05/21/2008

SAP AG (NYSE: SAP) today announced findings of a research effort conducted with the University of St. Gallen that show IT projects based on a service-oriented architecture (SOA) improve software reusability, reduce operations cost and offer substantial process efficiencies. Findings of the study will be presented to attendees at SAPPHIRE® 2008, SAP's international customer conference, being held in Berlin, Germany, May 19-21.

ebizQ received the following:

As SOA is currently undergoing mass adoption and establishing itself as a de facto technology standard for implementing software architectures for increased flexibility and simplified integration, organizations are looking for more economic justification for their initial SOA projects. The study focuses on the SOA business-value proof points that organizations are using to convey the benefits of an SOA strategy to decision makers.

To enable best-practices sharing, SAP cooperated with the University of St. Gallen, which specializes in business and information management research, to interact with SAP and non-SAP customers spanning industries such as financial services, telecommunications, media and the public sector in this research.

Key findings from the study show that customers view the business case for SOA in two different ways.

The first is an IT-centric approach in which the benefits of the SOA technical infrastructure and organization are the driving factors behind implementation. This approach values the IT savings that SOA can bring through its "reuse of services," or the efficiency gains experienced through reduced software-development time and cost.

"Our study shows that service orientation significantly improves the reusability of software functionality,” said Prof. Dr. Robert Winter, Institute of Information Management, University of St. Gallen. "In mature organizations, we found an average reuse rate of four, which leads to considerable IT consolidation and cost-saving potential. However, strict governance is absolutely vital."

Certain companies, especially those who are SAP customers, do not stop here. The second approach uses the IT-centric method as one component in a broader, more comprehensive foray into evaluating SOA. Burda Digital Systems, for example, approaches SOA from an enterprise standpoint, or as an open architecture for adaptive business solutions. This architecture elevates the design, composition and management of Web services to address business requirements.

"SOA is a powerful concept that allows us to increase our productivity dramatically,” said Gerhard Thomas, CEO, Burda Digital Systems. "We achieve 10 to 20 percent savings in operations cost and 20 to 30 percent shorter project durations across our IT landscape. Sometimes it's even more. However, the major benefit of SOA unfolds on the business-process side. We achieve increased process efficiency of between 10 to 30 percent, and also benefit from improved process quality due to consistent data and role-specific process design. This is only possible if you closely align your IT with the business and design services along process needs. SAP’s concept of built-in business semantics into enterprise services is exactly the way to guarantee this."

Public Sector Organizations Benefit From SOA

With a business process platform following SAP's business-driven SOA approach (enterprise SOA), the University of Hagen and the City of Hagen complied with new challenges faster and more effectively, while also responding to constituent demands at a quicker rate. The customers designed and built an online portal for citizen and constituent services, called "Rathaus 21" and equipped with more than 50 different predefined service offerings. The portal significantly improves constituent and cross-agencies processes. The blueprints of reusable process scenarios such as shopping carts and e-payment functions are now also offered to other cities and agencies, all to be implemented at higher speeds and efficiency rates when compared to traditional development approaches.

"Ensuring compliance with legal regulations, such as the new European Union service directive, is critical for public administration," said Prof. Dr. Gunter Schlageter, Institute for Cooperative Systems, University of Hagen. "At the same time, we also need to provide new or enhanced citizen and constituent services. Enterprise SOA allows us to drive flexibility and efficiency into our processes. We are now able to provide improved public services and achieve higher efficiency at the same time. The resident registration process is a very good example: we increased our internal-process efficiency by 16 percent, as citizens can now use a new self-service interface and benefit from a reduced process-execution time – from eight days to 60 seconds. For us, enterprise SOA is not only a technological concept - it has strategic relevance for our business."

"SAP embarked on this study with the University of St. Gallen to hear directly from customers how enterprise SOA is helping them swiftly adapt to rapidly changing market needs,” said Patrick Frerichs, consulting director for SAP. “We view this study as an installment in the qualitative research and feedback that SAP is constantly collecting from its customers. This study shows many SOA projects start without an explicit business case, but the need for proving value increases rapidly down the road of SOA adoption. This is incredibly useful for us, for we are able to take this feedback and work closely with current and prospective customers on how to maximize SOA."

This research comes on the heels of newly announced SAP business process management capabilities (see May 6, 2008 press release, titled "SAP Ushers In New Era for Business Process Management"), which will further increase the ability to deliver insight, flexibility and efficiency based on a comprehensive SOA, and delivered with the service-enabled business suite, SAP NetWeaver® technology platform and vibrant ecosystem of SAP services and partner-delivered applications.