By Herbert Goertz

Now that the Big 4 audit firms (PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young, and KPMG) have restarted their SAP consulting practices, what does that mean for the rest of us?  Ralph Kierberg, for one, thinks it doesn’t bode well.  (See his discussion on the SETAC / KPMG Alumni Group page on LinkedIn.) He predicts the big firms will crowd out smaller players. They’ll either acquire them outright or overpower them with bigger resources, broader geographic reach and higher-level client contacts.  Market consolidation will mean more competition than we have now.

Actually the result of consolidation is usually the opposite — since consolidation by definition, leaves fewer players in the market, hence less competition.

Also, the Big 4 will probably charge high prices. They’ll have to overcome the perception they don’t really care about this business — having already left it once. Smaller clients may fear they’ll be neglected in favor of bigger clients. And big consulting firms often have the reputation (justified or not) of being inflexible and slow. In short, I can think of lots of reasons why the Big 4 won’t be big competition for most SAP consultants.

But here’s the real question — what is the ideal SAP consulting organization?  Is it always a certain size? Is it even always a single company?

The SAP consulting market has never been one size fits all.  And that’s even more true now when projects tend more than ever to require different kinds of talents in different locations for different amounts of time at a moment’s notice.

That’s what’s so great about the virtual consulting model.  We can mix and match consultants by SAP specialty, industry experience, languages spoken — or any of a dozen other variables — and deploy that expertise at Internet speed while dramatically reducing non-productive costs, especially travel.

None of this is going to change regardless of what the Big 4 audit firms do.  Clients will want great consultants regardless of where they work.

By Herbert Goertz

As we start the second half of 2010, I want to share some significant benchmarks reflecting our organization’s growth in size and capabilities. In terms of size, the ECX currently has:

• Over 3,500 members
• Distributed across 62 countries with
• 50% in the Americas
• 27% in Europe, Middle East and Africa
• 23% in Asia-Pacific

As for capabilities, ECX members practice in a growing number of specialties:

• 27% in SAP Basis/BI
• 25% in SAP management
• 15% in SAP SCM
• 9% in SAP Financials
• 7% in SAP HCM
• 6% in SAP SD-CRM

• 11% in other specialties

Members have an average of eight years SAP experience. One hundred of us (with 15 years average SAP experience) provide quality control on the ECX Virtual Helpdesk — prequalifying other members to sit on the helpdesk and making sure helpdesk questions and answers contain sufficient information.

Here’s the key takeaway from these benchmarks:

The ECX Virtual Helpdesk is providing efficient, flexible and deep access to senior SAP talent worldwide 24/7. It is therefore an ideal solution, not only for companies seeking on-demand helpdesk support virtually anywhere, but also for companies that need widely deployed local country knowledge — such as for an international rollout.

That’s where we are today, and from here the ECX is only going to get bigger and better.

By Herbert Goertz

There is strength in numbers. That is why there are SAP user groups like ASUG and partner groups like the IA4SP (International Association for SAP Partners). They exist because members have shared interests they can advance better collectively than they can individually. For example, groups are better than individuals in their ability to:

• Bargain for preferred rates of payments and discounts
• Create political support for government or industry actions
• Establish standards of member performance and certificates of compliance
• Evaluate, approve, and in some cases deliver, services of value to members
• Offer educational programs that promote member professionalism
• Educate everyone on the good work done by members

This concept obviously isn’t new. During the Renaissance, independent craftspeople organized guilds for precisely the same reasons. Take apprenticeship. The guilds invented apprenticeship as a way for customers to recognize certain people as masters of their craft — not for any altruistic purpose, but simply so masters could get paid more. The guild’s stamp of approval meant something — because the guild meant something — for members and for customers. Guilds knew that one of the best ways to raise rates was to protect customers from amateurs and frauds. And they also knew they could only do this as a collective group, not as independent freelancers.

