to all but disappear as a skill set.

He described future SAP skills as being in three layers, with business process know-how at the top, configuration of components in the middle, and technical architecture at the bottom. But he said that the components would be increasingly pre-configured and that the Service Oriented Architecture would allow for any customizations or enhancements that were needed without relying on either configuration or coding. Which leads us to...

Custom development will be dramatically reduced. One of the big culprits for over-extended ERP budgets is custom development gone awry. SAP is determined to reduce both the costs (and the need) for custom development. More and more, companies will use enterprise services to assemble add-on solutions with little custom work needed. And since these SOA-enabled add-ons don’t involve altering the core code base, the expenses and hassles of future upgrades will be greatly reduced.

In addition, modeling tools like Visual Composer and to some extent, new development platforms like the NetWeaver Composition Environment (CE) will empower business users to get a big jump start on their own development needs with less dependency on the technical team. SAP developers were already facing stern challenges from global outsourcing, but the automation potential of web services should further reduce the need for the classic on-site SAP developer.

However, there are definitely some ways of remaining marketable as an SAP developer. In addition to enhancing the business skills I touched on previously, mastering the latest web-based tools and techniques will be very important. The " SAP programmer of the future" is a soft skills/hard skills "hybrid" who has a mix of ABAP and Java-based skills, as well as an expert understanding of how to use SAP’s Enterprise Services Repository and xApps to build programs with re-usable components.

Ignoring "Enterprise SOA" will not be an option. For a little while longer, folks whose work doesn’t yet touch on Enterprise SOA can collect their checks and be blissfully ignorant. But that is going to change. SAP has already service-enabled its core mySAP ERP 2005 release, and by the end of this year, the service-enablement of the entire mySAP Business Suite should be complete. Furthermore, this technology is proving its worth.

Companies are finding that as long as they are on the current SAP release, that they can simply add new Web services for new business functions, and in a way that is much more affordable than custom programming ever was. In other words, SOA is not just hype. Since extending processes through the Internet is a factor in almost every area of SAP, all consultants will need to make sure their skills incorporate these new functions.

It’s important to remember that much of this innovation is about "extending the enterprise," a phrase we first used in the ‘90s before the technology was really there to justify it. Now the technology is very close, and companies want to be able to collaborate with suppliers and partners and open their systems to customers without worry about integrating the back end.

Companies are even starting to use and build "xApps" that sit on the NetWeaver stack and "extend" their enterprise. Web services and "open standards" are the key to delivering on that extended enterprise. The skills needed will be derived from this overall vision, so if the big picture is clear, it will be easier to anticipate where the skills needs will be.

Hopping from industry from industry will be risky business. Up until this point, consultants with solid implementation skills could jump from industry to industry in search of the best project at the best rate. However, both SAP and its customers are emphasizing the importance of consultants who know a particular industry.

I had one SAP product manager tell me that consultants without an industry focus would have a hard time in tomorrow’s SAP market. mySAP ERP 2005 ships with 25 different industry solutions (meaning that industry solutions no longer have separate and sometimes confusing release schedules).

Consultants who know how to apply an industry’s "best practices" are going to be in demand. This also points back to an emphasis on overall business know-how as opposed to configuration skills. So if customers are asking for more industry experience right now, why do I list this as a future skill? Because as much as customers want this type of industry background, the SAP consulting market is hot enough that I’m not sure that SAP hiring managers will always be able to hold out for an industry-focused consultants.

Many of the best SAP consultants have worked in multiple industries. At some point you have to let go of your ultimate wish list and staff your project. But in the future, consultants with a consistent industry focus are going to have a big edge. At some point, it may eventually become a non-negotiable requirement.

THE PRESENT

NetWeaver is for real. There was a time when NetWeaver sounded like name that was bought from a dotcom at a post-Y2K fire sale. But now NetWeaver is serious business, with a host of products under its umbrella that are generating consulting demand right now. (NetWeaver 2004s, the NetWeaver engine that drives the mySAP ERP 2005 foundation release, is also referred to as 7.0).

In the third quarter of this year, NetWeaver 7.1 is due, and NetWeaver 7.1 will have even more eSOA capabilities, including the full runtime version of the Enterprise Services Repository (ESR). One way of looking it at is this: you have to have a strong NetWeaver platform in place before you can begin to move on SOA initiatives. And while there are some flagship SOA projects underway, the adoption of NetWeaver is much more widespread, especially when you consider that Portals and BW have now been pulled into NetWeaver, albeit with adjusted product names (now called NetWeaver Portals and NetWeaver BI).

The problem is that NetWeaver is now composed of numerous products and toolkits, not all of which are equally marketable. So it’s a mistake to imply that all NetWeaver products have the same level of demand. Probably BW/BI is the area of highest demand, but just about all NetWeaver products are experiencing some uptick in consulting needs right now. If SOA is coming up tomorrow, then NetWeaver is happening today.

