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SAP in the 1990s led the pack in ERP (enterprise resource planning) sales, growing to become the world’s largest business applications provider. But now with the -90s far behind it and a tapped enterprise market the company is looking for novel ways to grow its market share. While it has taken on new areas of business-on-demand ERP and business user applications among them-SAP, like its competitors, faces internal challenges to its very external growth plans.
“If you want to grow, you have to win the war of talent,” said Claus Heinrich, a member of SAP’s Executive Board who heads the company’s global human resources efforts.
Heinrich is at the forefront of building SAP’s employee base to meet the aggressive growth goals the company has set for itself. In 2005, SAP’s Executive Board devised a plan to double the company’s customer base by 2010. To get there SAP has taken a three-pronged approach that includes the recent acquisition of Business Objects (which added about 6,000 employees to SAP’s roster) and fits into the company’s business user segment, the build out a new mid-market on demand suite, Business ByDesign, and a renewed focus on obtaining more small and midsized enterprise customers.
This year alone SAP plans to add about 4,000 employees to its current roster of 50,000 global workers; it has not yet defined its hiring goals through 2010. But the company’s hiring goals do not come without challenges, according to Heinrich.
The first thing SAP needs to do, according to Heinrich, is get new people involved in the company, on a global scale. The next initiative is to develop new skills within the company’s existing employee base to include new technology skills-on-demand computing and native social networking are top of mind-and mid-market expertise. Following that, SAP has to nurture its global competition around the world, winning talent in every corner of the globe. Finally, the company has to focus on profitability and performance.
“This is a combined approach,” said Heinrich, who has taken steps toward each area of focus. “We have globalized our HR organization. That was the first thing. Everybody who delivers value in the future is in one organization, our global HR. Then we have large projects in IT systems and we made a large investment in an IT system and reward projects, to have a [SAP] talent management system in place. Then we’ve done some more process oriented things. We want to become better in recruitment and hire new graduates.”
An inside-out approach to recruiting
To get better at recruiting SAP is taking an inside-out approach, looking to its internal employee base to recommend talent that could be brought into the company. At the same time Heinrich is utilizing different sources to suss out talent, from external recruiters to the Internet. He’s also looking at tapping more up-and-coming talent by recruiting more in academia where SAP’s founders have strong roots. “We are looking at software engineers and all kinds of quantitative scientists,” said Heinrich.
There is an equal emphasis on engineering and sales, according to Heinrich. And SAP is not alone in its land grab for talent.
“All new things which we are encouraging have bottlenecks,” said Heinrich. “We see this all the time. We are happy that we have our global network and that we are really present in all areas across the globe. So if there is a bottleneck in Silicon Valley,” SAP can look to other parts of the world for talent.
Despite a faltering U.S. economy Heinrich is seeing hiring bottlenecks in Silicon Valley. The reason, he said, is that as the economy slows companies are once again looking to squeeze efficiency gains out of IT.
“Silicon Valley is again heating up compared to two years ago,” said Heinrich. “The IT industry is coming back. What I hear from my colleagues is that the requirements [for IT skills] are becoming larger, salaries are increasing, competition amongst the companies is increasing.”
Competition for IT talent in Silicon Valley is picking up-but not IT in general, he said. “There are not such strategies in other industries,” he said. “My reason behind this is that in such an uncertain environment, companies tend to look for efficiency gains and invest in IT systems to improve efficiencies. I saw a similar situation in the early 1990s in America, where companies invested very massively in IT re-engineering.”