Switching to Composable ERP in 5 Easy Steps

As a business owner, I'm sure you've realised that we are living in interesting times. Anything can happen at any time to topple the apple cart, and there's a lot of pressure to keep up with a constantly evolving marketplace.

Which means you have to be constantly balancing tasks, trying to glean meaningful information from data scattered across different platforms, and trying to keep customers happy on a consistent basis.

Now there are software tools that can help you bring order to all this chaos. The key is to integrate your core operations into a single system, while remaining adaptable, and being able to scale up or down when needed. 

Seems almost impossible, but that's the genius of composable ERP. The reason it works so well is that it's modular. Which means it's super flexible and transforms traditional ERP from a “implement once-and-done” software implementation into a strategy that grows with you and adapts to your needs.

In this blog post, we’ll look at composable ERP in some detail. We'll explore what makes this approach so revolutionary and why it’s different from traditional ERP systems. Finally, we'll look at all the steps you need to follow to successfully get composable ERP up and running your organisation. Let’s dive in!

What exactly is Composable ERP?

At its core, composable ERP breaks the mould of traditional ERP systems, which are typically monolithic and feature-heavy. Traditional ERP systems often provide a standardised set of tools and applications bundled into a single software suite, but they lack the agility to keep up with fast-paced business changes.

Composable ERP takes a modular approach: think of it as a “plug-and-play” ERP strategy. This new model allows you to build a customised suite of applications from a range of specialised options, creating a tailored ERP system that aligns with your unique business processes. Rather than being tied to a single vendor’s solution, composable ERP lets you choose the best applications available for each business function and integrate them seamlessly.

Here’s a closer look at what sets composable ERP apart:

• Flexibility: You’re not tied to a single solution. Instead, you can combine and replace applications as your business evolves.
• Scalability: As you grow, your ERP grows with you. It can handle more data, connect to new systems, and manage increasingly complex processes without requiring a full overhaul.
• Continuous Improvement: Composable ERP isn’t a “set-it-and-forget-it” system. It’s built for ongoing optimization, allowing you to integrate new technologies and innovations as they emerge.

Gartner, a leading research and advisory company, coined the term “postmodern ERP” to describe this shift away from the one-size-fits-all approach. They define postmodern ERP as a “technology strategy that automates and links administrative and operational business capabilities, with integration that balances vendor-delivered solutions and the flexibility to adapt.”

Why Make the Shift to Composable ERP?

As we all know, the digital business landscape is evolving at breakneck speed. Companies today require agile systems that help them adapt quickly to market changes, respond to customer needs faster, and scale efficiently. Here’s why composable ERP is a valuable tool for meeting these demands:

1. Adaptability: Quickly swap, add, or adjust components to meet new challenges without overhauling the entire system. With composable ERP, you can pivot your operations quickly by integrating new applications or replacing outdated ones. Whether you’re adapting to changes in customer demand, regulations, or market trends, a composable ERP keeps you agile.
2. Cost Efficiency:  In a traditional ERP setup, scaling often means significant investment in additional licences or upgrades. With a composable setup, you choose only what you need, reducing implementation costs and ongoing maintenance.
3. Enhanced Integration: A composable system gives you access to real-time data across departments to drive smarter, faster decisions. Which means your leaders get instant access to critical insights, supporting better decision-making based on current, accurate information.
4. Improved Customer Experience: Seamless access to customer data across departments allows for quicker response times and a more personalised customer experience, which is crucial in today’s competitive landscape.
5. Future-Proofing: A composable ERP system is designed to keep pace with technological advancements, so you’re always ready to leverage the latest tools and applications without being tied to a rigid system.

Steps to Implementing a Composable ERP

Okay, so now I've sold you on the wonderful benefits of Composable ERP. But how do you transition your business to a totally different software architecture—without ballooning costs and disrupting your current operations? Well, there are a number of steps you can follow that will ensure a cost-effective, seamless transition.

Step 1: Align Your ERP Strategy with Business Objectives

Using composable ERP means you have to think differently about the software you use. Because a composable system isn't just different software—it's actually a software strategy that needs to be implemented and revised on a continuous strategy.