The Dice search results we got on Business Warehouse and Portals prove that point. We could add that the development tools that tie into NetWeaver, whether we’re talking about Java Server Pages (JSP), Web Dynpro, or XML-based standards like XMI, are also in demand.

BW by any name is rocking. I hit on this in my terminology piece so I won’t go into detail here, but where you’re talking about BW or BI, the demand is there. The upgrades from BW 3.5 to BI 7.0 (part of NetWeaver 2004s) are definitely creating project requirements, and there aren’t enough consultants who have been through this type of upgrade yet. Business Intelligence is here to stay, and I think we can foresee a time when just about every SAP professional has some piece of BI or web-based analytics in their skill set. There will always be BI experts, but I think we’ll see more and more folks who are not experts in BI but who are still a part of this market.

Some industry solutions are picking up steam (retail, public sector). SAP’s vertical industry focus is starting to generated increased job demand in the present. The public sector has been building momentum for years and is looking as strong as ever. Since some public sector projects require U.S. citizenship, active passports, and even security clearances, these are areas where consultants can enjoy a bit more insulation from the offshoring that affects most other SAP areas.

The catch is that not all public sector projects are well-financed, so both full time and consulting positions in the public sector can be leaner paywise. In terms of retail, SAP is also determined to hit retail hard. Retail is perhaps the only vertical left that has Fortune 500 size companies that have not fully committed to a large scale ERP solution.

That may be why SAP pushed so many retail announcements at SAPPHIRE. The SAP retail practice has grown from 15 to more than 500 people in the few years - a clear indication that SAP’s needs in retail are "right now." SAP has been aggressive in beefing up its retail functionality, as illustrated by its purchase of Khimetrics, the analytical pricing and forecasting software product for retail environments.

Upgrades are driving work to the core. This is another area I spent time on in my recent terminology piece so I’ll do the shorter version here. Only a small percentage of companies are running SAP’s ECC 6.0 core release - that means plenty of upgrade action in the next few years.

When you consider that extended maintenance for 4.6C bumps up from two percent to four percent at the end of this year, you have the carrot (SOA) and the stick (increased fees) combination pushing folks to upgrade. "Carrot and stick" markets are typically the most active software markets of all - reference the last SAP "carrot and stick" market of pre-Y2K and how much demand for SAP skills there was at that time.

Consultants in the core releases are poised to benefit, especially if they are ahead of the curve on their project experience around the new releases. Even those who only have training in the new releases (and no hands-on experience) may be in a position to land some good opportunities due to current demand levels.

Of particular demand now? FI folks who have a grip on the new General Ledger, and HCM folks on the HR side who have already gained skills in Performance Management, E-Recruiting and LSO (Learning Solution, E-Learning). All in all, there are more than 300 new and enhanced features in every functional area compared to 4.6C, so there’s plenty of new areas to study up on in an effort to gain the inside track. The technical core is also experiencing a decent level of demand on the Basis side, though many of those tools have been mastered by in-house employees.

One tool that stands out in SAP’s present and future emphasis is the Solution Manager. Since the Solution Manager can be implemented as early as 4.6C and is crucial to future upgrades (you have to use Solution Manager for support/enhancement packages for mySAP ERP 2005), it’s a great piece to add to the skill set now.

CRM is the most active "Business Suite" product. Overall, the Business Suite products are not driving the bulk of the skills demand, but we do continue to see a fair amount of action on the CRM side. In particular, projects pertaining to mobile devices and mobile development seem to be active, as companies look to "extend" SAP to the representatives in the field that deal directly with their customer base. The latest mobile products SAP is pushed in its SAPPHIRE press releases? NetWeaver Mobile and NetWeaver Voice. NetWeaver Mobile is the umbrella product for mobile user access to SAP, and NetWeaver Voice allows access to SAP applications via any phone.

THE PAST

Bread-and-butter ABAP is on the way out. I’ve written a lot about this elsewhere, but bread-and-butter batch data conversion/report generation ABAP is on the way out. Object-oriented ABAP, mixed with Java-flavored tools, is the SAP development skill set of the future.

 "Goodbye to Basis." Another area I touched on in the terminology piece, "Basis" is giving way to "NetWeaver." The skills transition from Basis to NetWeaver is not as difficult as on the development side, but this is still an area where some SAP professionals are going to drive right off the road of career growth while they are busy installing someone’s GUI.

EDI is out, XML is in. There’s still some EDI work to be done for companies entrenched in the infrastructure, but for everyone else, it’s about SOA/XML/Internet-based B2B transactions. EDI skills are no longer a coveted part of the technical skill set for most consultants.

