Prior to the global economic downturn, organizations questioned whether there were enough IT specialists in the industry. Today, as the global recession takes its toll on the IT market, IT organizations are asking, “Do I have too many IT consultants?”. The SAP consulting market is no exception and is also strongly affected by these deliberations. PAC recently published its global SAP skills ecosystem report to address whether the worldwide pool of 160,000 SAP consultants (only those employed within the SAP ecosystem, outsourcing excluded) can meet SAP users’ requirements.

London – March 13, 2009 – According to PAC estimates, the SAP ecosystem (excluding all outsourcing activities) employs approximately 160,000 consultants worldwide, which is considerably more than those working for car manufacturers Chrysler and Ford combined!

The biggest challenge here, in contrast to other industries, is that the know-how is concentrated in a large number of people who are managed by a – still – relatively large pool of companies. In turn, these companies need to meet the extremely heterogeneous requirements of a significant number of customers that are present across all the different vertical sectors and sub-sectors around the globe: altogether 82,000. This is for sure one of the differences versus the automotive industry, for instance, where a relatively small number of OEMs have quite homogeneous demands for their suppliers (ecosystem).

Over the past few years, SAP (and thus its products) has changed considerably, e.g. the introduction of its SOA-enabled NetWeaver. However, while pursuing its strategy and launching new solutions, SAP failed to take into account the impact of its actions on the SAP ecosystem. The software and IT services vendor seemed to assume that the ecosystem would take care of itself and adjust automatically, and at the same pace – a sheer impossibility considering the extreme complexity of the customer and partner network. It is true, the system now seems holistic and balanced from a global perspective, but there is no coherence between the individual local markets, sectors and topics. While for some topics there are still not enough consultants (e.g. BI), there is an excess of support in other topics (e.g. ERP) – even during the last two, quite growth-intensive, years. Moreover, the supply of services has further shifted from one country to another (e.g. ABAP development from Germany to India). This has intensified the instability in the SAP ecosystem structure.

The new architecture behind SAP has also changed the requirements that need to be fulfilled by individual consultants. While in mature SAP markets, demand for ever higher qualifications and expert know-how is high, also in times of recession, more broadly qualified SAP consultants are needed in less mature markets.

From this we deduce the following simple formula:

Implementation markets require broad SAP know-how

Maintenance markets require deep SAP know-how

A few examples clearly show what has caused these local unbalances – although the global ecosystem and worldwide demand seem to be balanced for the moment. While the global partners in the SAP ecosystem are looking for global answers, the importance of the local partners in the SAP ecosystem has not been recognized, and only they can counteract these local unbalances. This role has been underestimated and expert know-how at local partners now needs to be further expanded and boosted.

It is yet to be seen how a “major event” such as the worldwide recession will impact the global SAP ecosystem. Irrespective of this, however, the structural problem of how consulting capacities are distributed within and in between individual markets will remain. SAP and its ecosystem will have to cooperate more harmoniously in order to thrive – and thus have more customers that are successfully supported in their business processes and gain a noticeable added value.

The SAP Services Research Program is a unique and highly interactive offering from PAC.

SAP’s software products are not only an integral part of the IT strategy of 82,000 SAP customers. The products and its related services have become an extremely important part of the IT services industry all over the world. Therefore, PAC has created a new research program to help vendors take advantage of this high-value segment.

In connection with our mission, the SAP Services Research Program is to support IT decision makers and suppliers in the development and implementation of a successful strategy by providing them with a better understanding of the market, the competition and end-users’ behavior.

For further information on all available PAC analyses about the global SAP services market, please contact Tobias Ortwein at t.ortwein@pac-online.com

About Pierre Audoin Consultants (PAC): PAC is a global market research and strategic consulting firm for the Software and IT Services Industry (SITSI). PAC helps IT vendors, CIOs, consultancies and investment firms by delivering analysis and advice to address a range of growth, technology, financial and operational issues.

Our 30+-year heritage in Europe – combined with our US presence and worldwide resources – forms the foundation of our ability to deliver in-depth knowledge of local IT markets, anywhere. We employ structured methodologies – undertaking thousands of annual face-to-face interviews on both the buy and sell side of the market, as well as a bottom-up, top-down approach – to leverage our research effectively.

PAC publishes a wide range of off-the-shelf and customized market reports – including our best-selling SITSI® program – in addition to our suite of strategic consulting and market planning services. Over 160 professionals in 16 offices – across all continents – are delivering the insight that can make a difference to your business.

For more information, please visit our website at www.pac-online.com

For more information on the article, please contact:

Tobias Ortwein,
Tel: +49 (0) 89 23 23 68-26
t.ortwein@pac-online.com

Press Contact:
Shelly Wills
Tel: +44 (0) 20 7553 3965
s.wills@pac-online.com