Traditional ERP systems often fell short in this area, as they weren’t inherently designed to adapt and evolve in response to changing business needs. With composable ERP, however, aligning the ERP system with business goals is essential for maximising its value.

To get it right, start by gathering your team of IT and business leaders and find out what you are aiming for—do you want to be more responsive to changes in the market, process orders faster, or perhaps take your customer service to the next level? 

Here's what you have to do:

1. Define Key Business Objectives: Begin by gathering input from key stakeholders—business leaders, IT, and department heads—to outline the business goals your ERP needs to support. Are you looking to improve operational agility, streamline workflows, or enhance customer satisfaction? Clarity on these objectives ensures the ERP aligns with your company’s long-term vision.
2. Develop a Strategic Roadmap: Unlike traditional ERP, which may only require a big update every few years, composable ERP demands an agile, ongoing approach. Work with your IT and business teams to create a roadmap that prioritises immediate needs, anticipates future requirements, and outlines periodic review checkpoints.
3. Establish Cross-Functional Collaboration: Composable ERP implementation should be a cross-functional effort, with IT working closely alongside business leaders. This collaboration ensures that technical capabilities align with business objectives, resulting in a system that serves all areas of the organisation.
4. Balance Flexibility with Control: While composable ERP offers unmatched flexibility, it’s crucial to strike a balance. Avoid the temptation to continuously swap or add applications without assessing their impact on the whole system. Periodic evaluations help maintain alignment between ERP components and your evolving goals.

Step 2: Update Your Data, Analytics, and Integration Plans

One of the biggest promises of ERP systems has been total transparency and accessibility to data across departments. Yet, traditional systems often fell short here due to limited customization. 

Which is why composable ERP is so revolutionary. It lets you take full control of your data, integrating it with any business function you choose.

Here’s how to build a strong data integration framework:

• Create a Flexible Data Architecture: Ensure your data architecture can accommodate new applications and systems as they’re added. Which means you have to design your data architecture to accommodate multiple applications, clouds, and systems as your business needs evolve. By building a flexible data environment, you ensure your ERP can grow and change without costly overhauls.
• Support Hybrid Integration Strategies:  You have to adopt a flexible, vendor-neutral approach so that your system can integrate with a wide range of platforms. In fact, a vendor-neutral integration strategy is key to composable ERP. This approach allows you to mix and match solutions from various vendors, creating a “best-of-breed” system that delivers maximum functionality.
• Invest in Robust Data Management: The key to avoiding complex customizations is to formulate a solid data plan that meets your business’s unique needs. As with any business software, effective data management underpins the success of composable ERP. Set up a data governance framework focused on consistency, quality, and accessibility. By managing data effectively, you empower your teams to make data-informed decisions at every level.
• Prioritise Real-Time Data Accessibility: The composable ERP model is designed to deliver immediate access to data across departments, which is vital for fast, accurate decision-making. Ensure that data updates happen in real-time, so your team always has the latest insights on hand.

Step 3: Organise for Ongoing Value Creation

Composable ERP is all about continuous improvement. This isn’t a “set it and forget it” system. Rather, it’s a living strategy that requires regular evaluations. Which is why, for example, you need to put together a team to oversee the ERP’s performance against your original business objectives and make adjustments as needed.

Suggestions for ensuring continuous improvement include:

1. Set Up a Dedicated ERP Leadership Team: Appoint a team responsible for overseeing ERP performance and ensuring it remains aligned with business goals. This team should regularly evaluate the system’s effectiveness, recommend updates, and make necessary adjustments as your business grows.
2. Regular Evaluations: You have to monitor your ERP’s effectiveness and measure KPIs regularly. Whether it’s reduced operational costs, faster decision-making, or improved customer satisfaction, tracking these metrics provides valuable insights into the ERP’s impact.
3. Stay Agile: Another key is to keep adjusting your applications and processes as your business evolves. Your business goals change with time—which means your software should adapt to stay aligned with those changes.  Train your ERP leadership team to identify when updates or new applications are necessary, ensuring the system continues to meet your business’s evolving requirements.
4. Invest in User Experience: This is something that few businesses do, but regularly assess the user interface. You have to adopt a system of continuous improvement if you want to maintain a high level of user satisfaction. Look for areas where processes can be streamlined, applications enhanced, or interfaces improved. A user-friendly ERP increases adoption rates and overall effectiveness.

