ERP skills: The ups and downs of an ERP career
So you're an ERP consultant. How do you see your future? Are you worried about the way things are going?
So you're an ERP consultant. How do you see your future? Are you worried about the way things are going?
After all, ERP has had a chequered career. After the heady days of the 90s it suffered post-Y2K blues, with many commentators saying that its day was done: costly and lengthy implementations had been carried out at most of the big blue chips and e-commerce was the new buzzword. The main vendors began to reinvent themselves, moving towards a new world of extended enterprise applications, such as supply chain, CRM and e-collaboration. And many of those who had stampeded into the ERP sector worried about their jobs.
So where are we now? Recession, exacerbated by the events of 11 September, has meant that many companies are tightly controlling costs, laying off staff and putting investment on hold. But, at the same time, vendors like SAP and PeopleSoft are seeing growth. Alastair McGill, marketing director at the latter, says the company’s fourth quarter and year end figures for 2001 registered a 19% increase in revenue. For SAP sales increased by 17% with licence revenues up by 5%. And further down the food chain, things don’t look so bad either. Steve Kirk, operations director of extended ERP solutions provider Frontstep, which sells its Syteline product to the mid-sized manufacturing sector, says: “After two tough years for the sector which have shaken out the market a bit, we’ve just had our best quarter ever. We see a slow upturn ahead.” So what does the future hold for the ERP consultant? A recent report from research firm IDC gives ground for optimism. It predicts significant growth in the Western European market for services around ERP applications, from $15bn in 2001 to $24bn by 2005.
Says Dominique Raviart, senior research analyst for IDC EMEA: “Last year there was a lot of talk about the end of ERP services and many consultants were out of work at the beginning of 2001. But we see solid growth in this field. A lot of large enterprises in Europe have implemented ERP systems already but there is much to be done in terms of application management, integration and extensions into e-commerce, private marketplaces and supply chain.” He sees opportunities for ERP consultants in service organisations like consultancies, end-users, who like to have someone inhouse to finetune business processes, and the manufacturers themselves.
However, he warns, this is a maturing marketplace: “It is growing but will do so less and less.”
Mary-Sue Rogers, who runs PricewaterhouseCoopers’ PeopleSoft practice in EMEA and is also involved in Oracle and SAP work through her role as global head of human capital solutions, is seeing pretty constant demand in the UK ERP marketplace, although “it is not nearly as booming as it was pre-Y2K or even pre-11 September.” Work is a good mixture of large engagements and tactical point solutions, where clients want to maximise and extend their investment, she says. “Oracle, SAP and PeopleSoft have all produced significant new releases in the last 18 months so there is quite a lot of upgrade work and extensions to maximise what is there.” She thinks there will be continuing demand for ERP skills. “All the analysts are anticipating growth, not the intergalactical growth of three to four years ago, but still very healthy growth over the next three to five years.”
Andrew Munday, head of solutions marketing at SAP, says: “The burning issues in most sectors over the last 18-24 months were CRM and supply chain management. But as marketplaces became much more competitive in 2001, with some areas going into recession and certainly since 11 September, we have seen a slight refocusing in terms of basic business strategy.
Many organisations are going back to their original ERP implementations to see if they can maximise effectiveness, strategically improve processes and drive out more costs.”
He says SAP has never really moved out of the ERP space, pointing out that while its marketing activities focus more on e-business, collaboration, CRM and supply chain management than ERP, the starting point for any organisation has to be getting the latter in place.
But, the fact that most big corporates have already done this means that the big players are now competing with second-tier vendors for the SME market. SAP is planning a major push in Europe into this sector, says Munday. “ERP systems are becoming more attractive to smaller companies because of the likes of hosted applications and because the reduction in implementation times of ERP has made it a much more attractive proposition for smaller players.”
This has had a knock-on effect in terms of the kind of consultants SAP employs. “There is a greater demand for people to be able to show experience and articulate solutions in the ERP space in specific industry environments.
A lot of our clients expect help and guidance in building their business strategy, on what opportunities ERP can bring to them and the best way to go about implementation: i.e where’s the quick return on investment and the quick business improvement.”
Munday is optimistic about the future for ERP consultants, citing the 100 new clients SAP added to its UK base last year as a driver. “I think there is higher demand for good, broad skilled, experienced consultants now and that will continue to grow as ERP is deployed to smaller organisations,” he says. SAP also has designs on the Asia-Pacific area and Munday anticipates the use of Europe-based consultants to develop local skill-sets there.
SAP expects its own consultants to have the ability to be flexible in terms of personal development because the environment is changing so rapidly.