So why not have an association for independent SAP consultants?  The answer is that, in their hearts, most independent SAP consultants still don’t believe they need one. All they know is a culture that says the best way to win is for their competition (i.e., other consultants) to lose. Those days are long gone, of course, but old thinking dies hard.

The objective reality today is that consultants would do much better if they belonged to an independent association with strong leadership, high standards and high-value services for members and SAP clients. But such an association can’t be imposed from outside by a vendor. It has to come from the consultants themselves.  They need to organize it if the association is to attract members and have any real authority. Members might wish to hire professional management, sure, but at the end of the day the association would have to truly be “by SAP consultants for SAP consultants.”

Does anyone want to talk about how to get this started?  Comment here or send me an email.

By Herbert Goertz

In his recent blog post http://www.softwareadvice.com/articles/manufacturing/saps-sme-solutions-a-guide-to-the-product-portfolio-1042010/ Software Advice CEO Don Fornes provides an excellent breakdown of the SAP product portfolio.  He compares SAP’s four main product families (Business Suite, Business All-in-One, Business One, and Business ByDesign) by size, functionality, industry coverage, deployment options and cost of ownership.

As a case study of “you get what you pay for,” the article brings into sharp focus how much SAP’s SME (small and mid-size enterprise) strategy is still very much a work in progress — ever since the 1990s.  SMEs unable to spend at least in the high six figures must choose either Business One, a completely on-premise solution, or Business ByDesign, a totally SaaS offering.  In addition to being either all hosted or all not hosted, both also have significant gaps in functionality and range of industries when compared to their big brothers.  After so many years, this is not exactly the seamless product continuum one might expect from the leader of what is clearly a maturing market.

While that might not be great for SAP’s image, it’s also not great for SMEs.  Typically, they must fill in product gaps themselves.  And then when they grow out of the SME stage, they must also invest in a completely new ERP product set.

But what is perhaps more disturbing than the product gaps are the support gaps.  Business ByDesign is pretty much hands off when it comes to customization and integration.  As for Business One, it is not even “real” SAP, but rather (to quote Don) “a completely different product … developed in Microsoft .Net technologies.”  SAP expects third parties to perform much of the product development, customization and integration for Business One — leaving each SME to build its own support network.

This is also, then, a story of how the not-so-rich often end up paying a greater portion of their wealth than the rich for less value.  In the Business ByDesign case, settling for out-of-the-box functionality is neither a cost-free or riskless option since it probably puts the business in a higher cost, less competitive position.  In the Business One case, building your own support network obviously carries overhead costs and technical risks that, while significant, will likely never show up on an accounting ledger.

All of which helps explain why virtual — or cloud-based — consulting will become an SME support strategy of choice.  That is if the virtual partner meets certain criteria:

• The partner provides the same SLAs (service level agreements) that SAP itself will guarantee a large enterprise
• The typical overhead costs of mapping appropriate consulting resources to the client are transferred from the client to the virtual provider
• Direct costs (e.g., consultant travel) are minimized, reducing SMEs’ per-user support costs to levels more consistent with larger-scale ERP implementations
• Services are finely scalable so the SME never faces disruptive support investments in response to its own growth or change
• The partner is adept at tailoring and mixing hosted and on-premise software for leveraging best-of-breed functionality, industry coverage and cost

An SME that pays less than the larger enterprise should not get less value in terms of consulting quality, investment protection or lower risk.  Indeed, they should probably get more value simply because they face product gaps that larger enterprises never see. Those gaps — in both product and support — will inevitably drive more SMEs to adopt the virtual consulting model.

By Herbert Goertz

I’ve received several emails about our recent invitation to join the ECX as a premium member with the benefits of One-Stop SAP Job Listings and the Virtual Consulting Helpdesk.  Here’s one email:

Hi,

I am interested in joining Virtual SAP Helpdesk Service to earn passive income.  However I would not be willing to pay the $100 in the beginning. Please let me know if I can join. You may deduct this $100 from my fees later on if needed. I have 7 plus years of SAP experience in FI/CO/JVA area and I believe I can be good in providing support there.

