Everyone knows about the bottom-up pressure on in-house IT — namely, that IT outsourcing has made it cheaper and more efficient to move basic functions such as maintenance and testing outside the four walls of the enterprise. After ten years, this can’t be called a trend anymore; for enterprises, it’s now a best practice to move tactical in-house IT employees elsewhere, whether to an IT outsourcing partner or to a captive center offshore. After all, most enterprises are not in the IT business, and especially not in the tactical IT business.

There are plenty of signs that there is top-down pressure on in-house IT as well. In three separate conversations — with consultancy Sapient, and with SAP executives Zia Yusuf and Richard Probst — we’ve heard that the top tier of IT discipline is going to be changing is well. This isn’t just an abstract notion; SAP and its partners are engineering real products in such a way as to change the discipline.

The change afoot is that higher-level IT people will have to gain increasing knowledge of business processes. To put it another way, t he business-IT war is over and business won. From now on, IT will have to speak the language of business.

SAP’s products are taking on a process-centric hue, with workflows, continuous refinement, drag-and-drop modeling, and other aspects of business process management. No matter how abstruse the technology at the core of these products, they speak business language and are designed to be usable by process experts, not coders.

As cyberpunk author William Gibson famously said, the future is already here, but it isn’t widely distributed yet. When we talk to people who used to refer to ‘IT departments,’ we are beginning to hear about ‘centers of business enablement,’ ‘process competence,’ and the like instead.

To IT people: learn your code, but remember that you have to learn the language of business processes. The old-style IT department is dead.

Demir Barlas, Site Editor

One of IT’s most frequently asked questions is, “How can I turn SAP knowledge into money?” The answer to this question typically involves becoming a consultant or systems integrator employee. However, SAP itself offers a limited number of employment opportunities for everyone from developers to business-level consultants.

An interesting trend in SAP’s employment practices is the way in which smaller countries are becoming hotbeds of SAP hiring activities. Consider, for example, Argentina, where SAP is currently trying to fill 36 jobs. For Spanish-speaking SAP career aspirants in position, these are plum opportunities — some of which have been listed as open for several months, perhaps indicating that SAP has had trouble filling them. This is an interesting situation because, as some you may know from experience, it is much rarer to find SAP positions that remain open this long in the United States or Western Europe.

Some of SAP Argentina’s jobs don’t even appear to require a knowledge of Spanish, as they are posted in English (other job notices are in Spanish only, or in English and Spanish). Potential applicants, take note!

Demir Barlas, Site Editor

Yesterday, rumors surfaced that Microsoft was in talks to acquire SAP. The news bumped SAP’s shares up, and notched Microsoft’s down.

Of course, in 2004, the antitrust case surrounding Oracle’s acquisition of PeopleSoft revealed that SAP and Microsoft had briefly and unsuccessfully talked about merging.

As luck would have it, SAP CEO Henning Kagermann was in Boston today for the SAP Influencer Summit to give a keynote and hold a press conference. When asked, point blank, whether SAP and Microsoft had discussions about a possible acquisition, Kagermann responded with a quick, definitive “no.”

So, this time it appears the rumor was just that.

Jon Franke
News Editor

There has been something of a slow burn recently on a couple good blogs about SAP SRM 6.0. The word around is that the product, also referred to as SRM 2007, won’t be released beyond those customers currently in the ramp-up phase. Obviously, this isn’t great news for SAP, but how bad is it?

To clear some things up, we talked to Andrew Bartels, an SRM (supplier relationship management) analyst with Forrester Research.

SAP says between 10 and 50 companies are in the ramp-up phase for SAP SRM 6.0 (Bartels puts that number closer to 10 or 20). Bartels said these companies will be able to continue implementing the product, but SAP will not be taking any new customers. Rather, the idea is that SAP will focus on getting SRM, SCM (supply chain management) and all its “alphabet soup” products on SOA (service-oriented architecture) by the fourth quarter of 2008.

So, is this a disaster for SAP? Not according to Bartels.

On the plus side, the SRM 2007 product itself doesn’t have a lot of new features and functionality, according to Bartels. Rather, most of the improvements were in usability, and SAP may have some service packs in the offing to help in that area.

