How Bad Is The SAP Talent Shortage?

Executives worldwide expect over the next three years that it will become increasingly difficult to recruit and retain key skills such as project management and process design and management, according to a new study commissioned by SAP. But what the study doesn't specify -- yet SAP officials acknowledge -- is that skills related to SAP enterprise resources planning products are among the most sought after and in very short supply around the world.

A global shortage of specific kinds of SAP talent has been brewing for some time as the enterprise software vendor aggressively drives customers onto its newer technology platforms, including NetWeaver and ERP 6.0. The scarcity will only worsen if not addressed, says one analyst.

The shortage of experienced SAP talent is so severe that some companies could be putting their deployments at risk, and in other cases on hold, says David Foote, president and chief research officer of Foote Partners LLC, a research firm that has for more than a decade closely followed IT skills and pay trends, including those related to SAP.

"The worst shortage right now is in SAP -- it's chronic, prolonged, isn't improving," says Foote.

Currently, there is a "deficit" of 30,000 to 40,000 SAP project experts worldwide, Don Bulmer, SAP VP of global industry and influencers, said in an interview with InformationWeek.

That 30,000 to 40,000 figure isn't mentioned in the newly released SAP-sponsored report by Economist Intelligence Unit, which in February and March surveyed 587 executives -- including CIOs, CEOs and CFOs -- from the U.S., U.K., Germany, France, and Japan.

The SAP skills shortage goes "beyond the technology" and includes a scarcity of business process knowledge "to maximize the value" of SAP deployments, Bulmer said.

The survey did not question executives about their predictions for skills related to specific technologies or vendor products, but rather asked about their need for more general management skills and knowledge sets within the coming years.

Among the skills or knowledge that organizations predict will be "hardest to source" over the next three years is ability to deal and manage change (47%); ability to think strategically (46%); analytic and problem solving skills (29%); communications and interpersonal skills (26%); project management skills (24%); ability to work on collaborative, virtual global teams (22%); process design and management skills (21%); industry knowledge (19%); and information systems (18%), according to the report. Respondents could pick up to three responses. While these skills include the sort of talent that's needed for successful SAP deployments, Foote says the study is clouding an issue that SAP is trying to downplay -- that SAP's aggressive selling of its newer products has outmatched the availability of skills needed to successfully implement many of those deployments.

"When a CFO or other executive signs off on a large, expensive SAP project, they then don't want to get stuck because there isn't enough talent available to implement the technology," says Foote.

"If you're putting your job on the line, it won't be about not spending, it's about not executing" the project, he says.

To help get more new talent into the pipeline, SAP announced this week that it's building partnerships with universities.

SAP's newest effort includes ramping up alliances with universities worldwide from 900 today (and 150,000 students) to 4,000 in three to five years, with 1 million students who have a better understanding of business processes and disciplines such as supply chain management and finance and how SAP technologies are applied to them, Bulmer said. These aren't necessarily SAP certified individuals, but students who have taken business process curriculum and have access to SAP systems, he said.

But SAP's emphasis on college students won't address the immediate shortages companies are facing now, says Foote. Many companies today considering SAP implementation or upgrades have a need for people with several years of SAP experience, he says.

Grand Valley State University in Grand Rapids, Michigan, is one of the schools that have seen evidence of SAP talent shortages among employers. However, while employers struggle to find seasoned SAP expertise in the Grand Rapids area, companies are prepared to try new ways of building up bench strength through entry-level hires, says Simha Magal, professor of management at Grand Valley State University and director of EPR.

A consortium of 15 CIOs from local and global companies recently promised to hire 1,000 to 1,600 graduates from the university's business school in the next three years providing Grand Valley State prepares those students with specific skills sets -- including exposure to SAP systems, says Magal.

"There are fundamental changes in how we teach technology to students," Magal says. "Companies are looking for [business students] who understand the end-to-end processes, are comfortable with the technology, and don't have to run to the technology people" in order to understand how these systems work, he says.

Local employers are telling Magal and his faculty that they are looking to hire students for jobs such as SAP business analyst, with the understanding that they'll need to further develop these new workers. These companies often try to hire more experienced SAP talent from other regions of the country, however those employee often leave the area later for other jobs. "The idea is to grow talent locally" in hopes they will stay, he says.

In addition to the university alliances, SAP is also building out programs for partners, including e-recruiting and e-learning tools to help SAP user organizations and channel partners find talent and train workers, Bulmer says.