SaaS - Software Model of the Future

Würzburg, January 28, 2009: The future is all about providing state-of-the-art, flexible and more affordable software -- requirements already met by Software as a Service (SaaS), enabling companies to tap into new business capabilities. This is our assessment of the 12th SAP-IBIS Conference, hosted by IBIS, and held in Würzburg on January 26 and 27, 2009.

Other key topics included application and business process management in the SAP space. Prof. Rainer Thome, Chair of the Faculty for Business Administration and Information Technology at the University of Würzburg, gave a presentation on the importance of continuously adapting business processes.

He pointed out that constantly changing market demands made it more important than ever to monitor and adapt processes on a regular basis. He mentioned that some companies viewed the implementation of the new ERP software as an occasion to review their business processes for the first time.

The cofounder and chairman of the IBIS Prof. Thome supervisory board also argued in favor of using standard software as these solutions now support today's business processes. He concluded, "Business-IT alignment will gain in importance in future. From here on out, business administration theory will be shaped by how processes are modeled in software."

He insisted that companies therefore need not only align their software with their processes, but gear their processes to the software. Prof. Thome highlighted the importance of the Internet, which has already significantly changed purchasing behavior, and that still has huge potential. SaaS solutions, he said were an appealing alternative, as they would enable quick software updates, and a high degree of scalability, and leave companies free to concentrate on their core competencies, since risk would be shifted to the provider.

In his keynote address, "Advanced, benefit-driven enterprise software, illustrated by SAP Business ByDesign," Peter Lorenz, Head of SME Solutions at SAP, elaborated on his experience with the SaaS solution for midsize businesses - who have relatively simple but effective processes. In addition, roles and responsibilities are shared among a small number of employees. Midsize businesses therefore require a Business Suite solution that is powerful yet cost-effective and easy to implement. Furthermore, the system needs to be a hundred percent dependable because, as he pointed out, midsize companies do not have a backup system, and failures can be extremely damaging. An on-demand solution, hosted and monitored by the provider, offers reliability, he argued.

Lorenz went on to detail SAP Business ByDesign's current development status. Enhancements had been made, he said, in usability, performance and functionality; Topics on this year's agenda included TCO, flexibility and extensibility. And he announced that Feature Pack 2.0 would be rolled out this year.

The keynote address by Dr. Peter Zencke considered the evolution of business solutions. The former SAP executive board member identified three phases: In the first phase, ERP solutions integrated internal operations, helping to optimize resources, costs and processes. In the second phase, business solutions supported inter-enterprise integration, enabling new forms of collaboration. And today we are experiencing the third phase: the seamlessly integrated extended enterprise is now reality. According to Dr. Peter Zencke, integration is now in all dimensions – in development, supply chain and distribution.

Without IT, Dr. Zencke asserted, global collaboration would not be possible. This enables innovation based on new business models within networks. But this places greater demands on the underlying business process platform. For example, new business models require ongoing iteration between strategies and execution; but by the same token, companies need flexibility to be creative and to achieve competitive differentiation; and they need to have control over their processes. He maintained that business process platforms must meet these requirements.

The lesson to be learned is as follows: Each new phase broadens the scope for innovation, integration and flexibility, but each phase is dependent on the previous one. They come in waves, and are evolutionary in nature.

Hardware and software are changing more and more rapidly. Dr. Zencke pointed out that costs for computing and storage were decreasing, and broadband access increasing. SOA, Web 2.0 and SaaS also offer new opportunities. He concluded that the future belongs to "timeless software", i.e. software that is characterized by dynamic ongoing innovation; this calls for systematic transformation made possible by platforms that can adapt continuously.

The event drew more than 100 visitors. In addition to the three keynote presentations, there were three exhibits, devoted to application management, business processes and innovations.

"Our conference at the beginning of each year is designed to provide SAP customers with a platform for discussion. It looks like we managed it again this year," concluded Dr. Andreas Hufgard, director of IBIS Prof. Thome AG. "We offered ideas on how users can examine their SAP solutions for unexploited potential and how they can make lasting improvements. Now it's up to SAP users to put these insights to work in their businesses."