SAP will also continue developing the areas that have needed the most attention — spend analysis, CLM (contract lifecycle management) and e-sourcing — all of which will be available for sale separately.

However, with the next SRM product now likely debuting in the fourth quarter of 2008, that puts a large two and a half year gap between major SAP SRM releases. Also, some customers were counting on the usability improvements and will be disappointed. But we shouldn’t expect a mass customer exodus for SAP, Bartels said.

The bottom line?

“This is not good for SAP,” Bartels said. “But it is not, by any means, too bad for them — they still have competitive products out there.”

Jon Franke
News Editor

In this two-part guest column, veteran SAP expert Jon Reed sounds off on the recently announced Business Objects acquisition.

Coming back from TechEd Las Vegas, we were all taken by surprise when the big TechEd announcements were trumped by the news of SAP’s Business Objects (BO) acquisition. This purchase was a major development for many reasons, not the least of which was because it marked a significant shift in SAP’s “build, don’t buy” development strategy. The biggest question off the bat was a simple one: Is this a good or bad move for SAP?

Matt Danielsson’s Editorial Blog ran a series of entries which provided a very useful assessment of the pros and cons of the BO acquisition. Featured among the entries was Naeem Hashmi of Information Frameworks, who provided a well-balanced look at the impact of the BO purchase.

After Matt posted his initial features, a follow-up question appeared: How will the BO acquisition affect SAP: How will the BO acquisition affect SAP consulting in the BI/BW area? To get a handle on this issue, I asked Naeem Hashmi to share his thoughts on the impact of BO on the careers of SAP professionals. I then placed his comments in an overall context of how I look at the issue myself. Here is what I had to say:

Almost as soon as SAP’s acquisition of Business Objects (BO) was announced, the emails started pouring in. All kinds of SAP consultants, including those who were seriously involved in BW/BI or those who were looking to get involved, were concerned: How would this acquisition affect their career path? To be honest, I never truly understood these concerns.

Let me clarify: I do grasp that the BO acquisition poses some potentially dramatic changes in the SAP BI consulting space. Certainly the “skills profile” of the BI consultant of the future will change as a result of SAP’s BO purchase. But I saw the BO acquisition, which was a major departure from SAP’s “build our own code base” strategy, as a signal of the strategic importance of BI to the product line. And that can only be good news to the SAP BI consultant in the long term.

This certainly jibes with the sense I got from TechEd 2007. On the lookout for hot skills, what I saw was that the “eSOA skill set” would eventually be very much in demand, but right now, BW/BI skills were considered the most sought after of any skill, certainly any technical skill.

So it’s hard for me to see a serious problem for BI folks here – if anything, the BO purchase indicates the huge value SAP sees in BI going forward. And that means that SAP’s own customers are committed to implementing this technology. SAP would not have gone after BO if they had any doubt about that.

In order to get a better handle on how BO will truly impact SAP BI consultants on the skills level, I asked Naeem Hashmi, Chief Research Officer of Information Frameworks, if he would like to share his take on how the BO purchase will impact SAP professionals.

Read his thoughts on the matter in part two of this column.

In the first part of this column, guest expert Jon Reed expressed confidence in the future job prospects of SAP BI professionals. But what does our other expert voice on the Business Object acquisition think? Jon Reed sat down with Information Frameworks Chief Research Officer Naeem Hashmi for a job growth reality check.

“From an SAP BI professional growth perspective, SAP’s acquisition of Business Objects (BO) brings a great opportunity,” Hashmi said. “Business Objects offers a superior and flexible presentation environment. However, whether the back end ends up being BO, SAP BI 7, Oracle, MS SQL, DB2, etc., you still need data warehousing skills to construct a data access environment regardless if you use the SAP BI or BO front end. For that reason, if I am an SAP BI consultant, I do not worry about the BO acquisition by SAP. If I was only a BO consultant, I would be concerned, however.

I see greater hardship for BO consultants learning and becoming fluent in SAP BI. Under NetWeaver, BI training and skills are very important. SAP BI consultants will find it much easier to learn BO and become fluent in BO technology quickly.

