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ERP skills shortage pushes customers to SaaS
By    siliconindia news bureau
Tuesday,16 September 2008, 21:02 hrs
Bangalore: An acute skills shortage in enterprise software circles that is hitting SMBs especially is forcing clients to insist upon not only the merit of the software provided by a vendor but also the availability of resources to help implement such softwares, according to recent research from AMR Research analyst Dana Stiffler.


Though the big enterprise software vendors like SAP and Oracle are successfully promoting software products to manage business processes of small and medium sized businesses, the supply of skilled people to manage these products has not kept up with demand so far, reports Computerworld.

"SAP and Oracle application skills, in particular, are in huge demand, with service providers reporting their ERP practices continue to experience double-digit growth and strong pricing premiums relative to other IT skills," Stiffler writes in the recent report titled 'U.S. ERP Skills Gap Leaves Titans Vulnerable.' "They tell us the packaged applications business is limited only by their ability to find, train and place appropriate resources."

The net effect of the skills shortage is pushing existing and potential customers to consider alternative software delivery models, Stiffler contends.

"I think what it really means long term is that people are really crying out for a different delivery model for enterprise software and business functionality," she says. "And it is my belief that combinations of SaaS and business process outsourcing (BPO) will eventually begin to emerge and make that gap be slightly less noticeable."

AMR survey data as well as that of other high-tech market researchers illustrate just that. When CIOs were asked by AMR how they would like to ideally purchase software and have it delivered in the coming three to five years, "it is striking that many chose SaaS or BPO as the preferred way for them to be able to support these different business processes," Stiffler says. "It is not a majority, but it is edging toward half [of survey respondents]," adding that that is especially true for small and mid-market customers.

SAP and Oracle have made no secret of their desire to infiltrate the SMB market with a business-model-defying combination of on-premise and on-demand offerings. SAP's rollout problems with Business ByDesign, its on-demand ERP product, have been well documented in the report. Stiffler wonders if the ramp-up issues SAP has experienced might be due to internal SAP ideological discussions as much as technical snafus.

In addition, SAP's and Oracle's missteps and their ecosystems' inability to serve new customers opens the door for Microsoft's Dynamics ERP product set. "I think SAP and Oracle are really vulnerable in attacking the mid-market," Stiffler says, "and it makes Microsoft look much more attractive relative to Oracle and SAP, if there's this big skills gap."

     
   
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Reader's comments(11)
1: SaaS is the future of Software. Now SaaS is a great alternative to traditional or hosted ERP/CRM from Oracle, SAP, RAMCO, Microsoft etc. Customers regardless of their sizes can get up and running in few days and that also with subscription fee only. Now customers in India don't need to go outside India to contact the vendor and its support service or their partners (WARNING! It IS not the ERP vendor) in India (who blame the product when issues crop up or send many hidden bills to you). A2Z APPLICATIONS.COM is an answer to it. Now SaaS Platform is available to SMEs (even Micros) in India for any apps to be deployed in few days.

Drop a line at sales@a2zapplications.com if you are in need of a integrated business solution on SaaS model. If you want to partner with us, send your interest to partner@a2zapplications.com
Posted by: PR Executive - 06:25 AM Oct 22, ' 08
2: One of the key advantages of implementing a SaaS application is that it is easy. Unlike an ERP, which takes 6 to 12 months, a well structured SaaS should not take more than 4 to 6 days !

In addition, unlike ERP, SaaS costs only a fraction. With an ERP, the upfront investment can run into millions, whereas for SaaS it is only a fraction. Indeed, for an ERP, all the investment has to be made upfront, with the risk residing with the customer, i.e., things not working or taking forever to work, whereas in case of SaaS, the risk is with the supplier. In addition, SaaS is much more customer focussed, i.e., releases are free to the customer !

However, most importantly, for India, the customer does not have to have any infrastructure. No hardware, no software! Employees can use cyber cafes to access the service. In India, SaaS has a strong appeal for customers, because it gives them the same technology clout, as their larger competitors, but with minimal time and cost.

The market has moved significantly since 2005, however most people still confuse between SaaS, ASP and “Service Beaurax”.

