As businesses increasingly depend on sophisticated software platforms, there is a heightened demand for technically adept professionals with experience in implementing, integrating, and managing these systems.
This rising demand fundamentally reshapes the job market. The concept of ‘entry-level’ positions is evolving, often necessitating a level of experience previously expected from more advanced roles. This change disadvantages new entrants who compete in a job market that highly values practical experience.
The disparity between the skills taught in educational settings and the real-world requirements of tech roles widens, affecting fresh graduates and professionals transitioning into tech from other fields. Despite the high demand for tech talent, many potential candidates find it challenging to secure suitable entry points into the industry.
Key Ares of Skill Shortages
In the UK’s tech sector, the skills and talent gap affects critical areas like cybersecurity and data science, as well as the adoption of new software platforms. This gap reflects a disconnect between the available workforce’s skills and the industry’s specific needs.
Cybersecurity
The increasing frequency and sophistication of cyber threats create a demand for skilled professionals who can defend against them. Both the UK and US face a shortage of experts who understand the complex legal and ethical landscape of cybersecurity.
Data Science
The scenario is similar in data science. The surge in big data drives demand for professionals who can interpret and leverage this data for strategic decision-making. However, there’s an insufficient supply of data scientists and analysts capable of handling large datasets, possessing statistical expertise, and translating data insights into actionable business strategies.
SaaS
The rise of new software platforms, especially in Software-as-a-Service (SaaS), further complicates things. SaaS companies have revolutionised business operations, offering scalable and cost-effective solutions in sectors like finance, healthcare, and education. These platforms require a workforce that is technically skilled and adaptable to rapidly evolving technologies. SaaS companies in the UK have become integral to operational efficiency, necessitating specific skill sets that combine technical knowledge with sector-specific understanding.
The broader context of this skills and talent gap in the UK underscores the need for a workforce that is not only technically skilled but also versatile and industry-aware. Efforts in education, professional training, and industry-academia partnerships are essential to develop a talent pool that can meet the demands of an increasingly digital and interconnected world. Addressing this gap is crucial for the growth of the tech sector and the overall economic and social well-being of the UK.
SAP’s Impact on Global Business Operations
SAP has become a foundational element in the business operations of organisations globally. Its extensive use and the resultant talent gap form a significant part of the challenges in the tech industry.
SAP’s early market adoption, dating back to the 1970s, allowed it to set ERP standards and become deeply entrenched in the business processes of early adopters. This legacy persists, with SAP’s systems used across various industries worldwide. The global impact of SAP is considerable, extending beyond the corporate world to public sector organisations and influencing industry standards and practices. The reliance on SAP across different sectors highlights its importance and underscores the critical nature of the talent gap. As organisations increasingly depend on SAP, the demand for skilled professionals capable of managing, maintaining, and innovating these platforms grows.
The business software consumption landscape has been undergoing a significant transformation, with a shift towards cloud-based solutions. This change is altering how businesses approach their software needs, including their reliance on ERP systems like SAP.
By 2030 there will be a global human talent shortage of more than 85 million people, or roughly equivalent to the population of Germany. Left unchecked, in 2030 that talent shortage could result in about $8.5 trillion in unrealised annual revenues.
Korn Ferry Study
Challenges of S/4HANA Migration
SAP has evolved its offerings with the introduction of S/4HANA. The transition to S/4HANA is not just about accessing new features; it’s becoming a necessity. SAP has set a 2027 deadline for its clients to migrate to S/4HANA, after which traditional SAP ERP systems will no longer be supported. This deadline creates urgency for businesses to undertake the migration process. The migration to S/4HANA is a complex and significant undertaking, requiring careful planning and execution. Businesses must assess their current systems, plan their migration strategy, and ensure that their teams are adequately trained to handle the new platform. This process often involves rethinking and re-engineering business processes to fully leverage S/4HANA’s capabilities.
As a result, there is a growing need for SAP talent – professionals versed in traditional SAP systems and skilled in S/4HANA. The demand is for individuals who can guide and implement the migration process, manage the new system, and leverage its capabilities to drive business value. This need highlights the importance of training and developing a workforce capable of supporting this critical transition, a challenge that becomes increasingly pressing as the 2027 deadline approaches.
Addressing the Talent Shortage
The talent gap in the SAP ecosystem, particularly regarding the preparedness of SAP consultants, is a significant concern, as highlighted by a survey from the Americas SAP User Group. This survey revealed that a substantial number of SAP consultants are not adequately prepared for the S/4HANA migration. The lack of preparedness extends beyond technical skills to include an understanding of new functionalities, integration capabilities, and the complexities involved in migrating existing systems to S/4HANA. The survey indicated that only a fraction of the existing SAP consultants were trained and ready for the S/4HANA migration, raising serious concerns about businesses’ ability to meet the 2027 deadline.