Note that the heart of BI usage is not really the technology, but the business side of “business intelligence” and here is where I see the BO acquisition will bring a wide array of good knowledge about building user-friendly business intelligence solutions into SAP (and to SAP BI consultants).

I do not see much of an impact of BO on SAP BI consultants. SAP BI is going to grow. Perhaps there will be a robust RFC (or other high performance data exchange method) to build BO universes automatically, and synchronize them easily from a backend SAP BI broadcaster or other method.

This way, enterprise BI users would still enjoy access to clean SAP and non-SAP data and have the ability to analyze data through a powerful BO user front-end using local universes. At this point, the SAP-BO integration plans are still on the drawing boards, so we’ll have to see how the future BO roadmap will evolve towards disappearing within the SAP Solutions. But at this point, the outlook for SAP BI consultants looks promising.

So what can an SAP BW or BI consultant do to prepare for the SAP BI profession for the future?

1) Take some BO training for your short-term competitive edge. Learn the business intelligence language of non-SAP business users. SAP BI consultants need to become “enterprise bi-linguals.” Learn the BO Data Integrator (which is the Acta ETL tool), which could eventually become the SAP ETL tool for non-SAP data sources without coding ABAP.

2) Get some training in Enterprise Architecture (EA). This will help you understand the actual business processes that span across SAP and non-SAP solutions, how people use information and when/how/why they make decisions that pertain to the BI side. You will be a better BI consultant with some EA understanding, and this will enable you to diversify your profession as well.

3) I would also suggest BO consultants start learning SAP BI and get used to the SAP BI lingo. The BO universes will disappear from the SAP universe sooner than you may have imagined. Prepare yourself with SAP BI.”

I think Naeem has summarized this situation well, both in terms of the big picture of SAP BI and the next steps SAP consultants can take. In addition, he’s shared some useful pointers for BO experts in the midst of this big corporate changeover.

However, there is one other aspect to consider, which Naeem brought up in his original SearchSAP commentary on BO:

“The bad news is, we’re now seeing a momentary confusion among SAP BI customers and consulting partners. We have many different products with different infrastructures, usage and life cycle management environments. Just a few month back SAP acquired OutlookSoft, a corporate performance suite, and before that we saw the Virsa acquisition.”

This is an important point. Naeem is correct that the BO acquisition has definitely created some short-term customer confusion, for understandable reasons. It’s possible we could see the immediate demand for SAP BW/BI expertise go down as SAP customers put the breaks on certain BI initiatives until they determine the best way forward, what their BO options are, and how the two frameworks will be integrated.

However, there are so many ongoing BW and BI projects, covering so many different kinds of initiatives, that I don’t expect a big adverse impact on BI consulting demand. For consultants trying to break into SAP BI, this may create yet another avenue, by mastering the tools on the BO side and approaching SAP from that direction.

The confusion we see in the shorter term about BI should be cleared up for the longer term. I expect in the end, we’ll see even more demand for BI consultants as a result of this acquisition. It’s never ’smooth sailing’ with SAP for any consultant, and the BO acquisition could create some choppy waves for some, and make it a little harder for junior-level BI folks to push ahead. But I see some promising shorelines ahead for the BI consultants who realize that this development is, more than anything, a recognition of the strategic value of their work.

As SAP shifts from a transactional system to a business process platform that leverages transactional data, BI is in a crucial product position. That strikes me as very good news for the BW/BI consultant.

Bottom line: SAP BI professionals have little reason to worry, but Business Objects experts would be wise to start cracking the SAP books sooner rather than later. Do you agree? Are there factors in play Reed and Hashmi are missing? We want to hear from you — please send your comments to mdanielsson@techtarget.com, where one random submitter will receive a free copy of “SAP System Landscape Optimization” courtesy of SAP Press.

Matt Danielsson
Editor

RFID, radio frequency identification, is one of those topics that come and go in the news. Unless you’re working with supply chains on a daily basis, RFID may not be at the top of your IT watch list. Well, there are some forces in motion right now that may have an impact on just how pervasive RFID technology will be in the years ahead.

