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US Economy is in its downturn currently. No one is being spared from this downtrend. Even SAP has been hit badly. SAP market is at its worst now a days.

 Not only that SAP has been hit badly, but SAP has been hit the most in whole of Information Technology sector. What is the reason for this, considering that SAP has been the major technology area, providing the maximum thrust to the IT industry since many years? The biggest reason for such a situation at this time is that ERP, in general, and SAP, in particular, projects are one of the most expensive projects as compared to the projects involving other technologies. So, when the market is down and the organizations are doing cost cuttings, then expensive projects are shelved before anything else. That is the reason that we are seeing very few SAP projects starting now a days.

 Not only that very few new projects are starting in SAP, but also SAP consulting market is facing another hit. The organizations, already having SAP implemented, in order to cut their costs, are hiring SAP professionals directly, and saving on the money spent on more expensive consulting option for their maintenance and support projects.

 Due to all these scenarios, SAP Consulting market is very badly hit in the current situation. But the market will definitely rebound strongly once the overall economy bounces back. I expect that to happen before the end of 2008.

What do the SAP Experts and Gurus have to say on this??

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  1. Nathan Genez
    What references are you citing?  It’s one thing to get by on your own personal opinion regarding an implementation strategy but the topic you’ve chosen is well supported by many industry metrics.

    The Foote Partners just released a study showing the exact opposite.  Customers are having a much harder time than in year’s past getting in-house SAP talent.  One reason is the strength of the consulting market relative to the total demand of other SAP customers.

    Link here:  http://www.cio.com/article/361015

    This was first blogged about by Jon Reed here (http://www.jonerp.com/component/option,com_jd-wp/Itemid,20/p,41/) as well as by somewhere here at SCN too (The specified item was not found.).

    My viewpoint is the exact opposite.  This market is as strong as I have ever seen it dating back to the mid 90’s.  The key difference is that the established customers are more selective in their projects either with the type/quality of resources or with the rate.  And in spite of my own faulty predictions for the future of SAP and this industry at large, SAP is still selling an absolute ton of new software (I didn’t think back in 1999 that SAP would have this kind of continued sales in this decade).  Their Q1 2008 prelim results were published (http://www.sap.com/about/investor/press.epx?pressID=9406) with an 11% increase in software license sales and a 15% increase in services (consulting). 

    -nathan

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    1. Anonymous
      I think it’s dangerous to judge the “market” based on limited geo-economical data. The US may be hit hard, but other regions, like the UK and other European countries, are booming. Also, skill set demands change, not to mention that early summer is always a bad time to look for that new project…

      My personal consolation, which have always worked during past, short-lived “downturns”, is that SAP provides software and solutions that helps businesses improve their bottom line, thus providing a real ROI compared to other “bells-and-whistles” technologies or fads. If you’re a skilled SAP’er, and willing to pick up new SAP skills (plus mobile), you’re a lot safer than the majority of the remaining IT community, also in the longer term. Any requirements for Baan or Siebel consultants out there?? 😉

      We’re lucky (or fortunate) to be in the SAP camp, and should all be able to make a decent living for years to come, regardless of a few small bumps here and there. SAP rules!

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      1. Anonymous
        btw, wouldn’t this subject have fit better as a posting in a carreer-related forum? Seems to me it’s a bit “meagre” to qualify as a blog…
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  2. Ashima Narang
    I definitely agree with Ashish regarding the current SAP market. Although this is not a very long term trend, but current economic recession has definitely hit SAP projects. The same words are being discussed in the whole SAP consulting fraternity in US. Since the demand and supply equation of SAP consultants has now reversed, so the clients have now become very picky, and are now giving lower rates for the same skills… But I hope the mkt. will jump back sooner than later.
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  3. Vijay Vijayasankar
    I do not see any slow down in the consulting market. Clients have become really picky in who they want to hire for the job .

    The logic seems to be that you pay some one a little more per hour, but you get your job done quicker and with less bugs.

    Another trend I see is the demand for people with multiple skills – like a functional module plus ABAP , more than one functional module skill etc.

    Outsourcing is strong as ever too – just that size is playing a bigger factor. I am sure some consolidation is going to happen real quick.

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  4. Spyros D. Stamou
    Hi all,

    the SAP consulting market always had its ups and downs. The seasonal ups and downs are well known, for instance more requirements statistically appear in the beginning of the year when the budget is finalized and approved for the IT departments.
    More or less I agree to both point of views expressed above. How can that be?
    I have a moto: the truth is always in the midst. I would indeed expect an impact due to the global economic trend (oil prices up, inflation pressures, growth rate reduction, physical phenomena etc.). Some companies will hold their investments in general, going into “stand-by” mode.
    On the other hand there are still some businesses that will keep on following up their long term planning. There will always be requirements for SAP specialists.
    The fact that the demand for SAP specialists and SAP knowledge is more strictly defined and the customers become more picky should not be confused with the market trend. The SAP consulting market will mature more and more, the customers will not pay for an inadequate consultant.
    I have a very good measure for the market trend. Simply go into the various job sites and run a query. Jobserve has 69 contract job offers for SD skills the last 7 days. The same run a few months ago listed 250 openings. Combine that with incoming calls from the agents and you got all the facts to evaluate the market trend.
    Ladies and gentleman we are in recession!

    Best Regards
    Spyros

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  5. Ashish Maini Post author
    I am sorry that I missed on the references part in my blog. My blog not only depends on the news items and data, but also on the observations of different consultants and recruiters related to SAP. SAP consulting jobs slump is being discussed among all the SAP recruiters in US. When I look into Dice (The most important job portal in US) for SAP HR functional contractual job postings, more than 50% of the jobs are only for one SAP Implementation partner, and all for just 2 locations, NJ and FL.
    Further, the below mentioned links give you a hint of the US market for SAP. One of the links is a view of some other persons, based on their market study and understanding.

    http://www.theinquirer.net/gb/inquirer/news/2008/05/01/sap-slump-blamed-market
    http://www.smartmoney.com/news/ON/index.cfm?story=ON-20080519-000445-1254
    http://sap.ittoolbox.com/groups/career/sap-career/sap-opportunity-outlook-in-the-us-2008272?cv=expanded#

    But I really foresee a better situation by the end of the year, as many new projects would probably start by the year end. Also, many new upgrade projects would start by the year end.

    Regards,
    Ashish..

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