SAP commodity status

The day after I released my last post (SAP IT Governance – Achieve Business IT Engagement), techrepublic.com published a review of the future direction. While I do not agree with all of the Gartner conclusions they published, I certainly agree with the “new manifesto” (TechRepublic: Get drastic: 15 IT best practices to kill). Reading through the comments left on the TechRepublic post was enlightening. However, most of the comments focused on the details of one or two points of disagreement while missing the focus of the entire message.

Denial of the purpose of any IT initiative, especially business solutions, will only lead to significant levels of outsourcing. IT areas and functions that become more like commodities (or as one commentator calls these functions, taxes on the enterprise) are quick to be outsourced. While these taxes are necessary infrastructure components (such as e-mail, phone, wide area networks, and even PCs or laptops), other areas are starting to be seen as commodities subject to significant cuts.

Consultants Must Get Serious About Customer-Focused Value (or Find Another Career)

Unless more functional SAP application consultants get serious about understanding business and helping stop the fakes, enterprise applications will become a commodity as well. This isn't just idle speculation. Those of us who have been around SAP for twenty years or more remember the days when ABAP skills were sky high. Now, they are a commodity that companies frequently outsource. The same commodity status is true of SAP Basis: It is outsourced overseas or to hosting providers. Without real value, SAP may be soon to follow.

The Coming SAP Business Technology Revolution

The TechRepublic post hit on a key theme that is the focus of this site– helping business realize (and recognize) value from their SAP projects. Under the subtitle “New CIO manifesto” TechRepublic notes:

[I]nformation [may be] more important than information technology” and the majority of IT spend will be used to “measurably improve… financial conditions of an enterprise” by supporting “revenue generating rather than expense related business processes.”

This manifesto is more aligned to sales, marketing, and . These areas of the enterprise are in line with priorities (see e.g. What is the Proper Relationship for the CIO, CEO, and CFO?). The TechRepublic post then goes on to note that:

“IT has to stop thinking of itself as a business utility and start seeing itself as a business catalyst. In order to do that, it's going to have to think in business terms and economic impact for everything it does…”

What Can Skilled SAP Consultants Do to Prevent Becoming Commodities?

First, do what you can to educate clients around consultant screening (for details see Protecting Yourself from SAP Consulting Fraud). For example, if you find out a client is looking for consultants, ask them if they have received that candidate's references from their last three projects. Additionally, ask whether they directly asked for confirmation of experience from those references.

As clients continue to see marginal results from these frauds, they will consider you the same, and rate pressure will quickly move you to commodity status. Worse still, you may be on a project where you have to do so much clean up behind an incompetent consultant to get your own area working that you do not have the time to deliver on real value that will set you apart.

Second, focus your consulting efforts on delivering value to your clients. When I say value, I refer to and return on what you are being paid for. Don't just do some configuration because that is what you are being told, or because that is what is in scope. Do it in such a way that it helps the client long term.

For example, just because SAP supports a particular type of functionality does not mean the ongoing maintenance after go live is in the client's best interests. Carefully consider the short- and long-term effects on your customer of what you do. If you take this approach, you may lose out on a little extra billable time in the short term. However, you will stand out to them as someone who looks out for their interests. When it comes time to upgrade or add on additional functionality, a call from you could land you a direct client without the middle man staffing firm. You can avoid competing with so many of the frauds the staffing companies try to place, which may destroy a client project and damage the value you can add.

The choice is yours. You can be more client- and customer-focused and generate value, or you can watch the marketplace move you to commodity status. In the end, no matter how good you are, as the marketplace erodes, your value in it does as well. It's time to start acting like a consultant, a paid advisor to give your client the best possible direction you can. In doing so, you protect your own future as well. For more insight on delivering SAP enterprise value, focus on the components of or (see ERP vs. ERP II vs. ERP III Future Enterprise Applications).