This article focuses on componentizing the enterprise resource planning (ERP) application packages. The concept of componentizing will help in adding new functionality rapidly and at low cost, while making it easier for new customers to upgrade to that new functionality. The parts of a componentized software product may be constructed by potentially many different manufacturers and then brought together to be assembled very rapidly. The assemblers do not need to be experts in the internals of each assembled component. Component is a separate, encapsulated entity and by virtue of its separation is easier to manage, upgrade and collaborate with and so on. The granularity, scope boundaries and internal cohesion are important attributes of the component. A fine-grained component will be simple to upgrade, have fewer relationships but will require more management because there are likely to be many more parts to meet the requirement. Componentized software increases the ability to integrate applications with other packaged, built and legacy applications now and in the future. A major advantage of componentized applications is the incremental release and upgrade process. This is beneficial in the initial implementation as well as ongoing enhancement.