The case of the disappearing experts
With the ongoing slump in SAP opportunities (since the economic meltdown) many SAP consultants have been out of work for a long time now, many are returning to their previous professions for their trade to support themselves and their families financially.
Senior SAP consultants who offer a tremendous amount of experience and knowledge to their clients are leaving the industry, creating a massive knowledge gap.
There are many causes of the out flux of these experts:
- With the recession causing fewer opportunities within companies, with their IT budget being slashed there has been a reduction in the overall number of positions available at any level.
- SAP customers are usually reliant on a set ‘ preferred supplier list’ (PSL) to provide them with any freelance consultants they require – however agents who are offering these also are looking to maximize their profits. From their point of view, it is better to deliver a consultant who they can get more commission from – with PSL agreements, there is generally a cap to the commission rate that can be charged. However, if a consultant goes through 2 or even 3 agents to get to the end customer, that equates to 3 or 4 layers (tiers) of commission. With many of the SAP agents having the same “owners”, they get their margins that way. That does not help the really professional consultants as they are naturally more expensive, they are struck off as ‘too expensive’, even though they would be within budget if there was only one single agent (layer) charging reasonable fees.
- Consulting house staff are being laid off while their employers have no suitable project work for them. Leaving consultants “on the bench” is a costly option, but sacking them leaves a void when a project is won as re-hiring and re-training is both expensive, unreliable and time consuming. ‘Renting’ these “on the bench” staff out on short term projects (as contractors) is a possibility, but still a very new solution to address this issue, however it does improve ROY and staff retention while also saving time and creating a “team spirit”. However, this solution is only viable with the removal of SAP agents – who would naturally head hunt from this unique pool of resources (if they were allowed access) which would be of no benefit to anybody.
- Expectation – with a reduced budget SAP customers and even consulting houses are “expecting” to have a reduced level of experience, so the fact that the clients are offered “less experienced consultants” is easily explained – however, without the agency “layers” or “tiers”, their budget actually would allow a far greater selection of consultants to choose from. Budgets for SAP projects are fundamentally no different to any other budget, in that if you spend the funds wisely, you can achieve some excellent value for money – but the key lay in ensuring that most of the budget goes to the consultant and not to layers of agents.
- Senior SAP consultants have worked hard to get where they are and generally would expect to be able to rely on their previous employers to recall them for more work – but with many companies rigidly sticking to their PSL they are now unable to hire directly. Some still have this as an option, but these numbers are reducing monthly. This level of loyalty is to be commended, but at what cost? The aim is to produce the best SAP solution with the lowest possible cost in terms of both money and time, to achieve this, there is sometimes a need for flexibility, after all, many SAP consultants have agents that they will simply never work with (for one reason or another) which instantly reduces the selection available.
- Perception – most customers believe that the rate they are charged, is the rate that the consultant is charging and the commissions are small – this returns to the above point, but should not be overlooked – “layers” can represent a staggering amount of budget, with consultants receiving no more than 40 or 50% of the hourly rate. This can not be seen as fair or reasonable, it leads to consultants being unhappy along with high staff turnover. Added to this, consultants will often perform to the level they are being paid for, if they “feel” they are being taken advantage of, they will simply not perform – a natural enough response, but not helpful in a project team.
- Cheap labor from certain countries, there are now many countries who provide cheap labor costs. After the off shore practice was found to be largely unsuccessful, the SAP market has taken to hiring cheaper consultants – the quality of many, are improving and some individuals are simply excellent at their work. Knowing who you can rely upon, is still a very large problem in the industry today, but with companies watching budgets more than ever, the quality issue is almost a side note. Until there is the same realization as there was with the off shoring, that quality of delivery determines the quality of the final product (plumbers and builders etc are usually hired based on reputation and references). SAP consultants also need to prove their worth to allow a rational choice to be made when hiring them. There are many sites that offer references etc but there are not that many SAP dedicated solutions out there that offers references of any SAP consultant free of charge to anyone in the SAP industry (including the consultant’s personal references, experience and training).
Why would you hire without checking a persons reference, regardless of what job they will be doing?
Due to these factors, among others, more and more senior consultants are finding themselves out of work for long periods of time – stretching into years now.
The reality is that SAP itself, is pro-actively working to upgrade their products and even their own certification program to react to the market situation. Without working in the industry, there is only a finite amount of time before skill sets become obsolete and re-training is needed.
When that is combined with the above problems, consultants are asking themselves some very tough questions, which are leading them directly from the SAP market completely.
This is not a healthy situation, though fresh faces are always needed, there is always a great value in the experience earned through years of work, which can not be replaced by budgetary solutions alone.
SAP consultants need to stay up to date and in a world of pro-activity they need to react or leave the industry permanently. The days of direct search, select and contact have well and truly arrived, with recruiting moving from the old fashioned “call an agent” to the internet ready solution for instant, accurate and reliable results.
There are many excellent SAP consultants available on the market, however, with the growing out flux of specialists, it pays, now more than ever, to take your credibility into your own hands to ensure that your expertise is recognized, as offering the knowledge and experience that the industry can’t afford to lose.