I recently returned from the SAP Sapphire conference, and one of the most compelling themes to emerge from it is a potential expertise capacity challenge around how, now that S/4HANA Cloud has been FedRAMP® authorized, public sector agencies will staff their SAP technology modernization initiatives. Based in part on RFPs currently circulating and/or coming to conclusion, the thinking is that the demand curve in this vertical will begin to pick up in Q4 of this year and accelerate into 2024 and beyond. Since the public sector operates so differently from commercial enterprises, particularly around regulations and compliance, funding cycles, and reporting, they not only need resources with hands-on expertise in S/4HANA, but also experience in that type of ecosystem.
It’s an extremely narrow and highly covetable set of resources. The challenge for Baer and for the systems integrators (SIs) we often partner with, is not only to identify expertise to support these initiatives, but to also meet the capacity need with high-caliber talent that will ensure the agencies maximize their investment and achieve their desired outcomes. It’s also important that we identify expertise quickly and with precision—by minimizing the number of interview cycles, agencies can get started sooner, a solid cultural fit ensures commitment and continuity, and experience results in better outcomes. It’s a big ask but working in partnership with the SIs and the agencies we are collectively supporting, there are some approaches we can take.
First and foremost, Baer has always taken a proactive approach to identifying resources—we look down the innovation curve, anticipate what’s coming, and start identifying, qualifying, and cultivating expertise in advance. We can look for expertise among people who have left the public sector for private enterprise who retain the appropriate institutional knowledge and more recent practical experience with S/4HANA. Another approach is to build blended teams that partner people with knowledge of the public sector and SAP ECC with people with hands-on experience in S/4HANA and who understand the new operating models and architectures for future state implementations. The heavy lifting would then be on the SI to integrate the teams in a way that enables them to take advantage of each person’s knowledge and expertise to drive the best outcome for the initiative.
The need for security clearance presents another challenge, and to resolve this, at least in the short term, I expect we will see some agencies taking a low-to-high-side development approach. This entails people with practical experience with the software standing up basic systems without agency/customer data, then handing them off to people with the right clearance to refine and populate with live data. It is not lost on me that security clearances take time and are often tied to a specific initiative, but I’d say the wisest move is to get started now, if possible.
Parallel Investments Will Increase Competition for Expertise in the Commercial Market
Adding to the complexity is that, in a somewhat unprecedented situation, the commercial markets will likely be investing in parallel. Typically, commercial enterprises are earlier to adopt any new technology solution, with the public sector adopting later due in part to the time needed to get FedRAMP® authorization. This was certainly the case initially with S/4HANA. However, as I have previously written, after a pandemic-fueled period of hyper-acceleration in adoption, economic uncertainty has resulted in a bit of a cooling off, with boards reining in budgets and CIOs completing milestones, then postponing full rollout. It’s only a matter of time before the pace of investment picks up again, and likely as not, it will happen as the public sector wave crests. This sets up a situation where enterprises and public sector agencies will be competing for talent in a tight labor market.
I think any organization in this position would be well served by making themselves as attractive as possible to potential candidates. It’s not just about salaries, although that does play a role. The best and the brightest talent are seeking the most engaging projects, and they will likely be looking for the flexibility to work remotely where possible.
A Complex Challenge Requires Creative Solutions
It’s a complex problem, and although I am looking at it through the lens of S/4HANA here, it isn’t exclusive to that technology. I anticipate similar challenges may emerge around Oracle Cloud, ServiceNow, and other critical technology infrastructure. Given that a commercial transformation initiative can take two to three years, while a public sector transformation can take two or three times that, it’s also not likely to resolve itself any time soon. There is no one answer, and likely it will take stakeholders ranging from the solution providers themselves, systems integrators, and customers, as well as Baer, all bringing something to the table to collectively move the needle in an appreciable way.
Staffing tomorrow’s technology initiative with today’s talent and skills is no mean feat. In the long run, any public sector agency, enterprise, or SI leading an SAP S/4HANA transformation initiative on their behalf would be well served by partnering with a true enterprise capacity partner vs. a traditional technology staffing company. There is much to be gained by building a long-term relationship with a partner who understands the overarching directive of your initiative, the relevant expertise needed throughout the lifecycle of the project and that people are key to driving the best performance from your enterprise technologies.
Unlike typical technology staffing companies, Baer is a true enterprise performance partner. We have a deep understanding of the scope of enterprise technology transformation initiatives and the highly specialized skillsets you will need at different stages of the process.
To learn more about how Baer can make a positive impact on your enterprise transformation, please reach out to Brian Trout, email@example.com, Executive Vice President, Sales, or John Wilson, Vice President of Strategic Accounts, at firstname.lastname@example.org.
We look forward to speaking with you and learning about your specific challenges.