Business Suite products have a questionable future, especially APO. This may be the most controversial statement in this piece, given that the Business Suite is still a major part of what SAP is pushing. And we won’t know the ultimate fate of the Business Suite for a few more years - not until the bulk of the core upgrades are done and companies look more closely at how they might want to "extend" their functionality.

The ultimate enterprise software goal? To achieve a fully-transparent, demand-driven supply chain that connects the enterprise to all customers and partners. SAP would tell you that the Business Suite is needed to achieve this goal. The question, however, is whether these add-on products will prove to be the key to achieving that goal. I think it’s possible that companies will avoid the costs of implementing large add-on suites, instead opting for focused xApps they can tack onto particular business processes that they are looking to extend.

I also expect SAP to pull more and more of the so-called "Business Suite" functionality into the core. This has already happened to BW and SEM, two products pulled into the core in their entirety. In mySAP ERP 2005, SAP also seems to be pulling some of the CRM and SRM functionality back into the core as well.

That doesn’t mean there won’t be work in the Business Suite areas, but how many companies are going to want to spend a year on a complex APO implementation - no matter how good the ultimate benefit might be? As noted, SAP CRM still looks strong, and SRM has some hot areas. PLM remains a consulting niche at best, though we see some small signs of life, and APO is flatlined (this is as good time to acknowledge that APO is not technically the fourth Business Suite product.

The formal name for the fourth product is SCM, and again, many SCM functions are already embedded into the enterprise core. APO remains the flagship product in the SCM suite, even if SAP rarely mentions APO by name anymore). The functionality in these products is important, but will we ever see robust consulting markets based on these apps? I wonder. I see enterprise services and xApps having a major impact on the market for these products.

Best of breed solutions and third party add-ons must prove their value or they are part of history. We do see some third party software solutions doing very well in the "SAP ecosystem." But especially in larger functional areas, best-of-breed is struggling. Best-of-breed HR is long gone, and best-of-breed CRM is rapidly giving way. Going with one ERP vendor for major enterprise functions makes too much economic sense. This is good news for "niche" SAP consultants in areas like Plant Maintenance and Warehouse Management.

Increasingly, I expect companies to standardize these key logistical components on SAP systems. So while best-of-breed software is struggling to stay in the present tense, the more SAP captures the bulk of the enterprise, the easier it will be for consultants who have skills in these supplemental SAP areas. This means that skills in areas like Warehouse Mangement and Plant Maintenance should become more important.

CONCLUSION

There’s only so much SAP you can touch on in one article. I left out some areas where the verdict in still unclear, such as on-demand solutions, which may or may not take off for SAP. The SMB space is now being served by three SAP products, Business One, All-in-One, and A1S (SAP’s new SMB on demand offering).

At this point, only the All-in-One product seems like it might have some consulting potential (the other solutions are too much "out of the box" to generate much consulting demand). I’d put All-in-One on the watch list.

Two more topics are Web 2.0 and Duet. They both got a lot of attention at SAPPHIRE, but while Web 2.0 and Duet will influence SAP greatly, how they affect SAP skills is not yet clear, except to say that all consultants will want to understand how these areas intersect with what they do. But will SAP professionals ever get paid big money to set up or write a blog? Another wild card is RFID.

RFID looks to be a key technology, but adoption is gradual enough at this point that there may not be much of a skills gap. Finally, with the upgrade wave, Unicode may be something to consider in terms of multilingual SAP installations. I’m not going to comment on it here because the factors affecting Unicode are complex, but if your skills touch on it, it’s another tool to keep an eye on.

I hope this article was helpful in terms of separating out the future from the present. We have to be careful about getting caught up in SAP’s grand vision and investing in SOA training when learning the new General Ledger might be more immediately helpful.

We may eventually all become "Composers" and "Repository Keepers," but right now, we are configurators and system administrators. At the same time, keeping SAP’s future clearly in mind is crucial to making the right project choices in the present. SAP almost always gets where it says it’s going to go. It’s the timing that’s the hard part.

Our own roadmap should be based on SAP’s. Hopefully we can be forward-thinking without getting so futuristic that we look like extras from a bad science fiction movie. It’s hard to think about "Repository Keepers" without picturing yourself running around in a silver spacesuit. Beyond that, it remains to be seen how great the skills gap from SOA really is and which consultants will capitalize on that gap.

The best way to handle SAP’s frank admissions of skills shortages is to take them as good news, but not to assume that "everything is going to be ok." The market changes quickly, and companies are cautious and budget-conscious adopters of new technology. Most projects are smaller in scope and take longer to greenlight, which in turns keeps the skills demand from peaking as high as it used to go. Therefore, we should continue with the same thoughtful integration of current and emerging skills that got us to this point.

Site Manager's Note: This article originally appeared on SearchSAP.com in an edited and abridged format. What you have just read is the complete and unabridged version, released for the first time for readers of JonERP.com.