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SAP Skills Shortage Costs SAP's Customers, Partners and, Ultimately, SAP AG

ERP, NetWeaver and BI skills development are a priority for SAP as the spread of its software outpaces the supply of people to implement it. SAP now reaches out to prospective IT workers and offers online courses in multiple languages to attract new talent to the SAP ecosystem.

By Thomas Wailgum

June 12, 2008 — CIO — SAP executives knew they had a problem. By early 2007, after several years of quarter-over-quarter growth, senior decision-makers at the German software giant, including co-CEO Leo Apotheker, were hearing more and more about an alarming shortage of SAP talent in the marketplace.

In the SAP "ecosystem," as execs like to call it, those with SAP application skills and product expertise were becoming an endangered species.

"Leo called us in for a discussion," recalls Joe Westhuizen, SAP's vice president of education strategy and business development. "He said that he had been talking to SAP's customers and partners, and that there was a common thread coming through: That it's difficult to find qualified people, and it was impacting their ability to implement on all sales that they've been executing."

The figures cited by SAP today are eye-opening: a dearth of some 30,000 to 40,000 SAP experts worldwide to support its products and customer base.

That deficiency, in turn, has created "some nasty supply and demand fluctuations," notes David Foote, CEO and chief research officer of Foote Partners, whose data shows that the pay for sought-after SAP skillsets has dramatically increased during the last year, a financial burden on many enterprises. (For more, see "SAP's Push Into the SMB Market Is Creating a Skills Gap for IT Departments.")

All of this "downstream" turmoil has unraveled at an inopportune time for SAP because it has embarked on several new product and application strategies, which necessitate even more talented people with even more in-demand skillsets: new NetWeaver, business process management (BPM), BI and master data management (MDM) products as well as its omnipresent ERP software (in this case, its latest ERP 6.0 release). (For more on SAP's strategies, see "Five Things About SAP's Strategy That You Need to Know.")

In addition, SAP's push into the playing fields of the SMB market, where they have never had a presence and see much opportunity, will demand the "right balance" of skills in the marketplace, Westhuizen says.

SAP's problem might sound like a problem borne from success: too much demand for its software and not enough talent to implement and service it. But it has become a serious business challenge for SAP. "It does point toward success," Westhuizen says. "But very quickly success can also become a noose around one's neck."

 

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