Says Munday: “We are moving from an intensely focused ERP world within an enterprise to Internet, e-business and collaborative working. These are all mindsets in implementing software solutions that require change in the way you view what you are doing to do it most effectively. So flexibility and the ability to develop fairly quickly as new ideas come into play in the marketplace are certainly in high expectancy today.”
Peter Koerting is head of Deloitte Consulting’s technology group in Germany, with responsibility for ERP, CRM and supply chain development services.
He sees many opportunities for ERP consultants: “A lot of clients would like to jump on the e-train but find that their ERP legacy systems are not in the shape necessary to sell a product over the web or do a pan-European supply chain initiative. For example, there are quite a number of companies out there that say to the market, yes, we are fully on SAP, but when you look behind the scenes they have 20 different SAP instances, incompatible with each other. Different material numbering systems mean that a product number can differ in the UK and Germany. If that is the case how can you set up a website and sell your products over the Internet?”
In addition, says Koerting, companies involved in mergers and acquisitions often find that they have incompatible systems and different software releases, so that integration work is demanded.
“There is a market for new technologies and we are trying to get our share of that but there is also a huge bulk of traditional ERP work to be done. Traditional ERP consultants will have work for some years. For instance, a recent SAP Germany meeting revealed that there are about 220 clients still running R/2 – that is an upgrade market in itself.” Such companies would be well advised not just to do a technical update but also to get rid of old processes, which would hinder later incremental initiatives such as CRM or supply chain, as well, he says. The approach used by the majority of clients in the past was strictly functional and modular, he says. “What they didn’t look at was a complete process, like a make to order process. They chopped into five individual pieces an ERP system which logically belongs together, so can you expect their systems to work seamlessly together?”
The changing environment means that the days of the functional consultant are numbered, he adds. “Five or 10 years ago, if you knew the purchasing functionality within SAP, for example, you were the purchasing hero and high utilisation and chargeability by clients was guaranteed. Now clients expect that consultants will bring a good process understanding to the table, how purchasing fits into the overall procurement process in a make to order process and so forth, and understanding of their industry. After all there are some interesting differences between a consumer business, an automotive supplier and a healthcare company,” he says. The ideal consultant, therefore, is industry oriented, process thinking and knowledgeable about an ERP package and what to do to get maximum benefit out of it, he says.
CRM and supply chain management are hot areas for Deloitte at the moment, and as clients want neutral advice on vendor selection in a confusing marketplace, the firm is breeding a type of supply chain consultant with understanding of many packages. Says Koerting: “Obviously they would specialise in one, whether i2, SAP, Manugistics or whatever, but understand the others as well so that they could discuss the pros and cons of different packages.” At the implementation stage, of course, he says, a different mix of consultants who specialise in that particular package is called for.
Client demands have affected recruitment, adds Koerting. “Five years ago you could have two very knowledgeable people on a project and stuff it with more junior people who would grow on the back of the account.
Clients do not accept that any more. They want smaller, more educated teams who can hit the ground running: they would rather have five very good people than two very good people and eight average ones.”
PwC’s Rogers agrees. “Clients want people who have been there and done it, mature consultants with length and depth of experience. To that end we have reduced graduate numbers and are looking much more at the experienced hire market.” The skills in demand vary by package, she says, depending on where they are selling and where their strengths are. “In SAP, for example, we are looking for implementation experience in SAP portals, mySAP.com, employee self-service, and procurement. In PeopleSoft, its CRM, as its new applications are seeing good uptake in the market.”
She looks for what she calls “50-50 people”, who combine good technical understanding of how you put in a portal, for example, with understanding of the business context. “Such people can sit comfortably in either a process business discussion or a technical discussion. We are still looking for deep architecture and technical skills but the majority of our demand is for 50-50 people in the newer areas.”
SAP and Oracle practice Mi Services is very busy, says Julian Peters, principal consultant in SAP and supply chain management, “but not in the traditional sense of ‘we’ve got seven projects worth £2m’. A lot of companies have the backbone and want optimisation and additional peripheral functionality, such as supply chain, CRM and business information warehousing.”
Peters sees a continuing role for ERP consultants. “The installed base is a living beast that needs maintaining, and with new functionality and upgrades too there is always going to be need for consultants – but perhaps not quite so many of them.”
The firm is always on the look out for good people – Peters himself joined four months ago with a number of others – and insists on a mixture of systems and business experience.
He left Druid 18 months ago to join a dotcom with a web-based HR offering and when that went down the tubes, decided to move back into consultancy.
So how easy was it to get a job at the back end of 2001? “I had some options but a number of companies I talked to suddenly went into headcount freezes.
