What's Next for Enterprise Software

Forrester analysts highlight solutions to five top business pains

Tempe, AZ  September 11, 2002  The economy continues to meander through the valley of uncertainties, but that isn't stopping enterprises from looking for solutions to specific business pains, according to a recent report from Forrester Research.

In the report, "Memo to VCs: Invest Apps Dollars Here," the technology consultancy's analysts note that 19 percent of Global 3,500 companies are set to increase their information technology budgets during the second half of 2002.

Those companies are going to have to spend their IT dollars somewhere, and Forrester Research Director Laurie M. Orlov, along with her colleagues Charles Rutstein and Taichi Nakashima, point to solutions for five business pains that enterprises are likely to address in the immediate future.

First, the analysts highlight event-driven adaptive software that can help alert companies to problems in their supply chains, like machinery failure at a supplier or a change order from a customer. Solution providers such as Exemplary and Factory Logic offer solutions that tie ongoing "execution events" back into supply chain plans, allowing companies to modify their operations in real time as events unfold.

Of course, you can't react in real time if your company's IT infrastructure doesn't support rapid changes in planning and operations. Therefore, Forrester's analysts suggest that companies will look to augment their enterprise resource planning systems with "organic applications," Web services libraries combined with intelligent agent technologies. These systems can build on an ERP system, which will continue to provide a platform for customer, order and product data, the analysts write.

In addition, companies should consider "strategic application service providers" (SASPs) to provide specific functionality through hosted applications. By using these providers, companies can avoid lengthy implementations that are divorced from process reengineering efforts within their enterprises. Forrester points, for example, to FreeMarkets, the provider of online e-sourcing solutions, and Logistics.com, which provides transportation management services, as examples of these SASPs.

Orlov, Rutstein and Nakashima also believe that enterprises will look for various solutions that help them connect, and work more dynamically, with their supply chain partners. These technologies include supply chain event handling and design collaboration tools, and they can help companies still using static, point-to-point electronic data interchange (EDI) links manage the increasingly complex supply chains created by greater use of outsourcing and the heightened dependence on one's suppliers.

Finally, the analysts suggest that, in light of the Enron and WorldCom debacles, companies will look to applications that use smart data-mining and exception-based alert technologies to detect possible financial irregularities. Providers like PaceMetrics and Searchspace are offering solutions that can model strategic decision risk or detect aberrations that could indicate fraud, Forrester writes.