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IT Plays Vital Role in Improving Corporate Governance


May 18, 2006

Landmark Survey Reveals Numerous Benefits of Integrating IT and Corporate Governance Including Reduced Duplication, Better Productivity and Cost Savings

TORONTO - A new IDC Canada survey reveals a significant majority of top Canadian businesses say information technology (IT) systems play an essential role in helping them meet their corporate governance objectives. The May 2006 phone and Web survey, titled IT’s Role in Corporate Governance, reveals that 69 percent of 100 C-suite executives (CIOs, CTOs, CEOs or CFOs) pointed to IT’s important (43 percent) or critical (26 percent) role in achieving corporate governance goals.

“The survey results clearly demonstrate the extensive business benefits of integrating IT and corporate governance, especially in today’s era of extreme competition and evolving regulatory realities such as Sarbanes-Oxley,” said Robert Courteau, president and managing director of SAP Canada, which sponsored the survey.

“This survey reinforces the strong role that information technology systems play in enabling Canadian companies to sustain and improve their business and, at the same time, meet changing regulatory and stakeholder requirements" added Joel Martin, vice president, Enterprise Software, IDC Canada. “In addition, companies indicated that integrating corporate governance initiatives with proven IT systems led to key benefits, including greater efficiencies, better productivity, less duplication of effort and cost savings.”

The survey assesses the role IT and enterprise applications play in corporate governance among Canada’s major enterprises. The study revealed that IT is critical for both leading private and public companies to foster good governance practices and to execute their business strategies and meet industry compliance standards.

Survey results show that companies that integrate their compliance process with IT systems are less likely to find sustaining corporate governance initiatives a challenge. Of the 100 business leaders surveyed from the Financial Post’s list of the top 800 firms across Canada, nearly 60 percent agreed that sustaining governance initiatives is an ongoing challenge. Of the other 40 percent, all indicated that integrating governance and compliance initiatives into enterprise applications made the difference.

Fully 76 percent of companies surveyed indicated they have compliance processes in place. When asked to specify a single benefit from integrating IT and governance, companies surveyed overwhelmingly indicated greater operational efficiency (57 percent of respondents). Other benefits obtained included increased productivity (14 percent), cost savings (13 percent), greater transparency to shareholders (12 percent) and accelerated implementation of governance processes (9 percent).

The survey also reveals that the enterprises face a number of key challenges when dealing with governance issues. They included the cost and time of collecting information (cited by 27 percent of surveyed companies), duplication of work (23 percent), cost of audits (15 percent), employee collaboration (14 percent) and security (nine percent).

Fifty percent of an organization’s governance efforts are spent on finding the right information multiple times. Fortunately, the survey shows a capable IT system that helps automate corporate governance processes also reduces the burden of issues such as duplication. Executives that previously worked on corporate governance have more time for other tasks, noted Martin.

“It’s a virtuous circle,” he said. “As companies invest in integrating IT with corporate governance, the more time executives have to innovate and help their companies compete and grow.”

The survey indicates that Canadian corporations are facing multiple governance or regulatory issues including:

* Sarbanes-Oxley and Bill 198 (mentioned by 51 percent of respondents)
* Personal Information Protection and Electronics Documents Act (PIPEDA) (38 percent)
* Workplace Hazardous Materials Information System (34 percent)
* Environmental Act Compliance (18 percent)
* US Patriot Act (11 percent).

“Many of these concerns, such as Sarbanes-Oxley and PIPEDA, are relatively recent corporate governance challenges and the demands they are placing on Canadian companies are helping to drive today’s investment in IT,” said Martin. “In fact, investments in enterprise applications will rise nearly 7 percent in this year, and 22 percent by 2010.”

About SAP Canada
SAP Canada, based in Toronto, is a fast-growing subsidiary of SAP AG, the world’s leading provider of business software. SAP applications are helping Canadian enterprises improve productivity and customer relationships, reduce costs, increase revenues and profitability, and create efficiencies across supply chains and business operations. SAP Canada has more than 600 customers and 800 employees in five offices across the country. In addition, SAP Labs Canada develops cutting-edge software for a wide array of SAP applications from its Montreal location.

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About SAP
SAP is the world’s leading provider of business software*. Today, more than 33,200 customers in more than 120 countries run SAP® applications—from distinct solutions addressing the needs of small and midsize enterprises to suite offerings for global organizations. Powered by the SAP NetWeaver® platform to drive innovation and enable business change, SAP software helps enterprises of all sizes around the world improve customer relationships, enhance partner collaboration and create efficiencies across their supply chains and business operations. SAP solution portfolios support the unique business processes of more than 25 industries, including high tech, retail, financial services, healthcare and the public sector. 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

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

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