Regards,

Sanjay

Then there was this email:

Hello,

Thank you for your offer, but it seems like a typical Internet scam.  You have to pay to become a member and then qualify your knowledge.  Shouldn’t it be the opposite?

Best regards,

Mariusz

My response is that we are offering value, and it is up to our members to decide if it is worth the money.  What is the value?  Premium members can use the One Stop SAP Job Listing — giving them all listings on virtually all search engines with a single sign-on. They also become part of our Virtual Helpdesk Team. 

When we sell our team to customers, we do not sell individual consultants, like a recruiter would do.  We sell the team.  That gives customers the assurance that if one consultant falls down, we will provide a replacement.  Customers are buying the ECX brand, not the consultant’s, and it is my personal reputation that is on the line.

So we must qualify every consultant before we can put them on the team.   We cannot put strangers in front of our customers.  And we cannot qualify everyone who comes to us off the Internet.  We must thoroughly get to know them, which takes time and hard work.  Frankly, $100 does not cover the cost of doing that — especially if we do not know if the candidate will be successful.  What the $100 does do is filter out people who are not really serious.  Even if we decide not to put them on the team, they still get the One Stop Job Listing Service for one year.

We think this is a fair bargain.  But if you think you have a better model, please let us know.  We are always happy to listen to our members.

by Herbert Goertz 

Imagine logging onto a single website to find virtually all the SAP job openings published on the web for any area in any country worldwide?  Well that is exactly the service that the ERP Consulting Exchange is about to offer!

We call it “One-Stop Job Listings.”

It won’t matter where the opening was originally posted — on Indeed, HotJobs, SimplyHired, Dice, Jobster, CareerBuilder — or virtually any other web job search engine.  “One-Stop Job Listings” means you can search all these SAP openings at once.  Forget the hassle of registering, learning, and logging into each and every jobs search engine just to see if there is a job posting for you.

Just think how much time you’ll save seeing all the relevant job openings at once — and how much faster you can start applying for these jobs.  You’ll be able to apply for more jobs faster, and have a better chance of going to the front of the line!  That means a better chance of being considered before jobs are filled!

The BETA version of “One-Stop Job Listings” is available now. The service is offered exclusively to ECX members.  http://www.erpcx.com/job_listings.php

by Herbert Goertz

In the rush of day-to-day business it is instructive to take a step back and see how much progress was achieved in a year. And so as we close out this year I’d like to reflect a moment on how far we’ve come.

In 2009 the ERP Consulting Exchange really took shape. Some significant milestones include:

• We published 70 blog posts by eight contributors mostly about the work life issues facing SAP consultants, a subject that had previously received scant attention despite this industry’s unprecedented economic and career challenges
  
• We launched our newsletter (look for the Winter edition coming in January 2010)
• We rolled out a resume writing service specifically focused on the unique talents, backgrounds and opportunities of SAP professionals
• We designed and implemented the industry’s first database allowing employers to search for consultants by skill, language, years of experience, countries worked and other criteria
• We more than tripled membership — now over 3000
• We greatly expanded the hardware and software resources supporting our SAP system landscape
• We established a successful relationship with Winshuttle as part of our Solution Referral program
• We relocated our corporate headquarters to a new state-of-the-art facility at the University of Central Florida incubator campus
• We launched Herbert’s Team, an elite group of SAP consultants and the first global virtual consulting practice
• We started the Country Ambassador program to sponsor in-country entrepreneurs who represent the ECX locally and coordinate our virtual consulting engagements with the global team
• We partnered with cumulusIQ with whom we launched the first SAP Virtual Helpdesk

We started the ECX because we saw the need for a more open supportive environment for SAP consultants and customers, allowing them to work together more productively during this turning point in our industry. Clearly 2009 was all about foundation building. In 2010 we will see how much of an enterprise we can construct on top of of that foundation. Our goal is to become a well-established provider of virtual consulting services to the SAP customer base.