Step 4: Build and Reskill Your ERP Support Team

A composable ERP system, with its modular, evolving structure, demands a team that’s flexible, knowledgeable, and ready to adapt. Unlike traditional ERP systems, which often required deep specialisation in one system, composable ERP benefits from a team of generalists with a broader range of skills.

Here’s how to create a resilient, skilled ERP support team:

1. Focus on Developing Generalist Skills: In the composable ERP model, your team needs to be adept in multiple areas—data querying, application architecture, coding, and report building. This versatility enables them to integrate and troubleshoot various applications within the ERP ecosystem, enhancing flexibility and responsiveness.
2. Encourage Familiarity with Open Technologies: As composable ERP evolves, your team will likely encounter a range of technologies and platforms, some of which may be new to them. Encourage them to work with open technologies, which promote adaptability and integration. Familiarity with diverse tech ecosystems empowers your team to integrate new tools seamlessly.
3. Invest in Ongoing Training: The rapid pace of technological advancement means your team’s skills need constant updating. Regular training in new coding languages, integration techniques, and low-code/no-code platforms will help them stay current, ensuring that your ERP system remains efficient and effective.
4. Promote a Culture of Experimentation and Learning: Composable ERP systems benefit from an experimental approach. Allow your team to test new tools and integration methods, encouraging them to find innovative solutions that align with business goals. This not only empowers your team but also maximises the potential of your ERP system.
5. Adopt a Cross-Training Approach: Equip team members with complementary skills so they can cover for one another when needed. This prevents knowledge silos, ensuring that system management isn’t dependent on a single expert.

Step 5: Organise for Continuous Improvement and Long-Term Value

With a composable ERP system in place, long-term success hinges on regular evaluations, adjustments, and a mindset focused on continuous improvement. Unlike traditional ERP systems that often remain static between updates, composable ERP is designed for dynamic, ongoing adjustments that enhance business outcomes.

Strategies for ensuring ongoing success:

• Establish a Regular Review Cycle: Set up regular checkpoints to assess the system’s performance against your business objectives. This helps you identify areas that need improvement and ensures the system remains aligned with your evolving goals.
• Measure ERP Success with Clear Metrics: Track specific metrics—such as time savings, cost reductions, or improved customer satisfaction—that reflect the ERP’s value. Regularly evaluating these KPIs provides a clear picture of how the ERP is performing and identifies areas for enhancement.
• Stay Flexible with Your ERP Configuration: Composable ERP systems are meant to grow and change as your business does. Don’t hesitate to introduce new applications, replace outdated modules, or refine integration processes as needed. This flexibility ensures that your ERP evolves in step with market changes.
• Focus on User Experience: A positive user experience is critical to ERP adoption and effectiveness. Regularly survey users and assess the system’s interface, usability, and accessibility. Make adjustments as necessary to keep the ERP intuitive and user-friendly.
• Engage with Emerging Technologies: Keep an eye on advancements in AI, machine learning, and data analytics that could enhance ERP functionality. The modular nature of composable ERP allows you to incorporate cutting-edge tools without overhauling the entire system, helping you stay competitive in a rapidly changing market.

Conclusion

Composable ERP is a whole different approach to enterprise software. It gives you the ability to break free from the rigid, one-size-fits-all models of the past. Which is why so many businesses have made the shift to a composable strategy—it allows them to stay agile in an unstable marketplace. 

This is often easier said than done, but with the right planning, the right team, and a mindset of continuous improvement, taking the leap to Composable ERP could just be the best thing you could do for your business.

The benefits of this type of architecture makes it well worth your while: higher efficiency, lower costs, and a level of scalability and flexibility of which you could only have dreamed ten years ago. 

The steps outlined in this article will help you make the switch to composable ERP in an effective manner. This is well worth the expense, time, and effort, because it will ensure that you’re never tied to outdated tools or processes.

Composable ERP is the true way to future-proof your business, because the system is always changing with the times. Ready to empower your team and transform your business operations? Embrace composable ERP—and let your business grow in ways you never thought possible.