Longer term, this article correctly predicts that SaaS will be a major force to contend with, and will deliver rapid and significant ROI to its users.
Posted by: Sunil NIGAM - 12:00 AM Sep 19, ' 08
3: I have very good experience in erp implimentation, If I get any opportunity I am ready to Join in ERP implimentation. My qualification is M.com and I have worked in accounts/mktg/Admin for around 25 years. Since beginning I am working on computer and I konw very well how to put the industrial requirment properly with the ERP system.
Posted by: Arun Kodkani - 12:00 AM Sep 19, ' 08
4: My two cents on this, moving to SaaS cannot be an alternative. SaaS is not a new out of box initiative.After being in Industry for so many years, I have seen the concept being coined with Different terms. Back in 2005, it was referred to as Service Beaurax, then, Application Service on Request and now SaaS.

The ROI, for any SaaS initiative may throw a promising picture, but realization of the benefits are something, which take atleast 7 years, also, business will have its share of dynamics with time, which cannot be accommodated using SaaS.
Posted by: Abhi - 12:00 AM Sep 17, ' 08
5: Being an ERP consultant (though on the core technical side) I think I deserve to comment on this :

Ususally the recruiting companies should understand the 3 different layers in the ERP consultants' group.

Functional : This is where the guys with the core domain expertise comes in. For eg. on the Financials side, Charted Accountants who're trained on Oracle Financials, will play this role. Because they know the functionalities of the business units and know how to to what the company wants. (I think, Mr.Yogesh, who posted a comment, fits into this role)

Technical/Techno-Functional : These're the developers who usually start as Oracle Developers and move on to Oracle Apps. Developers. These guys know how to customize and write extentions of the current implementation. Over the period of time, they acquire the domain expertise by working with various clients and grow as tech leads and PMs.

Oracle Apps DBA : These're the DBAs who administer the whole E-Business Suite. These guys need not know the functionalities and in-depth structure of the objects (such as tables, views etc.) like the developers do. As an apps. DBA myself, I faced a lot of recruiters who expect me to know the modules. Then I used to go on to explain them, that for an apps. DBA any module is one and the same and it doesn't matter if I manage Financials, Manufacturing or HR. Only then they would understand and even some will hesitate stating that, that's what the client needs.

And one more sad story :

I worked in Chennai for a consulting company back in '99. Their aim was to build a strong Oracle Apps. team with all the 3 sets of ppl. and take up projects from overseas and do apps. implementation. They roped in Oracle developer guys from their Mumbai office, hired Oracle India to train the team in Financials and Projects modules.

Wonderful plan that should've done a great job, but it was not implemented properly and they ended up selling those guys in the US market. But at the same time, Satyam did the same thing and now see where it's today.
Posted by: Muthu - 12:00 AM Sep 16, ' 08
6: It seems the selection criteria for selecting the skilled ERP peopel itself is wrong. Recruitment firms/HR people just look for the word SAP/Peoplesoft/Oracle Financilas and don't consider the people who has got very good In-house ERP development experience.
For exampl, I dp have the In-house ERP related experience from Manufacturing/Automobile and Enginerring but I never reecived a call in ERP area.
Posted by: Anil Deo - 12:00 AM Sep 16, ' 08
7: It is true that ERP talent is not acquired on correct criteria, many a times bright people are not being chosen on wrong criterias. I am being a very qualified , skilled and experienced person for Oracle ERP is not getting a good opputunity despite having very sound experience in domain. Strong domain people should also be given fair chance.
Posted by: Yogesh - 12:00 AM Sep 16, ' 08
8: As Mr Babu said, The recruiting companies have very vague stratagies of selecting candidates. Why others I myself am into ERP with strong domain & ERP skills. When i have sent my CV to one of the Gaints in IT thru 3 different ppl, for the same CV I got 3 different replies.
One said over qualified, second says U dont have matching skillset and on the other hand I was given an offer by the same company!! I feel the stratagy of selection is playing a very big role. Worthy candidates are being missed out by companies!!
Posted by: Prasanna - 12:00 AM Sep 16, ' 08
9: There are lot of domain, implementation and maintenance skills available in the market. It is only a question of the procedure of screening by the software firms to use these skills.

The software firms needs to have proper screening procedure instead of mass walk interview where in many skilled engineers are not getting selected as the people involved in screening are not competent and are merely HR guys who go only by the colourful wordings expressed in resume.
Posted by: Babu - 12:00 AM Sep 15, ' 08
10: Let me add one more thing. Recently I was talking with Pradeep Kar of Microland. He said India lacks companies with expertise in ERP segment. So Indian companies has a space there in ERP to take off and mint money if they give their heart and soul in this segment.
Posted by: Sovan - 12:00 AM Sep 15, ' 08
11: so its the time for the ERP to be strngthened
Posted by: trishna - 12:00 AM Sep 15, ' 08

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