OOPSLA'96Business Object Workshop II

The Evolution of Enterprise Information Systems -- From Sticks and Jars Past Journals and Ledgers Toward Interorganizational Webs of Business Objects and Beyond

William E. McCarthy, Michigan State University, 21277wem@msu.edu
Julia Smith David, Arizona State University, julie.smith.david@asu.edu
Brian S. Sommer, Andersen Consulting, brian.s.sommer@ac.com


The semantic distance between the reality of a business enterprise and its implemented model -- its information system -- has slowly decreased as measurement techniques, representation models, and computer technology have progressed. Thousands of years ago, economic matters were tracked by artifacts such as notched sticks and clay jars which stored imprinted figures (Dunn and McCarthy, 1992). With these primitive tools, transaction data was recognized and recorded, but without any overarching economic rationale. With advances in arithmetic and writing/printing technology, and dramatic changes in the business environment, investors required some kind of overall periodic judgment of the success of efforts such as a shipping venture or a manufacturing endeavor. These changes put pressure on the dominant class of systems, and over time, the accepted information systems became ill-adapted to the emerging environment.

At some point, an evolutionary mindset would predict the emergence and flourishing of new types of information systems. In fact, this did occur in 1494 when Luca Pacioli rectified the unorganized state of affairs for commercial undertakings with the advent of double-entry bookkeeping. A bookkeeping model represents economic reality with the classificational artifacts of accounts which are actually successively refined divisions of one monetary equality (Assets = Liabilities + Equity). This scheme remains common today, and with it, increasing complexity and faster-paced reaction needs are most often accommodated by finer and finer account partitions, an awkward adaptation made somewhat viable by spreadsheet technology, but nonetheless very clumsy. Pacioli's framework served businesses well for over 400 years, but the enabling technology of computers and increasing organizational complexity resulted in an environment that produced adaptations like materials requirements planning systems which supplemented the entrenched ledger-oriented software.

More recently, the competitive pressures of faster cycle times and a worldwide information-driven business environment are forcing even more dramatic changes. These evolutionary shifts are reflected in the marketplace of business software where new enterprise information systems are supplanting general ledger and other accounting-oriented modules in many companies. The advent of ERP (Enterprise Resource Planning) systems like SAP's R/3 is an example of the new "species" of information systems. ERP systems are not bookkeeping driven, but are instead organized around the basic economic rationale of the enterprise value chain -- a process view of a business that regards all transactions as steps in a value accumulation sequence which provides a firm's customers with a final portfolio of desirable product attributes. This movement away from inflexible accounting artifacts and towards adaptable representations of enterprise value chains would also predict the increasing emergence of business object frameworks where the semantic distance between an economic reality (an enterprise) and the computer representation of that reality decreases even more dramatically.

Figure 1

In this paper, we take the evolutionary changes described above and put them in a formal analysis and classification framework patterned after biological evolution. Our biological and software frameworks are displayed in hierarchical form on Figures 1 & 2. The following discussion points provide an overview of the five major categories of enterprise information systems that have evolved in the past and could emerge in the future (the comparable biological species are shown in parentheses).

Our predicted evolutionary emergence of highly sentient and highly interconnected enterprise models is of course open to speculation on its validity. For example, some analysts might contend that present-day ERP packages do not actually contain the full models of enterprise value chains that they purport to comprise; instead they are idiosyncratic amalgams of accounting-driven software solutions for different parts of a company. This makes them highly-developed reptiles instead of mammals, and if we suppose that the same present-day market demands for interconnectivity discussed above causes them to be used across organizational boundaries, it might be the case that non-abstract, non-conceptual, and non-object-oriented solutions could be proposed and used extensively in the software marketplace. Like the dinosaurs of yore, however, we would believe that the limited semantics of such suites would eventually cause them to lose out to their more knowledge-based competitors.

As a final note to this preliminary outline, we would like to emphasize that just like the biological species of Figure 1, our species of enterprise information systems being arranged in a hierarchy does not mean that the lower order species are not more dominant in some restricted ways. Insects and one-celled animals thrive today, and Quicken (and its clones) thrives as well. In fact, it might be possible for some of the more appealing features of Quicken to take an evolutionary leap over the 3-6 systems to be united with enterprise-oriented systems and ultimately with inter-enterprise systems. Those appealing features are its ease of use, its simplicity of operation, and its close correspondence to the manual tasks it replaces -- an evolutionist would call these the traits that account for its reproductive fitness -- and it would be difficult with present technology to see them implemented for enterprise systems with extremely high transaction loads. However, as process and storage costs continue to decrease and as object-oriented analysis methods become more refined, the selective seeding of those features onto 7-8 systems becomes more feasible.

Figure 2


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Geerts, Guido and William E. McCarthy (1996). "Modeling Business Enterprises as Value-Added Process Hierarchies with Resource-Event-Agent Object Templates" in

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McCarthy, William E., Julia Smith David, and Brian S. Sommer (1996). The Evolution of Enterprise Information Systems, paper in progress (available in November-December 1996 upon request).

OOPSLA'96Business Object Workshop II