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July 12, 1999

Application Reach Expands

As Y2K work winds down, IT departments begin to tackle the pent-up demand for new business applications

By Alan Radding

Illustration by Matt Foster here's no rest for weary application development shops. Whether your department is wrapping up year 2000 testing or trying to address your company's demand for electronic-commerce applications, application development efforts are poised to go into overdrive.

For some IT departments, the new initiatives have already begun. For others, the action won't start until next year. But whenever it arrives, the new development will push IT skills and resources to their limits.

Lucent Technologies Inc. is unleashing its developers on a large backlog of projects that resulted directly from the company's Y2K efforts. "We had to put manpower into Y2K and delay these other projects. But now we're starting to schedule these other efforts," says Richard Li, a technical staff member. These projects are all related to simplifying the manufacturing process, supply chain, and enterprise resource planning.

The Hurwitz Group, a consulting firm, has dubbed this application development phenomenon E2K, for Enterprise 2000. "E2K is triggering a spending spree as companies ramp up development to compete with all the dot-com startups," says CEO Judith Hurwitz. The challenge IT shops face is to put the systems in place for electronic business in the new millennium, she says.

Giga Information Group is also tracking the anticipated hike in company application development activity, but Giga characterizes these efforts as legacy renewal. "Legacy renewal is the incorporation of legacy assets into ongoing application development activities," says Liz Barnett, author of a Giga report on post-Y2K trends. "Legacy renewal will be a primary focus of IT shops once year 2000 conversions are complete."

Even though most IT shops are freezing system changes in the second half of this year, many are starting the initial design work for applications that will be deployed next year. "We have things on the back burner that we want to move forward," says Stephen Chanis, a senior systems consultant at Allmerica Financial, a diversified financial-services company in Worcester, Mass. The company is putting the final touches on its last new projects before a fourth-quarter development freeze takes effect. "We're already starting to plan future development," he says. The Y2K freeze will prevent the development group from deploying new applications, but it won't halt development.

For others, Y2K is only tangentially related to the application development surge. "We're doing much more application development now than in years past," says Joseph Ruffolo, software architect at Nu Skin Enterprises Inc., a $1 billion global personal-care company in Provo, Utah. Ruffolo is embarking on a five-year application development plan for 2000 and beyond.

Although Y2K was a real eye-opener for Nu Skin, the catalyst that forced the company to take a hard look at its application portfolio was globalization and double-digit growth. The result is that Nu Skin plans to jettison a number of its existing applications.

Whatever is behind the surge in application development--and it may be different for each company--several things are clear: the new development activities will require new technical skills, tools, architectures, and infrastructures that combine legacy systems and Web technologies. There is also the question of how companies are going to pay for all this application development.

Enterprise application integration will certainly be a big part of whatever application development groups do. Integration of legacy applications, packaged applications such as ERP and customer-relationship management solutions, and new Web-oriented development represent the bulk of the development efforts at most companies.

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