SAP Spearheads “Public ROI” Initiative to Define Value of IT for Public Sector Organizations

New Project Underway to Help Governments Measure Comprehensive Economic, Social and Political Value of IT Investments

BOSTON, Mass. - May 18, 2005 - SAP AG (NYSE: SAP) today announced a new global initiative to address the challenge of calculating the return on investment (ROI) of information technology deployments in the public sector. Moving beyond traditional criteria that focus solely on financial returns, SAP is working with global customers and recognized experts from government agencies, public policy think tanks and renowned academic institutions to develop a highly sought after “Public ROI” methodology for defining, measuring and communicating not only the economic, but the social and political returns of government and public services programs. The announcement was made at SAPPHIRE® ’05, SAP’s international customer conference being held in Boston, Massachusetts, May 17 – 19.

Spearheaded by SAP’s Global Public Services organization, the initiative brings together SAP customers, public sector experts and advisors from distinguished organizations around the world, including Harvard University’s John F. Kennedy School of Government, the Center for Technology in Government (CTG) at the University of New York at Albany (State University of New York), the graduate school for public administration (EGAP) at Mexico’s Tecnológico de Monterrey and the Ecole Polytechnique Federale de Lausanne in Switzerland. Slated to kick off in June 2005, the Public ROI initiative will include workshops and customer and industry expert interviews geared to identify the key needs, challenges, research areas and approaches for developing a universally accepted method for public sector ROI analysis.

“Historically, public sector organizations have measured their performance across quantifiable, financially based outcomes, such as reduced transaction costs or cost avoidance,” said Jerry Mechling, director, e-Government Executive Education (3E) project, Harvard University’s John F. Kennedy School of Government. “Yet, financial ROI is only one dimension of a government’s effectiveness, especially when considering the social and political value of public programs—which can be as simple as the convenience of time saved from standing in line only to fill out a form, or as significant as reducing public assistance dependency and providing adequate child welfare services.”

According to a recent Economist study, nearly 70 percent of public sector executives worldwide aim to measure social returns on IT initiatives and make these transparent to citizens and stakeholders in the next five years. The Public ROI initiative will seek to assess how information technology impacts the social and political landscape of government programs. Practical implementations of the methodology being developed and specific outcomes from these Public ROI case studies and activities will be included in a white paper developed in conjunction with CTG and SAP’s Business Consulting Group. SAP customers in the public sector, such as Germany’s State of Hesse, are embracing the initiative.

“The topic of Public ROI is timely, compelling and highly relevant to State of Hesse as we strive to show our constituents the value of the services they receive from our organization,” said Harald Lemke, secretary of state, State of Hesse. “Since public administration has to achieve hard and soft objectives, public investments can’t be measured by hard financial objectives only. The Public ROI initiative is very helpful for recent political discussions about the real value of strategic IT systems for our community and our economy as well.”

As the world’s leading provider of business software solutions to both the private and public sectors, SAP’s expertise and success in supporting public sector organizations with their transformation efforts uniquely positions the company to help assess how Public ROI can be a crucial measurement for governments. Public ROI can be used to demonstrate trustworthiness to citizens, help ensure governance in the value of operations, promote positive community programs to business constituents and boost efforts for securing public funds. Social and political returns can also help governments meet objective performance standards, reflecting the multi-dimensional benefits organizations deliver to constituents.

“It’s clear there needs to be a better way to measure the extent to which government transformation projects impact the world around us,” said Tom Shirk, president, SAP Global Public Services. “While financial measures remain important, we need to take stock of the other factors that contribute to fulfilling the objectives of public sector agencies. Are social service cases being processed with greater accuracy and results? Are citizens better able to access local services? These are the real-life issues that governments are addressing through their use of technology. The goal of SAP’s Public ROI initiative is to provide government leaders with a framework to identify and quantify real-world returns.”

About SAP for Public Sector
SAP for Public Sector provides comprehensive solutions to help governments and public organizations improve economic viability and increase process efficiency and transparency while better serving the needs of the public. With more than 1,050 customers in 70 countries, SAP is the leading provider of enterprise business solutions to the public sector. (Additional information at <http://www.sap.com/publicsector/>) About SAP
SAP is the world’s leading provider of business software solutions*. Today, more than 27,000 customers in over 120 countries run more than 91,500 installations of SAP® software—from distinct solutions addressing the needs of small and midsize businesses to enterprise-scale suite solutions for global organizations. Powered by the SAP NetWeaver™ platform to drive innovation and enable business change, mySAP™ Business Suite solutions are helping enterprises around the world improve customer relationships, enhance partner collaboration and create efficiencies across their supply chains and business operations. SAP industry solutions support the unique business processes of more than 25 industry segments, including high tech, retail, public sector and financial services. With subsidiaries in more than 50 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE under the symbol “SAP.” (Additional information at <http://www.sap.com>)

(*) SAP defines business software solutions as comprising enterprise resource planning and related software solutions such as supply chain management, customer relationship management, product life-cycle management and supplier relationship management.

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