Happy Holidays to all our members, partners, customers and friends. May we all see great success in the coming year!

by Herbert Goertz

If ever the time were right for an industry anti-vendor conference this seems to be it.  The tagline for Sapience2009 (Cambridge, MA, December 8th and 9th) is “a journey of independence.”  Speaker after speaker (who each pay $10,000) will describe the benefits, strategies, and enabling products for those seeking “all possibilities outside the original vendor’s scope.”

Tradeshows built around a single vendor typically and implicitly promote that vendor — and can falter if the vendor no longer supports the event (think Macworld, which Apple has famously decided to abandon). Not so Sapience2009, whose organizers apparently know a pretty full bandwagon when they see it coming.

So what of SAP’s own efforts to reach beyond the corporate moat?  Nowhere on the conference website does the phrase “SAP ecosystem” appear.

The approach is pure genius.  On the one hand this is an SAP conference — and thus reaches SAP’s very blue chip audience.  On the other, it makes a virtue out of not having SAP’s support.  As such, it is essentially the marketing version of the very strategy its speakers and attendees will advocate. Or to paraphrase Kris Kristofferson, “if you can’t afford ‘em, you got to beat ‘em.”

SAP’s high prices and lock-in practices may have reached a tipping point.  It is not only good business now to beat up on the vendor, but it is also fashionable — which, from a brand value standpoint, may actually hurt SAP more.

by Herbert Goertz

It’s great to see that cloud-based services are starting to attract more general IT media attention, as in Monday’s InfoWorld article called “Startups take SAP consulting to the cloud.”  The article focuses on a couple of companies, one of which is our partner cumulusIQ.  Herbert’s Team and cumulusIQ have been working hard to make cloud-based SAP support a reality.

The article reinforces many of the things we’ve been saying for months:  SAP customers won’t waste resources (time or money) on traditional consulting models for any issue that can be resolved faster, less expensively, and more easily by a virtual helpdesk — especially one populated with world-class consultants like those on our Team.  It doesn’t matter whether customers are large or small, or whether this is a good or not-so-good economy.  Companies won’t spend more money or wait longer for support just because they can — regardless of the environment.  Furthermore, all companies want access to the same tier-1 consultants previously available only to those companies willing to pay the most.

Which brings me to the point raised at the end of the article where Jon Reed is quoted as saying that services like ours are “creatures of the recession.”  That’s like saying that technology only gets less expensive because of recessions, rather than because of innovation.  Of course, SAP maintenance and support prices are not going down — in fact, just the opposite.  However SAP’s prices do not reflect innovation in the underlying support model.  Ours do.

By Herbert Goertz

SAP customers looking to reduce expenses on software maintenance may wish to start paying another provider in addition to the one they already have.  How’s that?  If one provider is already too expensive, how can two be any less?

The answer is in how most support contracts are written.  In addition to paying a fixed annual fee you also pay extra for onsite service calls even if someone working remotely could solve the same problem.  Each service call must be scheduled well in advance — often 90 to 120 days — and at a minimum requires bringing a consultant on site for 40 hours.  That’s a big time and financial commitment, and it usually requires senior management’s sign-off, which delays the solution even longer.  And even when the work is finished, the organization doesn’t become any “smarter” than it was before since little, if any, knowledge transfer occurs.

Compare this to what happens with a virtual helpdesk.  Issues that do not really require onsite intervention can be handled via the Internet.  So you’ll pay far less.  In fact, if the helpdesk can’t solve the issue, you won’t pay anything at all — so at least you’ll know that an onsite visit is actually necessary.  That information will come in handy if you do petition management for onsite consulting.

Either way, the virtual helpdesk ROI is huge.  You’ll save money and fix more problems faster. And the knowledge transfer that comes with using a helpdesk will make your organization smarter — so you’ll need less help in the future, saving even more time and money.