IndustryWeek just reported that China alone is plunking down nearly $2 billion on RFID technology in 2007 — out of a global $5 billion spent on RFID. This is significant in that economy of scale kicks in, where more business equals lower prices as the technology becomes commoditized. The big barrier for widespread RFID usage up until this point has been cost (and reliability, to some degree — another issue that tends to be worked out as business picks up). China’s RFID ambitions may not drive the price of passive chips all the way down to the magic 5-cent barrier, but it’ll certainly help.

Indeed, as a technology in itself, RFID has performed well and has definite business value. Unfortunately, it also comes with a certain stigma, especially when the discussion moves from tagging shipping containers and onto tagging people. You’ve probably heard the benefits of human tagging — hospitals can get immediate medical information from an unconscious patient etc. — but several customer advocates and interest groups have taken offense at the invasion of privacy and potential for abuse.

There is currently a bill underway making California the third state to ban involuntary RFID tagging of humans. The word “involuntary” sounds pretty reassuring, right? However, as digital media law expert Jonathan Handel noted:

The bill only applies to employers and employees. That leaves open a host of other scenarios. One day soon, no doubt, prisoners will be required to be chipped as a condition of parole, probation or house arrest […] registered sex offenders, [then] illegal aliens, welfare recipients, parents concerned with their kids’ safety…

Granted, it’s quite a leap from China’s Olympic Games preparation to parents implanting their kids with RFID tags, but let’s face it: The rise of RFID in commercial settings will inevitably lead to increased options for usage in non-commercial settings. And the baggage that comes with that side of RFID, inevitably impacts the other side as politics, fear and confusion around a new technology tends to muddle the water for all players involved. Let’s hope the market is wise enough to play it safe, ethically and otherwise, in the years ahead.

Matt Danielsson
Editor

SAP PLM (product lifecycle management) is growing, and that means it’s time for SAP professionals to pay attention. Here’s what veteran SAP jobs expert Jon Reed had to say about the career opportunities a PLM surge may bring to your industry:

SearchSAP.com’s recent piece on the growth of the PLM market bodes well for SAP consultants for a couple of reasons: First, because PLM is becoming more central to corporate business processes, and second, because more and more companies are choosing the add-on extensions from their ERP provider instead of opting for best-of-breed solutions. This should be the case for PLM buying decisions also. We can also be confident that SAP puts a lot of stock in its own PLM product - PLM is a highlighted part of SAP’s Business Suite offering.

So that’s the good news. The more sobering aspect is that we have heard a buzz about PLM consulting from the year 2000 onward, and we have yet to see a big uptick in demand for PLM consultants. It’s important to realize that until the demand for a particular product becomes widespread, the consulting market will be limited to SAP’s own service line, its Tier One partners like IBM and Accenture and a handful of elite independent experts. A few boutique specialization firms round out that picture. Up until recently, that’s been the case for PLM, but we’re starting to see more widespread adoption of SAP PLM. I think we’ll see an even bigger surge in the demand for PLM skills a couple of years from now. At that point, more companies will have their core SAP upgrades behind them and will be looking to build on those long days of project work with strategic product line extensions.

That’s why I personally think the SAP PLM market will probably see its greatest activity in the 2-5 year window ahead of us. But it never hurts to add some PLM skills to your toolkit. The next question is: How would you go about that? Like most areas of SAP, there are numerous entry points into PLM consulting from both the functional and technical side. But let’s focus on the functional PLM opportunities. I see a couple of classic PLM profiles that work out well for functional consulting. One is that of the PLM industry expert who is new to SAP but has deep PLM and engineering experience outside of SAP.

These folks can be a real asset, especially as full-time employees who are pulled onto an internal project team. From the SAP side, the most common entry point I have seen into PLM is from that of the logistics-oriented module set including SD, MM and PP. We are also seeing some PLM project activity in the process industries and the Environmental Health and Safety area, so there are some entry points into PLM from those with industry expertise and SAP vertical experience in one of those two areas.

Finally, SAP is starting to gain some traction with its ECM (Engineering Change Management) product, so we are starting to see more PLM-ECM jobs. SAP skills associated with such roles include project/portfolio management, project collaboration (cProjects), design collaboration (cFolders), as well as CAD/CAM and DMS platform integration. We’re also seeing some PLM-related activity connected to the PPMDC Business Package, an up-and-coming “xApp” from SAP. That’s a lot of alphabet soup there, but if those acronyms are familiar to you, that’s a good sign that PLM consulting might be right up your alley.

