Heartbeat or Heartache for Enterprise Applications?


Henry Morris, senior vice president of software research at IDC, was the expert in a February 12 webinar on enterprise applications entitled "Enterprise Applications: Heartbeat or Heartbreak?"


Henry concentrated on user plans for enterprise applications in light of the 2008-2009 economic down turn. He cited an IDC study from October 2008 that fell on the heels of the Lehman collapse (but before the further stock market collapse after the election). With that caveat, it should reflect user plans looking at the next few years.


Henry made the point that there will continue to be growth likely in Web, CRM and financial analytics applications. But he noted that users will even increase investment in core applications more than they will decrease such spending. According to the IDC study, only about 25 percent of enterprises across all company sizes are likely to "ratchet down" investments in enterprise applications. Very small companies (under 100 employees) and companies with between 1,000 and 9,999 employees were most likely to cut as compared to the rest of the sample. (I believe the 250-person survey is based on a U.S. sample.)


So tying back to the title, there is a heartbeat for enterprise applications.


Henry used another recent IDC survey question to make the point that there is


"No false choice between build and buy."


He said IDC has found that 10 percent of you do buy application functionality only and 9 percent of you build it totally. But the majority of you do both and want the choice to do both. Forty percent buy with some customization and another 23 percent of you think of yourselves as builders using some purchased packaged software (as opposed to totally working from scratch with application development and deployment software).


Henry made the point that there is still some "Heartbreak" in the application decision, however. There is still the complexity of keeping up with past customizations, integration of various packages even if there are no customizations, and the subsequent testing after you do either of these activities. Henry points out that mergers and acquisitions (and similar combinations with suppliers and partners even if there is no M&A) compound the "heartbreak." The changes coming because of IFRS, increased regulatory compliance, the focus on risk monitoring, etc. will all add to this.


A third aspect of heartbreak is the fact that most users are in the midst of architectural changes such as the ongoing movement between classic client/server to service-oriented architecture (SOA). It's not SOA that is the problem, he says. But neither should users think of SOA as the solution; it's the process functionality built into the software.


The session was sponsored by Agresso, which is known as an ERP supplier but which is clearly applying the convergence of ERP and business process management (BPM) to its products. The host, Judith Rothrock, explained that Agresso has always worked off a process mentality rather than in stovepipe modules. (Truth in advertising: Judith was one of the best PR people I ever met. In the 1990s, she was able to convince some pretty savvy people that then "little Hyperion" deserved to be mentioned in the same breath with the big ERP boys. A few years later, she pulled off the same play while quarterbacking Lawson's marketing efforts. At it again, huh, Judith?)


As an aside, I was happy to see that Henry also talked about the combination of business intelligence (BI) and BPM. He says it's a natural extension of the ERP concept and not really new. In his words:


"BI divorced from the process is not helpful."


IDC is still using the term "intelligent process automation" that I use over at ebiq.net, where I am the BPM community manager. (Another truth in advertising: That's not coincidental. I was the ERP analyst at IDC from 1997 to 2003 and the BPM analyst from 2003 to 2006. Henry was at different times my software-research peer, my boss and then my boss' boss. Clearly, I trained him well in ERP and BPM.)