Many modern enterprises spent 2023 preparing to migrate ERP systems from on-premises networks to cloud platforms, all the while seeking to expand their understanding of how to adopt emerging technologies. Will 2024 be the year of reckoning when it comes to the SAP skills gap?
As in years past, organizations still struggle to hire and retain the right talent to facilitate their SAP technology advancement projects. That challenge will loom larger this year for companies faced with moving to SAP S/4HANA Cloud and implementing other potentially transformative technologies.
While organizations are expected to increase their IT investments, with Gartner projecting worldwide IT spending to total $5.1 trillion in 2024, these increases in spending place pressure on enterprises to address the growing talent gap.
In its worldwide IT industry predictions for 2024, IDC assessed that inadequate training for artificial intelligence (AI), cloud, data, security, and emerging tech fields will result in an IT skills mismatch, directly and negatively impacting enterprises’ attempts to succeed in efforts that rely on such technologies. Underfunded skilling initiatives, IDC predicted, will prevent 65% of enterprises from achieving full value from those tech investments. For the SAP community, already faced with navigating complex technology modernization initiatives with a specialized talent pool, this growing skills gap presents a significant obstacle to progress.
Enterprises need employees with the right skills to upgrade and migrate core SAP systems while integrating SAP and non-SAP systems across heterogeneous landscapes. These employees must also gain experience with public cloud platforms and emerging technologies such as generative AI, the successful leveraging of which will be critical to the future of any intelligent enterprise.
The Steep Cost of the SAP Skills Gap
While the IT industry is accustomed to talent shortages, this issue has long been a costly one for IT departments. In tech alone, according to Korn Ferry analysis, the U.S. could lose out on an estimated $162 billion worth of revenues annually unless its businesses can address the need for more skilled high-tech talent. By 2030, as per Korn Ferry, more than 85 million jobs could remain unfilled globally because there are not enough skilled individuals to take them, which could result in about $8.5 trillion in unrealized annual revenues.
At ASUG, last year’s Pulse of the SAP Customer research survey echoes this struggle. Over one-third (37%) of respondents from the SAP community said maintaining knowledgeable staff and staff turnover (specifically related to SAP S/4HANA) hindered their organizations’ technology and business progress, while 30% cited a lack of internal skills to manage new products as an obstacle to growth.
According to technology analyst Joshua Greenbaum, Principal at Enterprise Applications Consulting, the skills gap is felt acutely in the SAP ecosystem due to the looming end of mainstream maintenance for SAP ERP Central Component (ECC) amid SAP’s push for its on-premises customer base to follow its innovation paths into the cloud. “The inability to staff these positions is getting in the way of SAP’s mandates, not to mention customers’ genuine interest in adopting other innovations from SAP,” Greenbaum said.
At the inaugural ASUG Tech Connect, a conference for the North American tech audience that was held in New Orleans this past November, the event’s closing keynote was dedicated to an in-depth discussion of the need for organizations to address a widening SAP skills gap. (The conversation between Geoff Scott, ASUG CEO & Chief Community Champion; Matt Schwartz, Global Head of AWS (Amazon Web Services) SAP Alliance and Partner Network; and Max Wessel, then-Executive Vice President & Chief Learning Officer of SAP Learning, was recorded live as a special edition episode of the ASUG Talks podcast; listen here.)
One takeaway? Amid an explosion of innovative technologies and the increasingly urgent need for organizations to prioritize cloud migration projects, veteran IT professionals and those earlier in their careers must seize every opportunity to continue their education and future-proof their skillsets for the decade ahead.
Reaching the Next Generation of SAP Talent
SAP is encouraging customers and partners to further their professional development and impart their knowledge to younger generations, to ensure that their institutional and foundational knowledge of SAP tech is not lost as their organizations embark on complex implementation initiatives related to SAP S/4HANA, SAP Business Technology Platform (BTP), and SAP Signavio, in addition to SAP solutions that will better enable them to clean their data, standardize their systems, and leverage generative AI.
