The bus heading to REC Trichy is packed with alumni and ready to leave from the hotel portico. But before joining his batch-mates (1981-85) for a literal walk down the memory lane, S. Rangarajan, a Bangalore-based SAP consultant (http://bit.ly/F4TSRangarajan), shares with Business Line a few interesting insights from his consulting experience. We continue our conversation over the email…
Excerpts from the interview.
What aspects of SAP consulting have remained the same and what aspects have changed during the past 15 years since SAP became popular in India and abroad? If SAP consulting were to be considered a product instead of a service, its lifecycle has been that of a typical successful product – an introductory phase, followed by high growth and maturity.
The early nineties were the period of introduction, the mid and late nineties were the period of intense growth, and the last 10 years have seen a mature phase emerging. These periods have also been reflected in terms of availability of skills and the rates paid for consultants.
The nineties were characterised by severe shortage of SAP skills and sky-high rates even for inexperienced consultants. The current mature phase of SAP consulting has seen the commoditisation of this space, and only the most valuable and niche skills command rates that were commonly prevalent during the growth phase.
During the initial introductory and growth phases, the customer focus was to somehow complete the implementation of SAP. During the mature phase of the lifecycle, customers started finding ways and means to improve the utilisation and exploitation of SAP and allied software. The focus has therefore shifted to results-oriented implementation. SAP consultants have also had to change focus during this period and have had to provide value for money instead of simply showing up.
Also during this period, several buzzwords have been promoted by SAP. These include mySAP.com, APO, BW, Netweaver, BO, SEM, SRM etc. Not all these have raked in the moolah for SAP consultants. On the other hand, consulting in the core ERP (enterprise resource planning) product continues to be the bread and butter, more than 15 years after the introduction of the flagship R/3 product. The skilled consultant in the core ERP continues to be well respected by customers and peers alike.
Among the buzzwords and concepts promoted by SAP, Business Warehouse and Business Objects have been exceptions in terms of growth and demand among customers. Consultants who have been able to combine core ERP consulting skills with BW and BO skills have been the most successful in recent times.
In summary, what has remained the same is the focus on core ERP implementation. What has changed significantly is the focus towards results-oriented consulting that delivers value to the customer.
What are the required attributes to be a successful ERP consultant? ERP consulting represents a confluence of technical skills and business skills. Any consultant worth his/her salt brings a blend of deep business understanding and the ability to translate business understanding to ERP functionality. The “one size fits all” concept does not exist in ERP implementations – each industry has its unique business drivers to which ERP implementations need to be tailored in order to ensure that the potential of ERP implementations to transform businesses is exploited to the hilt. Additionally, the ERP implementations must be flexible enough to enable the customer to adapt to changing business needs.
A successful consultant is therefore acutely aware of the business drivers within an industry and is able to tailor the implementation to suit these requirements. For instance, the FMCG industry works on the stock and sell model and depends on efficient and responsive supply chains in order to be successful. In this distribution-driven business, manufacturing and purchasing have to be in sync with product distribution to ensure that the shelves are stocked with the right product in appropriate quantities.
On the other hand, a heavy equipment manufacturer, who operates on a make to order model, looks to efficient utilisation of assets such as plant and machinery, inventory, etc., in order to minimise total cost of operations, thereby maximising profitability. Consultants who are able to correlate business drivers with ERP functionality are generally extremely successful and sought after.
Additionally, an in-depth understanding across various business functions is regarded particularly highly by customers. This is especially true of the SAP consulting space where consultant skills are typically restricted to one or two modules. The consultant who is able to demonstrate breadth of understanding and expertise across multiple business functions and is able to design end-to-end solutions spanning multiple business functions is regarded very highly and is usually exceptionally successful.
Your views on the adoption of SAP in India, and how different it is from other comparable economies.
Somewhat similar to the lost decade+ of the late seventies and eighties in the context of IT (information technology) hardware and especially the mainframe, India skipped a generation of MRP and MRP-II packages and transitioned directly to the ERP-era during the nineties.
SAP was the harbinger of the ERP-era during the mid-nineties; and the next few years have seen an across the board acceptance and adoption of SAP and other ERP packages. SAP has been by far the leader in the country with a market share that has been upwards of 60 per cent ever since its introduction.
Customers who transitioned to SAP typically had a history of home-grown software being the legacy application that was replaced by SAP. For instance, companies within the TVS group persisted with home-grown solutions for a long time but transitioned to packaged ERP eventually.The situation in the developed economies was different and legacy applications such as MFG/Pro, MANMAN, JD Edwards, Peoplesoft, BaaN, etc. had already exposed customers to the benefits of integrated business software. Transitioning to ERP such as SAP was a logical next step for such customers.
The widespread use of SAP in India is another aspect that is different from what is generally seen in the US for instance. The SAP market share in the US is a little less than 30 per cent, as Oracle, JDE, etc. have also seen widespread use in the US. Consequently, SAP usage and implementation skills in India are some of the best, and Indian customers and users are generally the most demanding in terms of expectations from an SAP implementation.
How portable are SAP consulting skills to other competing ERP software projects?
I see the “modular” focus of SAP as a disadvantage when it comes to utilising acquired skills on other ERP software projects. While the depth of SAP within each module is a considerable plus and helps the development of consultants vertically, the casualty is the breadth of knowledge across business functions – the so-called “integration” skills.
Having worked initially in packages such as MANMAN and MFG/Pro, I was initially shocked and surprised to see the singular focus on module-oriented skill acquisition when I transitioned to SAP. Training classes were modular in structure; consultants were expected to know one or two modules at the most and nothing more pertaining to the breadth of SAP.
As a result, the proportion of consultants who can be considered experts in the integration between different modules is miniscule even today as compared with the total number of consultants who profess to have SAP expertise. For instance, in a make to order environment, the integration cycle encompasses sales, manufacturing to the order, procurement against the order, and associated accounting and costing. To implement the complete cycle for a customer takes a minimum of 3 to 4 consultants working together.
When it comes to utilising these compartmentalised skills in other ERP projects, consultants may end up with inadequacies as they may have to take responsibility for a wider part of the functionality than they have been accustomed to in the SAP world.
What according to you are the top 3-4 reasons for the failure of SAP projects?
1) Lack of top management commitment to the project.
2) Project being an IT-driven project instead of being business-driven.
3) Assignment of inappropriate/ inadequate business resources to the project, and business resources not being full-time on the project.
4) Poor quality of consulting resources on the project.
Are ERP software companies sensitive to the requirement of emerging economies such as India?
Although this was not the case initially, the size of the market, the opportunities offered by the market, and the availability of a large number of good quality developers to localise, have enabled ERP software companies to scale up their offerings to suit the needs of the Indian market.
A case in point is the development of India-specific extensions to ERP software packages so that local taxation, customs and import regulations, payroll etc. have become an integral part of the package instead of being an add-on. It took a while for these aspects to be incorporated into the ERP packages but once this was done, any changes to the taxation, customs, payroll, etc. are being quickly been incorporated into the packages.
In terms of functionality, however, ERP vendors have generally been successful in selling the concept of best worldwide business practices to Indian customers who have also eagerly lapped up such packaging of processes and implementations.
source: Thehindu.com
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