Enterprise Services Architecture Will Triumph in the Long Run

Feature Article | May 9, 2005 by admin

Hans Robert Hansen

Hans Robert Hansen

Your teaching and research focus on information systems for marketing and commerce. What questions are you dealing with in these areas?

Hansen: In the past 10 years, we’ve developed several industry-specific reference models for e-commerce systems. In my business IT seminars, for example, we always take one industry, develop an ideal and typical Web site for the industry in collaboration with a leading company in the industry, and integrate it with the company’s internal information systems. That’s how the first Web site of Bank Austria appeared in 1994-95. At that time, we also developed a modeling language for such a Web site. We collaborated with Austrian Airlines on an online reservation system and created a security concept. We also worked with the competition, Lufthansa Österreich, to design a Web site. We integrated research and teaching in dozens of similar Web projects, many of which carried over into student theses. However, we undertake these kinds of practical projects only when they also bring us further ahead scientifically. We always use an individual case to gain theories and recipes for similar cases.

For example, we’re interested in the question of data quality at the moment. Gathering customer data over the Internet is simple and inexpensive, but the quality of such data is unclear in many cases. That’s why the use of such data in marketing is questionable. We use empirical inquiries to analyze the essential influencing factors for the readiness to circulate correct data so that companies can respond adequately.
When I speak of “us,” I mean our team of ten scholars, who closely collaborate under my direction in an e-commerce research program that we have developed together. Each team member deals with something like a module. For example, Horst Treiblmeier, an outstanding, up-and-coming scholar, is responsible for data quality. In the area of e-commerce, our research also examines media policies on the Internet, individualizing products with tool kits, recommendation systems, pricing policies for digital goods, and improving the flow of information in distribution and in the support of upper management through analyses of cost structures in e-commerce and the development of key figure systems.

Where do you see the future for business software?

Hansen: The world is a big place; I don’t see a saturation of standard business software. Eastern Europe and the underdeveloped countries of the Far East and South America still represent an enormous potential for growth. In industrialized countries, where large companies already use the newest applications, potential markets exist in small and midsize companies and in industry-specific solutions. Small and midsize companies are of particular interest because the high-performance, highly integrated, and complete packages from suppliers used to be too complex and expensive for them. But the situation is changing with current developments – the ability to break down powerful systems like mySAP ERP or mySAP Business Suite into smaller portions and make the portions available as Web services. This development opens new markets. Only SAP has announced this approach, but the entire industry is already moving in this direction.

With SAP NetWeaver as its business application and integration platform, SAP is driving this development ahead. What are the risks with this development?

Hansen: The problem is that the complexity of the implementation grows enormously. On one hand, users model their business processes. On the other hand, users have a variety of modules from internal suppliers, third parties, or from their own companies. They can search for and combine the appropriate components. At first that sounds good, but the functional scope and data structures of the components often differ quite a bit. Paying attention to similar data structures significantly reduces the number of usable components. But because of SAP’s strong market position, we can expect smaller suppliers to adjust to SAP standards. Enterprise Services Architecture is also promising – not only from the viewpoint of the technical realization of IT, but also from the viewpoint of the business concept, which always focuses on the business problem. Even at this point, granularity must be clarified. But I mean that the step toward Enterprise Services Architecture is correct, and I’m happy that SAP, the market leader, is taking this step here. Highly modular applications with a mixed architecture use Web services to provide data from various information systems to employees responsible for business processes according to the employees’ roles and tasks at a given phase. They offer users much more flexibility during the design phase and reconfiguration of business processes than has ever been available before. They also simplify business-to-business collaboration among SAP users – in supply chain management or outsourcing, for example.

SAP is following a strategy to convert to Enterprise Services Architecture as soon as possible. How quickly will the new technology become established?

Hansen: Personally, I assume that relatively closed, large, and complete solutions will exist for years to come. But at the same time, highly modular solutions based upon Web services technology will still be serviceable. The conversion is a step-by-step process that can be compared with the conversion from SAP R/2 to SAP R/3. This process also lasted for years and was hardly free of any problems. For example, the runtime efficiency of SAP R/3 was a problem for many users at the beginning. But SAP solved the problem, which it will also do in the case of Web services technology.

You used to work for IBM Deutschland, but then decided on an academic career. The founders of SAP had formative power in the construction and use of standard business software. Didn’t this practical orientation excite you?

Hansen: I’ve often thought of founding my own company, as did my colleague August-Wilhelm Scheer. And many large companies have also approached me about setting up their Austrian subsidiaries. Ultimately, I turned down all the offers because scholarly work and independence meant too much to me. But my years in industry have also had a lasting effect on me. In principle, I move within a triangle of scholarly curiosity, interest in the practical realization of concepts that have been developed, and international experience. Actually, every university professor should have these characteristics.

The textbook on IT in business administration that you wrote with your colleague Gustaf Neumann is required reading at more than 50 German-speaking colleges and universities. In this book, you introduce mySAP ERP almost as a learning example. Is that approach typical of textbooks?

Hansen: We think over the designs and products we introduce very carefully. Students should be exposed to the same methods and tools that they are likely to confront later on in their professional lives. That speaks for products with a large market share. In addition, students attend a university for four or five years. What we teach must also be valid afterward. That’s why we may introduce only seminal products. But SAP is also an instrument to teach modern, IT-oriented business administration. In terms of the methods of business administration, the software is not at all behind current scholarly knowledge. This reality also shows that SAP follows current research with great interest. I see this openness to academic insights as one of the company’s strengths.

Hans Robert Hansen is a coauthor of a textbook on IT in business administration. Its sales of 450,000 copies have made it one of the most successful textbooks in German. The book is oriented to both students and specialists in companies. The ninth edition appeared in 2005 and contains information on business information systems, office applications, ERP solutions, e-commerce, and solutions that support management. Almost every chapter ends with an evaluation of the market and an overview of commonly available software products. The second volume of the textbook appeared in April 2005 and treats IT in more detail. The second volume is both a textbook and a reference work on hardware topics, system and development software, databases, computer networks, and distributed systems.

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