SAP is ramping up its college recruiting efforts to help undergraduate and graduate students understand the value they can unlock through a career in SAP, and ASUG is furthering this important initiative through its member communities. ASUG Campus Connect, a reimagined collaboration between ASUG member companies and SAP University Alliance institutions, will build upon the SAP University Alliances’ work in academia to educate the next generation, build industry partnerships, and prepare graduates for work in the SAP ecosystem. Through creating a community within ASUG for this emerging talent, ASUG Campus Connect aims to inspire and engage college students, enabling real-world applications of SAP technology outside of the classroom.
Learn From Success, Learn From Failure
One of the most important ways for organizations to upgrade skills and overcome the talent gap is to inspire a culture of curiosity and experimentation, Schwartz told attendees at ASUG Tech Connect. Curiosity is one of the leadership principles that Amazon champions, he said.
“Be curious, experiment, fail,” Schwartz reflected, urging attendees to test out SAP solutions such as SAP Business Technology Platform as soon as possible. “Pick small projects, try them out. If you fail, try again. Give your teams a chance to learn, to learn from success and learn from failure, but do not wait. Do not be afraid. We can all learn from classes, but you need to apply that knowledge as fast as possible. So, find those areas where you can try that experimentation.”
Greenbaum credited SAP with providing more training and certification through its skills recognition programs and digital learning experiences, as well as ASUG’s own efforts to engage the next generation of SAP talent. More could be done, he noted, to build community through in-person, developer-focused events on a global basis. With SAP TechEd taking place virtually for the North American technology audience, ASUG Tech Connect will return in 2024 to deliver a new kind of in-person experience aimed at technical practitioners.
SAP is also addressing the talent gap through emerging technologies like automation, AI, and machine learning (ML). Introduced this past year, Joule is a digital assistant designed to provide informed guidance to enterprise customers. Embedded in SAP’s cloud enterprise suite, Joule is accessible across all SAP apps and programs, drawing upon the breadth of business data across the SAP portfolio while retaining business context to customers get work done faster and drive better business outcomes. Joule combines third-party large language models (LLMs) from partners with real-time customer and business data, enabling the AI assistant to leverage the best LLM for any given scenario a customer might face.
"Everybody Can Be A Developer"
Another way forward is to reduce organizations’ reliance on custom code with low-code, no-code capabilities. Two years ago, SAP unveiled SAP Build, unifying its low-code applications in a suite of solutions aimed at citizen developers. This past year, SAP announced SAP Build Code, aimed at all SAP developers, which offers a set of AI-infused productivity tools optimized for Java and JavaScript development.
Alongside pre-built integrations, APIs, connectors to SAP systems and software from other vendors, guided templates, and built-in SAP developer best practices, the suite will embed Joule, providing code generation capabilities for data models, application logic, and test script creation. The tools offer interoperability with SAP’s ABAP Cloud development model and programming language through a side-by-side extensibility model, enhancing pro-code developers’ abilities to collaborate with low-code or no-code developers working in SAP Build.
“Our philosophy is that everybody can be a developer,” said JG Chirapurath, Chief Marketing and Solutions Officer at SAP, in an interview with ASUG. “If you look at SAP applications, we have applications for every room of the house—finance, HR, marketing and sales, supply chain—and to all those users, our message is that they can pick up SAP Build and be productive. They do not have to wait for central IT to assign them resources to get started.”
Greenbaum noted that while these technologies can help, they cannot do it alone or as quickly as SAP has indicated it needs them to for customers to successfully shift to cloud ERP on a preset timeline. “Investments from SAP and partners will take time to make a dent in the problem, as will upskilling and training,” he said. “SAP could do more to support smaller, boutique partners that can fill some of these skills gaps. Too much of its work in the partner space is focused on global systems integrators and not enough on the rest of the partner ecosystem.”
Every year, business and technology leaders confront the talent gap. But in 2024, the stakes may be higher. Accelerating rates of change, increasing needs for enterprises to modernize their SAP solutions, and the promise of transformative technologies all indicate that efforts to address this issue cannot wait. Attracting and educating fresh talent will only become more critical for SAP customers in the year ahead, as they look to the future of their technology landscapes and seek to ensure the success of their businesses overall.