Trendline

Trendlines from 7/01/08: New, Hot, Unexpected

In this issue: SAP skills gap; CIOs' campaign donations; Mash-ups; Virtual worlds; and CIOs Reap Realignment Benefits.

SAP's Mid-Market Push Creates Skills Gap

SAP's strategy to win small and midsize companies as customers while it expands its new product offerings is creating a widening supply-and-demand gap for these new SAP skills inside IT departments, according to recent IT skills and salary research from Foote Partners.

SAP's expansion has "caused skills and labor shortages that have gripped sizable segments of the employment market in North America and around the world, and created some nasty supply-and-demand fluctuations," notes David Foote, CEO and chief research officer of Foote Partners, in the firm's first-quarter 2008 "IT Skills and Certifications Pay Index." SAP product skills are among those noncertified skills displaying the most dramatic growth in market value during the past year, according to Foote Partners data.

Foote Partners estimates that SAP's products are found inside 48,000 companies in 120 countries. Newer CRM and business intelligence tools now complement the company's omnipresent ERP software. Its NetWeaver application- integration toolset and the announcement of a business process management offering demonstrate further expansion and SAP's desire to pull all these applications together and allow them to work seamlessly.

In addition, SAP's push into small and midsize businesses has expanded its scope and penetration into new customers' IT environments. Foote Partners notes that the SMB segment now accounts for two-thirds of SAP's installed base.

"The combination of these strategies and SAP's obvious success and large, installed base can only cause disruptions in the skills market because it's a well-known fact that jobs and skills acquisition lag new product introductions," notes Foote. However, the SMB market brings its own unique set of challenges. "This segment has different staffing behaviors than large companies," Foote notes. SMBs simply can't pay the high salaries for employees with in-demand skills, nor is it economical to hire expensive consultants. As a result, the SAP skills shortage will most likely force IT shops to "accelerate the learning curve internally" as they try to cultivate SAP skills in-house, explains Foote.

Foote says the skills shortage could influence companies' decisions not to upgrade SAP installations or add capabilities with additional SAP products and services.

"SAP's story is one that we've seen countless times before: high-tech companies as victims of their own success," Foote observes. "With this skills shortage catching up with them, they are publicly acknowledging their dilemma and starting to pursue initiatives to reduce customer stress levels."

-Thomas Wailgum

CIOs, Tech Vendors Spread Political Donations

politics In the race for president, CIOs have no clear favorite candidate, based on publicly available records of campaign contributions. But top executives at technology vendors favor Barack Obama. In an informal, not statistically valid survey of The Center for Responsive Politics online database of campaign contributors, CIO examined the 2007 and 2008 financial contributions of 50 high-profile CIOs and 50 senior executives at technology companies.