I felt there were options out there but I know people who have been made redundant from ERP consultancies who are not just walking into jobs in a few days as a lot of people used to. They are having to fight for them.” He sees that as a reflection of the recession: “It is a buyer’s market,” he says. “There are lots of people looking for work.”
PeopleSoft’s McGill agrees. “At the moment the supply side of the market is more buoyant than it has been, allowing us to acquire some very talented people with a lot of experience.”
From the technical consulting angle PeopleSoft is looking for people who have experience in Internet architectures, he says. “We are also looking for people with application area expertise in HR, financials, people and supply chain. We expect growth in 2002 to be around CRM, supply chain management and payroll. So the consultants we have taken on reflect those expectations.”
For recruitment consultancy Millennium, the most active recruitment area involves SAP, says MD Philip Keet. “We are seeing quite a lot of demand for SAP people from the end-user community and consultancies,” he says.
Andrew Roberts, a recruitment consultant specialising in ERP with management consultancies at Prism, says: “The demand isn’t there as it was 12 months ago but perhaps that is a reflection of the economic climate as much as anything. People with good skills do get jobs and are still in demand.”
Nicolas Mabin is director of recruitment for Cap Gemini Ernst & Young, which provides implementation and outsourced services. For CGE&Y current hotspots are Siebel and Oracle, says Mabin, but more generally he definitely sees a career for people in ERP, either in terms of development and/or maintenance of systems. “The continuing success of companies like SAP and Siebel suggest there is more work to be done in ERP, so there is definitely somewhere to go from here but it involves learning new skills: the profile has changed in terms of exposure to extended ERP,” he says.
And it is the desire for extended applications that is helping to keep ERP alive and kicking, says Frontstep’s Kirk. “People realise that to implement web based applications you have to have ERP in the background to make sure you can deliver what you sell. You can’t move forward without it.”
Clients agree. Mark Barnett, supply chain director at The Consortium for Purchasing and Distribution, says: “ERP skills are still in demand.
You have to run the business with a reliable piece of software dealing with the basics. Unless processes are integrated effectively, there is no point in having the bells and whistles. I see a very big place for ERP solutions, from SAP down to Sage.”
E-PROCUREMENT DELIVERS FOR CPD
The Consortium for Purchasing and Distribution is an electronic data exchange supplying goods to schools, colleges, local authorities and private companies, in the UK and abroad. Its customers can access 30,000 different products, from stationery to food.
Its central financial and distribution operations run on System21 ERP software from Geac Enterprise Solutions. And over the last three years solutions from Geac’s commerce.connect series of applications have been introduced. These have extended the use of System21 to both suppliers and customers, improving performance in terms of placing orders on the web, customer self-service, on-line purchasing and supplier management. A more comprehensive “E Procurement 4 Free” service has been provided for larger customers.
“Some e-procurement systems are very expensive to install and integrate and still may not provide real-time data,” says Mark Barnett, supply chain director at The Consortium. “Because our approach is effectively an extension to our ERP system, this is not the case with EP4free.”
ONLINE RECRUITMENT SUITS SAFEWAY
Safeway, the UK’s fourth largest supermarket retailer, is to manage its whole recruitment process online, using the PeopleSoft 8 eRecruit package. Safeway has over 91,000 UK employees, and after research into how the HR function, managers and employees spent their time, and scrutiny of the recruitment process, it decided that a move to online processes would make it more efficient and effective.
Traditionally, each store has handled its own recruitment but, under the new system, all recruitment is to be handled electronically from a single centre in Warrington, to bring about standardisation and consistency and free up in-store HR staff for more strategic activities.
Open from 8am to 8pm, the centre has a freephone number to handle store and applicant enquiries. Applications and vacancies are handled by the web-based system. It is currently handling over 9,000 applications. PeopleSoft’s HRMS is live in 100 of Safeway’s 500 stores and other applications, such as employee self-service, are set to follow.
UTILISING ERP AT YORKSHIRE WATER
In 2000 Yorkshire Water decided to replace its disparate legacy systems with SAP R/3 ERP software. During the implementation, the team recognised that the core system was not exactly user-friendly for ad-hoc procurement users, and looked around for a suitable solution. According to Neil Wimbush, business change leader at Yorkshire Water, the release of SAP’s Business-to-Business Procurement offering at that time proved most opportune. As a result, four months before go-live, the component was added to the R/3 implementation process.
The project, supported by PricewaterhouseCoopers and SAP partner Logica Team 121, was completed on time and to budget.
Initially, Yorkshire Water used BBP to maintain the efficiency of its internal procurement processes via the company intranet. The next phase was to pilot an e-procurement solution via the Achilles Marketplace, an e-marketplace for the utility industry. The pilot proved there were business benefits to be gained and limited rollout of the Achilles solution began in September 2001.