UK SAP Consulting Services Market Fights Against Tightening IT budgets

Despite the worsening conditions of the UK economy, the SAP Consulting Services (CS) market will continue to see a reasonable growth in the next couple of years. PAC expects a growth rate of 5.4% in 2008, which although is a significant decline from 2007 (7.1%) is performing above the market average for the overall UK consulting services business of 4.8%. The SAP CS is expected to remain stable as we progress into 2009 and will see recovery there after.

A number of organisations have been in the cycle of investing in SAP and the related consulting services, in terms of ERP upgrades and business transformation. This has helped maintain a good stream of revenues throughout 2007 and the first half of 2008. For instance, UK public sector has been showing an increasing interest in SAP enterprise application software and services as local government organisations are forced to enhance services they deliver to citizens as part of the Transformational Government Agenda. A number of SAP Services providers have revealed that they have a strong pipeline in this sector.

However Q2 2008 is currently proving to be more challenging as vendors begin to feel the pinch of tightened IT budgets as inflation and the cost of borrowing increases. The retail sector for example has been suffering greatly in 2008 as consumer spending has significantly declined, and is inevitably having a knock-on effect on IT spend. Such scenarios will contribute to the decline in growth rate for SAP CS in the short-term.

On the whole, demand for SAP CS continues to be strong taking into account the performance of the overall IT consulting services market. SAP's growing ecosystem of both local and global players has played a crucial role in helping to push sales and meet the growing demand.

For access to our new SAP Services UK reports, go to: www.pac-online.com/sap