Why do SAP Jobs pay much?Category: SAP Posted:Jun 06, 2017 By: Ashley Morrison
The most widely used ERP system in the world, hands down is SAP, leading to SAP professionals being paid well above other IT professionals. Organizations generally look for a software product that best meets their needs in terms of product price, the improvement in productivity it will offer and the efficiency that it will bolster. SAP products are designed to meet all these needs and more. This is the simple reason that enterprises are willing to shell out a lot more capital on SAP products and professionals trained in using them. With massive amounts of integration interwoven into its products, the enablement of implementation for the business future is made a possibility, spearheading convergence of transactional activities into one single application.
The fact that the SAP product is so detailed, versatile and turnkey, it brings up complexities which were previously unseen in other simpler product with lesser functionalities. This means that average IT professionals are not sufficient to meet the SAP needs of most companies, giving rise to the need for trained SAP professionals in the IT market.
The bottom line is enterprises pay higher salaries for SAP professionals as investments towards higher ROIs they would reap in the future in the form of organic cost cutting and highly enhanced performance.
Need of Qualified Talent for critical SAP Projects
While most enterprises are sparing with the salary constraints for their employees, and want to pay less, the risk of a failed implementation for an organization could prove more expensive than then set of hiked compensation packages they would offer for their employees. Since in traditional business ecosystem, the stakeholders and board of directors in a company will keep a close eye on project investment and related risks, and because the potential ROI is too critical in nature to ignore, companies start off with much higher pay packages for SAP professionals right from the start.
The enterprises hire the right kind of well-trained talent right from the get go, pay them considerably more to ensure project success is not hampered by untrained project professionals. Such is the ROI that it begins to show in the balance sheet in a matter of months than years!
The entire technology space across the globe is the playing field for SAP consultants and professionals with the work of such an individual being quite challenging and equally rewarding. SAP being at the heart of the enterprise as it always is, makes it challenging for the SAP empowered an individual to handle several project activities at the same time, most of which are mission critical. Working for the fundamental business requirements of the organization has its perks awareness of the enterprise at a holistic level, and knowing the inner workings of the enterprise as no one could. This will include every function of the business ranging from Sales and Distribution to marketing and customer interactions. Finance, inventory and a lot more are handled by the SAP professional in the current market. One has to remember that the monetary emoluments are not the only incentive for taking up SAP, but the enormous proportional career growth that comes with it is very appealing to all professionals from the IT and non-IT domain alike.
Demand vs. Supply
The all-pervasive dynamics of demand and supply dictate that if the supply is high then the demand is low (product or service) and vice versa. In this case, SAP professionals are always short in supply from the perspective of an enterprise. This, in turn, pushes up the demand or such trained SAP professionals throughout the market. Since is a highly advanced and complex product, not just any IT professional will do to make sure the SAP implementation goes on without a hitch and delivers expected results for the enterprise. It is the niche SAP project experience that gets SAP consultants their premium price (read as salary)
Full-scale implementation of SAP is more likely to occur in enterprises with high budgets as opposed to smaller organizations with smaller budgets who settle for partial implementations of SAP. Or the company will resort to more cost-effective alternatives such as Oracle eBusiness, JDE, and PeopleSoft. Fortune 1000 companies quite often stick to hiring from the SAP talent pool, putting their money where their mouth is. Hiring is also expected from markets such as the Big 5 and even the SAP Implementation Partner market.
Progressive research by leading technological research firms has shown that:
- Salary trends for SAP individuals is a lot higher for high revenue enterprises, their partners and integrators than the organizations utilizing SAP or SAP clients.
- Research has also indicated that the educational profile of a candidate plays a major role in obtaining SAP jobs or hikes post acquisition of the SAP job.
The average pay for SAP consultant is really high compared to the run of the mill IT professional. There is an acute shortage of skills in the SAP domain globally which has a domino effect of first affecting SAP customers, partners and ultimately SAP AG itself.
For professionals looking to up the salary quotient further using SAP can take up contracting which increase salaries up to almost thrice as much would be offered to regular SAP professionals on permanent rolls of the company. This is possible if the candidate is able to land the right project for the contracting job.
Whether it is a full-time or a contractual position in the SAP domain, one can benefit greatly from the comparatively high salaries that are offered to SAP professionals. Such a salary even trumps the salary offered to an IT specialist.
Being a market leader in the current market scenario, SAP rules the roost when it comes to enterprise application software. This is the main reason why SAP is the most popular and sought after job choice amongst students and professionals alike.
There are various kinds of SAP consultants which are as follows:
- Sales/Business Consultants: This job role involves procurement of projects from customers and such professionals usually won’t have much knowledge of SAP.
