Enterprise resource planning: componentizing the enterprise application packages

T he so-called enterprise resource planning applications market was one of the fastest growing and most profitable areas of the software industry during the last three years of the 1990s. Some of this was clearly attributable to the Y2K effect. If you still had time, replacement was often easier than continuing to throw good money after bad into aged legacy applications. But, also discernible, there was a strong desire in many organizations to acquire functionality rather than develop custom solutions, particularly for relatively unexciting transactional applications that did not differentiate the business significantly. But we should also note that some of the packaged application vendors acquired a poor reputation, being better known for the time and cost involved in implementation than the resulting business benefits. So, we observe with interest that enterprise application providers such as SAP, Peoplesoft, Oracle, Baan, JD Edwards, and many others have been investing heavily to upgrade the architecture of their applications over the past two years. No prizes are awarded for guessing why. The market-leading enterprise applications represent some of the largest, most complex applications on the planet. The complexity comes particularly from the highly generalized nature of the packaged applications and the need to adapt and rapidly evolve to meet requirements in many different situations. The packaged application providers therefore have had a genuinely mission-critical problem to solve. How to continue adding new functionality rapidly and at low cost, while making it easier for new customers to implement, and existing customers to upgrade to that new functionality? We should not be surprised therefore that these vendors were relatively quick to recognize the benefits of components. David Sprott