Back in the 1990s, when everyone was first buying enterprise resource planning software, integration was the main selling point. Companies that once had the classic silos of information between finance, manufacturing, and human resources could finally achieve, hopefully, that single view of the truth.

ERP has vastly expanded its offerings since then, particularly in supply chain management and customer relationship management software.

The continuing pace of globalization has made it clear that competition in the 21st century will hinge on how well companies can understand, manage and control their complex business processes across an increasingly global set of markets. This formed the core of ERP offerings from vendors such as SAP, Oracle, PeopleSoft and J.D. Edwards: integrate complex back-office functions and provide the ability to better manage these operations from a single software vantage point.

The increasing role of integration has started to create important changes in the enterprise software landscape. Functional leadership in software used to come from best-of-breed vendors--companies like Siebel that offered specialized software for customer relationship management, or supply chain vendors like i2. These vendors were able to capitalize on the need to automate individual functions as the customer's primary objective. Hidden was the fact that companies deploying software from an i2 or a Siebel were often already using ERP software from an SAP or Oracle, and, for the most part, these best-of-breed implementations weren't well integrated to the existing ERP infrastructure.

A similar best-of-breed problem is playing out in the relationship between large, World Trade 100 companies and their subsidiaries worldwide. While many of the larger global companies--Nestle with SAP, for example--have standardized on a single vendor's product suite as a means to achieve global business integration, that standardization is often limited to headquarters operations and perhaps a handful of top subsidiaries.

The relative cost of integration issue is about to play out in the market for the small and medium enterprise. These companies, many of which have traditionally relied on specialized vendors, are now being driven to work more and more in lock-step with either their parent companies or their larger partners and customers. This has made integration an equally important imperative, and has led many companies to reassess their enterprise software strategies. And the vendors are responding. Though their strategies differ (SAP is offering "light" versions of its products for this market, while Oracle is focusing on providing low-cost hosting for its small and mid-sized customers) the impact promises to be similar. The value of integration will weigh more heavily in the software buying decision than ever before.

Why is this good for the software buyer? Putting the burden of integration on the software vendor can save on implementation and software costs. And making a single suite vendor responsible for supporting integration can also yield more rapid implementations. That means a faster time to market for new products and a faster response to emerging competitive threats. Which is, lest we forget, the reason why anyone buys enterprise software in the first place.