Within the last year or so, there's been no shortage of announcements from SAP as to its new areas for revenue growth, such as the SMB space, and evolving product and application strategies, such as with its ERP, BI and NetWeaver offerings. (For more, see "Five Things About SAP's Strategy That You Need to Know.") \n\n\n MORE ON CIO.com\n \n Five Things About SAP's Strategy That You Need to Know\n \n News and Views from SAP's Sapphire Show and User Conference 2008\n \n SAP Pays Partners, Goes with Gusto for SMB Customers\n \n\nIn SAP's eyes, customers now have a smorgasbord of software options to choose from. \n\nHowever, recent IT skill and salary research from Foote Partners shows the "downstream effect" of all of this expansion and new product offerings from SAP: a widening supply-and-demand gap for many of these new SAP skills inside IT departments. \n\nSAP'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 a news release on Foote's first quarter 2008 "IT Skills and Certifications Pay Index." (For the latest on SAP, see "News and Views from SAP's Sapphire Show and User Conference 2008.") \n\n"And there has been a cascading effect in the supply and demand cycles for these skills\u2014it's not happening all at one time," Foote adds. "Some of these skills pay spikes have hit during the last few quarters."\n\n\nSAP's Expanding Product ReachFoote Partners estimates that SAP's products are now found inside 48,000 companies and in 120 countries, and newer CRM and business intelligence tools from SAP complement the vendor's omnipresent ERP software. SAP's evolving NetWeaver application-integration toolset as well as its recent announcement of a business process management (BPM) offering, by late 2008, demonstrate further expansion and SAP's desire to pull all of these applications together and allow them to work seamlessly. In addition, SAP's push into small and midsize businesses has further 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. \n\n"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, and sometimes by a considerable time period," notes Foote in the release. \n\nAccording to the Foote Partners data, more SAP product skills are appearing among those noncertified skills displaying the most "dramatic growth" in market value during the past year. Specifically, of the list of fastest growing skills (which Foote Partners defines as 7 percent or higher growth in value during the past six months or 10 percent or higher in a year), SAP skills comprise 25 percent (for the past six months) and 30 percent (for the past year) of those listed. Among 12 SAP skills appearing are: SAP MDM (master data management), ERP, NetWeaver BI (business intelligence), SAP FI\/CO (financials and controls), and Business Objects. The Five Most Highly Valued SAP Skills to Have\nFoote Partners data reveals that during the past six months these five SAP skills have had the greatest increase in market value.\n\n\nThe Top Five\nIncrease\n\n\n\n\n\n\n\n\n1. SAP MDM (Master Data Management)\n20%\n\n\n\n2. SAP ERP (Enterprise Resource Planning)\n18%\n\n\n\n3. NetWeaver BI\/BW (Business Intelligence\/Business Warehouse)\n16.7%\n\n\n\n4. SAP Business Objects (BI)\n12.5%\n\n\n\n5. SAP HCM (Human Capital Management \/ HR)\n11.1%\n\n\n\n\n\n"As a rule," Foote notes, "growth in pay for a skill indicates demand exceeding supply and will fluctuate over time according to the interplay between supply and demand."\n\n\n\n\nThe Lack of SAP Skills in the SMBSAP has plunged head-first into the small and mid-sized business arena. (See "SAP Pays Partners, Goes with Gusto for SMB Customers" for more on SAP's SMB strategy.) \n\nHowever, the SMB market brings with it 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, he notes, nor is it economical to hire expensive consultants. "SMBs have more constraints, fewer options and much less wiggle room," Foote adds. \n\nAs 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. \n\n"For any employer, that's very hard to do without a lot of discipline, which many do not have, nor do they have the luxury of time," Foote states. "But for the small to medium-sized company, it can be impossible." With such a dearth of IT bench strength to begin with, training just isn't a viable option for many SMBs, he adds.\n\n\nHard Questions for SAPDespite SAP executives' public comments to the contrary, as Foote addresses in the release, SAP has a problem in that a skills shortage could influence companies' decision not to upgrade SAP installations or add capabilities with additional SAP products and services, Foote states. \n \nAt this point, according to the Foote, these are the four key questions that SAP executives need to ask themselves: \n\n1. How many new or improved SAP products can customers realistically absorb, and with what kind of staff? \n\n2. Is everyone on board who has to be to bring these skills gaps to a manageable level? \n\n3. Can SAP continue expanding a base of mid-market users and keep both them and large-company customers happy, especially given that both group's labor needs differ so considerably? \n\n4. If SAP can build confidence in the marketplace that new manpower initiatives will bear fruit, how fast can SAP move on these? \n\n"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."