Adding any of the above tools to your SAP skills would begin to position you for PLM consulting, and as the demand for SAP PLM skills picks up, you could be in a great position.

Jon Reed is the President of JonERP.com, an interactive web site which features Jon’s SAP Career Blog and his podcasts for SAP professionals. Jon has been publishing SAP career and market analysis for more than a decade, and he serves as the career expert for SearchSAP.com’s “Ask the Expert” panel.

SAP PLM (product lifecycle management) is emerging as a growth area in the enterprise in general. This is hardly a surprise, seeing how innovation is becoming the key competitive factor in the global marketplace. That means ERP vendors like SAP, Oracle, IFS and others have to stay on the ball to retain and up-sell existing customers.

Today, SAP upped the ante with a slew of PLM enhancements. We can expect new portfolio planning processes and portfolio management capabilities by the end of this year, followed by an extensive interface overhaul of the SAP PLM interface in 2008. This move will cut down on manual tasks and training time. 2009 and 2010 will see even further integration support, along with tidbits like new product information management capabilities and enhanced RFID/barcode functionality.

This is part of SAP’s plan to outmaneuver arch-rival Oracle, which in turn made headlines with its $495 million Agile acquisition earlier this year. But is SAP equipped to pull this off? Blogger Chris Kelley is skeptical. PLM is ‘messy’ by nature; it has to be flexible, juggle multiple input sources and so on in real time, he said. The strength of ERP titans like SAP has always been that rock-solid structure that prevents messiness.

“PLM is just too different from what they are good at,” Kelley said. “It’s too ‘miscellaneous’. Its too dynamic. Its too creative.”

Roy Wildeman, senior analyst for Forrester, doesn’t agree.

“Manufacturers that are also SAP ERP customers will want to investigate SAP’s PLM offering,” Wildeman said. “[Look closely at] the potential integration benefits from interdependent process areas like project and portfolio management, direct material sourcing, and configuration management.”

Stay tuned as we follow up with SAP career expert Jon Reed’s take on what this PLM growth trend brings in terms of new job opportunities tomorrow.

Matt Danielsson
Editor

Earlier today, SAP released its Q2 2007 earnings results. Usually we leave coverage of that type of thing to the financial publications, but when we saw that some were expecting SAP’s profits to drop for the first time in three years, we figured we’d have a listen to SAP’s senior management roundtable.

As it turns out, SAP came out looking pretty good. Profits in Q2 were 449 million euros, compared with 415 million euros in Q2 of 2006. License sales checked in at 715 million euros, above the 676 million euro average forecast. For those interested, there are many more financial statistics in SAP’s press release.

Henning Kagermann also got into A1S a little more, saying we can look forward to learning the product’s real, market name, example customers and more details about the release schedule in September.

An interesting question that came up was if SAP expected its enterprise customers to see the on-demand A1S and say, “hey, we want that too!” Kagermann’s response was as vague as you would expect, but did give some insight:

Clearly we will leverage some of the innovations [of A1S] for large enterprise clients, as we leverage our experience from large enterprise clients in the set-up of the system because it’s a “suite in a box”… in our case, innovation goes top down and bottom up. So, you will see over time more and more how we are doing it, you will see more clarity at Sapphire. And, believe me, our large clients are pretty happy with the setup.

That comment seems to keep the door open for SAP ERP on-demand beyond the midmarket sometime in the future, right?

Robert DeSisto, a vice president at Gartner Inc., agreed that larger enterprises would be watching A1S with interest, and agreed with SAP that the original recipe A1S is not designed, or suited, for them.

“People in the higher end will want the usability and concepts that are used in A1S, but they will quickly see that this tool won’t work for them,” he said.

While the press conference lacked any of the thinly veiled shots at competitors that sometimes make these calls interesting, there was one question that generated a good quip from Kagermann:

Question: In what ways are you missing Shai Agassi?

Kagermann: “I’m missing him in my heart… but not in my business.”

Jon Franke
News Editor