In response, SAP launched the Partner Talent Initiative to upskill and prepare consultants for the S/4HANA landscape. This initiative includes measures designed to enhance SAP professionals’ skills and knowledge base, such as free online boot camps offering intensive S/4HANA training. These boot camps aim to equip consultants with the expertise to handle the new platform’s complexities, focusing on cloud migration, real-time data processing, and integrating advanced technologies like AI and IoT.
Despite SAP’s efforts, the talent gap remains a significant hurdle. The transition to S/4HANA is not just a technical upgrade but a strategic shift for many organisations, requiring a deep understanding of business processes, data analytics, and change management, in addition to technical knowledge. This multifaceted requirement amplifies the challenge of finding professionals with the right blend of skills. Furthermore, the rapid pace of technological advancements in the SAP ecosystem means continuous learning and skill development are essential for professionals to remain relevant and effective. This ongoing requirement for skill development adds another layer of complexity to addressing the talent gap.
Educational Response to Industry Demands
Conventional college education clearly falls short of addressing the shortage of skilled professionals in the tech industry, especially those skills in SAP. This issue isn’t just about teaching technical skills but also involves providing a mix of practical experience and familiarity with fast-changing technologies.
Colleges and universities, for all their merits, often struggle to keep pace with the fast-changing landscape of technology. The curriculum in many higher education institutions may not align closely with the current demands of the tech industry. This disconnect arises from several factors:
- Curricular Inertia: Higher education curricula often take time to develop and approve, leading to a lag in incorporating the latest technological advancements and industry practices.
- Theory vs. Practical Application: While colleges provide a strong theoretical foundation, they may not always offer the practical, hands-on experience that is crucial in the tech sector.
- Specificity of Skills: The tech industry, particularly specialised areas like SAP, requires a very specific set of skills and knowledge that general tech education courses may not cover in depth.
- Industry Dynamics: The tech industry is characterised by its rapid evolution, where new technologies can quickly render previous ones obsolete. This dynamic nature poses a challenge for traditional educational institutions to provide up-to-date training.
Given these challenges, apprenticeships emerge as a promising solution to the talent gap in the tech industry. Apprenticeships offer a blend of training and real-world experience, which is particularly beneficial in fields like SAP consulting and management.
- Hands-On Experience: Apprenticeships provide on-the-job training, allowing individuals to gain practical experience while learning. This approach is highly effective in tech roles, where hands-on application is as important as theoretical knowledge.
- Alignment with Industry Needs: Since apprenticeships are often developed in partnership with tech companies or industry professionals, the training is more closely aligned with current industry requirements.
- Bridging the Skills Gap: Apprentices can learn specific skills and technologies that are in high demand but undersupplied, directly addressing the skills gap in areas like cybersecurity, data science, and ERP systems.
- Creating a Pipeline of Talent: Apprenticeships help in creating a steady pipeline of skilled professionals who are trained and ready to tackle the challenges of modern tech environments.
- Flexibility and Adaptability: Apprenticeship programs can be more flexible and adaptable to changes in technology and industry practices, ensuring that the training remains relevant and up-to-date.
SAP’s Partner Initiative
As we look towards the future in addressing the talent gap within the SAP ecosystem, particularly for S/4HANA professionals, the role of SAP partners is poised to become increasingly significant. These partners, which include a wide range of consultancies, tech firms, and service providers, are likely to play a big role in shaping the workforce equipped to handle the complexities of SAP’s advanced systems.
SAP partners are expected to ramp up their training and certification programs, focusing on S/4HANA and its associated technologies. These programs will likely be designed to be more comprehensive, incorporating not just the technical aspects of the platform but also focusing on the practical application in various business scenarios. Given the depth and breadth of S/4HANA, training programs will need to be extensive, covering areas like cloud integration, data analytics, and the application of AI within the SAP framework.
There is likely to be an increase in collaborations between SAP partners and educational institutions. Such partnerships could result in specialised courses or modules that are directly aligned with industry needs. By integrating real-world SAP applications into the academic curriculum, students can gain valuable hands-on experience, making them job-ready upon graduation.
Recognising the value of practical experience, SAP partners may expand apprenticeship and internship programs. These programs would offer an invaluable bridge between academic learning and real-world application, providing new entrants with the much-needed industry experience. Apprenticeships and internships under the guidance of experienced professionals could become a standard pathway into SAP-related careers.
Given the rapid pace of technological evolution in the SAP ecosystem, continuous professional development will be crucial. SAP partners are likely to invest in ongoing training and development programs for their workforce to keep pace with new developments and updates in S/4HANA. This commitment to lifelong learning will not only help in addressing the immediate talent gap but also ensure a sustainable pipeline of skilled professionals in the long term.
Finally, SAP partners are expected to place a greater emphasis on specialised talent recruitment, focusing on niche areas within the S/4HANA platform. This approach will likely include targeted recruitment drives, collaborations with specialised training providers, and the use of advanced talent acquisition strategies to identify and attract the right talent.