| Abstract: | As the market for governance, regulation, and compliance tools heats up, SAP stakes its position on industry-specific applications enabled by its partner network. |
| Keywords: | Governance compliance risk, GRC, SAP, REACH, RoHS, WEEE, Sarbanes Oxley, Sarbox, SOX, electronics customs filing |
Enterprise software stalwart SAP this week made a series of announcements that further the company's efforts to build out its portfolio of governance, risk, and compliance products.
In the wake of GRC2007, an annual conference held this week for users of governance, risk, and compliance (GRC) products, SAP announced an Executive Advisory Council for its GRC group that is aimed at strengthening the company's partnerships for GRC applications and tapping into customer feedback on new products. The company also revealed a new application for chemicals companies tasked with meeting the documentation standards of the European Registration, Evaluation, and Authorization of Chemicals (REACH) mandate, as well as new software that facilitates electronic customs filing and management for companies operating in European countries.
For manufacturers that must comply with the European Union's eCustoms Initiative, SAP throughout the coming year will release its Automated Export System — which it said can be deployed as a stand-alone application or as part of the SAP GRC Global Trade Services product — in country-specific versions. The software will help companies meet the recently updated standards for electronic customs filings.
For chemicals companies that must observe the newly enacted REACH standards, SAP will add relevant management capabilities to its existing Environment, Health & Safety applications, which the company said are in use at 1,000 companies. The initial REACH-based functionality, which will be available to existing customers as part of the normal maintenance cycle, will allow companies to track the substance volume of the specific chemicals they sell. SAP tapped the industry expertise of partner company TechniData, which has been developing various compliance applications since 1985.
TechniData, in fact, is one of the first partners SAP identified as a member of its new Executive Advisory Council for GRC. The council complements SAP's strategy of leveraging the expertise of partner companies in developing GRC applications for specific verticals, according to Amit Chatterjee, senior vice president of SAP's GRC business unit.
"We want to be able to provide a framework, and then we want to be able to have the partner be able to deliver the content value around being able to, for example, manage environmental health and safety for customers," he told Managing Automation. "This allows us to cover a broader swath of industries and regions more effectively than if we were to do it alone."
In addition to TechniData, early participants in the GRC council include SAP customers Adobe Systems Inc. and Chevron Corp. and partners Cisco, Deloitte, and Protiviti.
As SAP hones its focus, the feeding frenzy in the GRC market grows, with bigger vendors such as SAP and Oracle Corp. jostling for position in what is a relatively new software arena. In 2002, the holistic idea of a governance, risk, and compliance suite came into full view with the passage of the Sarbanes-Oxley Act (SOX), which gave public companies a slew of mandates to follow that, in most cases, were best managed through software. Indeed, AMR Research found that since 2005, companies have spent $6 billion annually to assure their compliance with SOX.
And yet, as SAP's recent announcements attest, the market for GRC encompasses more than SOX compliance. AMR notes that the $6 billion spent yearly on SOX compliance represents only about 20% of the approximately $30 billion that companies devote to compliance, which includes not only software purchases but personnel costs, service expenditures, and other resources.
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