Rising SAP work expands Oxygen

SAP Systems integrator and outsourcer Oxygen is to take advantage of healthy ERP and outsourcing markets to take on 40 more staff.

SAP Systems integrator and outsourcer Oxygen is to take advantage of healthy ERP and outsourcing markets to take on 40 more staff.

Oxygen chief executive Mike Smith says the company, which was spun off from Carter Holt Harvey’s in-house SAP team last year, will employ more people from within CHH, and hire additional sales and technical staff.

It is looking for account managers in Auckland and a Melbourne-based business development head for New Zealand and Australia.

“We want high-end people who can understand customer intimacy and how to build relationships,” Smith says.

Oxygen will take on 15 to 20 IT staff from different parts of the CHH business for its managed operations and professional services team and is also seeking a range of SAP-skilled people from developers in ABAP — SAP’s programming interface — to principal consultants.

In addition, Oxygen expects to bring another 40 across from CHH over time.

“We’re tidying up some transitions that should’ve occurred earlier,” he says. “And we’re beefing up business development. We’ve been an internally focused shop for so long and we’re now trying to win external business."

Oxygen has three main areas of business — SAP consulting, SAP business process outsourcing, and application and infrastructure support, development and hosting. Since it launched in June last year Oxygen has increased staff from 160 to 230 and has gained 21 customers outside Carter Holt Harvey including TVNZ and Whitcoulls in New Zealand and Ricegrowers and Sancella in Australia. The SAP team now numbers 70.

Another potential source of growth is to bring on staff from large organisations that Oxygen wins as customers. Smith says the company is working on two such bids, one in Australia and the other in New Zealand, both of which would involve transferring 100 IT staff.

The company appears to be pinning its growth hopes on the right markets. Analyst firm IDC says ERP is the largest IT solution in the local market, involving spending of about $370 million this year. Application outsourcing is also expected to be key, averaging market growth rates over 25% until 2005.

IT recruiter Peter Bankers, of recruitment firm De Winter, says ERP demand occurs in pockets attached to specific projects. There is some demand for Peoplesoft at the moment because of projects at Air NZ and NZ Post, which means consultancies are looking for staff, he says.

“Oxygen is a good example of this. Six months ago SAPers and ABAPers were in oversupply.”

Smith says there has been a lot of interest in the positions from people working for “tier-one” integrators. In the past Oxygen has recruited heavily from big name consultants and outsourcers such as IBM, Deloitte, Cap Gemini Ernst & Young and PwC.

It has also bought people from Carter Holt Harvey paper mills, distribution centres and warehouses to do SAP design, optimisation and implementation.

Smith says Oxygen, which has won 80% of the bids it has gone for, has revised its strategy in the last three months and will do so again in February.

“We are now having to ask the question, how many customers do we want? What breadth of services do we want to offer?”

He says the company doesn’t want to grow for growth’s sake or become a generalist.

“We want to retain a core strategic competence but also evolve as we see business changing.”

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