- Functional Consultants in SAP: This job role involves making changes in this software as per the client needs. They help in designing new ABAP programs.
- SAP Basis Consultants: They are involved in the installation, performance tuning and maintenance of SAP databases and servers.
Any lack of performance by a SAP professional can directly impact the enterprise by influencing its critical functions such as inventory, sales and distribution and finance. If a business is unable to have the right inventory planning due to a faulty implementation of this software, it can’t meet the consumer’s demands on time and lose business.
SAP Market and Salary
SAP has minimized Greenfield implementation activity (this is the implementation which is done irrespective of prior history) in the past year. It has also moved the SAP skills demand to transformation activities in order to remediate and enhance pre-existing SAP landscapes which may be out-dated. Agile solution delivery, EP upgrades and discrete cloud solutions have also been seen dominating the market.
Several SAP initiatives have still remained in the delivery phase meaning that there is a good deal of competition amongst such projects for experienced SAP resources, which in turn are keeping up the contract rates.
SAP has seen the most demand in the sectors such as utilities, manufacturing, FMCG and government sectors. The only industry immune to such increased demand is the mining sector which has shown subdued demand because commodity prices have stayed soft with most projects in this sector has reached the maturation stage.
The SAP roles presently most in demand include:
- Senior Functional Consultants and Solution Architects (enterprise and modular)
- Business Analysts
- Data Analytics Consultants
- Integration/PI Consultants
- Data Migration
The most valued skill areas for SAP professionals include:
SAP Consultants who are in demand are expected to have excellent communication skills which can be applied in customer engagement. Such consultants will be expected to comprehend, articulate and construct enterprise focused solutions and market the advantages of the mentioned solutions. Such involvement in the enterprise will go above and beyond the simple execution of the technology solution at hand.
From a technical standpoint, SAP professionals will need to adapt their skills to cloud, integration, digital and mobile world.
The demand for what can be described as commodity based learning can be easily offshored and outsourced. Examples for this are Basis and ABAP.
The emerging skill areas for SAP professionals in which market experts anticipate sustainable future demand are:
- Ariba, SuccessFactors, Hybris
- Integration (cloud to cloud, cloud to on-premise of both SAP and competitor products)
- Simple Finance and Logistics cloud solutions
It is also worth noting that permanent vacancies result mostly from attrition in the SAP domain, with most enterprises looking towards to permanent hire with a fixed end-date (in place of actual permanent engagement). Organizations are seen implementing increasingly flexible workforce solutions with a mix of offshore and onshore delivery which in turn can be sourced from partner, internal, direct and agency resource pools. This allows companies to readily scale up or down resources as enterprise needs would require.
Permanent salaries which are listed are annual base salaries alone, without the inclusion of superannuation, bonuses, or commissions and other benefits.
For such compensation, the company will list rates as “Rate to the Contractor” which includes superannuation but leaves out recruitment and statutory on-costs.
All rates listed are the daily ‘Rate to the Contractor’ only (this includes superannuation, but excludes recruitment and statutory on-costs)
Contract rates are decided through the skills and experience of the individual contractor, coupled with the market demand for those particular skills at the time the contractor was engaged. Rates are indicative of the end-user market and a premium may be added for consulting salaries.
Salary and daily rate variations can occur due to:
- Nature of each project (such as implementation vs support)
- Geographic location
- Contract duration (such as generally higher rates for shorter term contracts)
- Industry and Client (such as mining vs retail and consultancy vs end-user)
SAP has overtaken the banking sector by a mile to become the highest paying company in the UK giving out an average salary of £90,000. SAP has its UK headquarters based out of Feltham, which is a town based two miles out of Heathrow. The compensation package, which is more than three times the UK average, includes an average basic salary of £75,000.
Hot spots in the SAP market
Senior functional consultants and solution architects have seen high demand in the IT market according to the Managing Director of SAP worldwide. Also in demand are data migration experts, integration/PI developers, CRM specialists and business analysts.
Recruiters across the globe have reported high demand for module-focused skills around SAP HANA, SAP Business Planning and Consolidation (BPC), SAP BI and Business Objects, SAP Business Rule Framework Plus, SAP CRM and Fiori, SAP Process Orchestration and SAP IS-U and more.
Strong demand for manufacturing-related skills in SAP WM, MM, APO and even QMPP is seen in the current market.
SAP has permeated every strata of the enterprise, enhancing conventional business processes by streamlining process flows. Considering the constant evolution of SAP products, their compatibility with existing enterprise infrastructure, it has become an absolute necessity for growing businesses to adopt SAP to stay competitive in a dynamic IT market. This, in turn, means SAP professionals will see exponential rises in their compensation packages which are progressive and sustainable.