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.