Today’s business climate is rife with economic uncertainty that is causing IT leaders to do more with less while still innovating to support the business. It’s a seemingly impossible dilemma: How to use innovation to drive business outcomes while being restrained by a reduced budget?
Fortunately, IT leaders can do both by adopting a composable ERP strategy that is focused on enabling business outcomes via flexible, best-fit technology that surrounds the existing core ERP solution. Such a move requires a foundational mindset shift — from forcing processes to fit within a rigid, tightly integrated application to a portfolio approach that builds out around the core ERP suite. The other key ingredient is to lower the cost of support and services for the core in order to create funds for innovation.
In this article, I explain the difference between an integrated ERP suite and a composable ERP strategy and look at the benefits businesses can experience after moving to a composable ERP strategy. Let’s dive in.
Differences between integrated ERP and composable ERP
An integrated ERP suite is the de facto approach for many companies. It’s designed to work as a single, unified solution in which all components are tightly meshed together. An integrated ERP suite is a comprehensive solution provided by a single vendor, which makes it easier to implement out of the box. They also tend to be stable and robust systems owing to thorough vendor testing and years in the market.
However, there are some downsides to this ERP approach. When businesses implement integrated ERP suites, they are dependent on the release roadmap of a single vendor, which typically includes an upgrade approach that affects the entire solution. If an organization needs a feature to address a specific problem, it must either wait for that feature to be folded into a main release or address the need with custom code. The main criticism of integrated ERP is that although it’s built to be one-size-fits-most, the result is a system that is one-size-fits-none. Organizations that rely on an ERP suite often bend their business processes to conform to the rules of the software, which can limit their potential and impede innovation.
Composable ERP is a flexible approach to creating an ERP solution that prioritizes business needs over rigid technology. Unlike integrated ERP suites like those offered by SAP and Oracle, businesses that use a composable ERP strategy surround their core ERP suite with an optimized mix of vendors, solutions, and technologies that best meet their unique needs. The end-product is an ERP portfolio built in a modular fashion, which welcomes the use of different technologies and platforms in order to best serve the business. It provides tight coupling in the core suite where needed and is loosely coupled with the best-fit products and services that dial in functionality that promotes competitive advantage and/or supports innovation. A composable ERP solution is not limited by its core vendor’s capabilities.
A composable ERP strategy isn’t all butterflies and rainbows, though. One drawback is the potential for a longer implementation process that accommodates the various products and services in the portfolio. It’s also essential to ensure that the data orchestration layer is clearly defined and robust enough to integrate data that crosses products and services.
Just as important is building a spirit of innovation within the IT department. Composable ERP systems often require system administrators and engineers who are accustomed to relying on the outputs of a single vendor, to partake in a paradigm shift. This ERP strategy gives them a more active role in selecting the best-fit technologies to meet the business needs, which shifts their role from maintaining the system to driving innovation throughout the business.
At Rimini Street, we believe that all businesses can benefit from a composable ERP strategy thanks to the abundance of SaaS platforms and data integration solutions. A composable ERP strategy empowers businesses to be nimble, agile, and able to optimize their unique environment to achieve their desired outcomes.
During uncertain times, composable ERP offers a flexible solution
Business leaders face a great deal of uncertainty today — from labor shortages and geopolitical instability to supply chain disruptions and rising inflation. In addition to general unease, many software vendors are pressuring customers to shift from owned software models to cloud-based models that bundle application- and database-managed services, licensing, hardware, and support into a recurring subscription payment.
Locking your entire ERP stack into an eternal subscription model doesn’t pass the vibe check of the current moment. Organizations need the flexibility to adapt during these uncertain times; the last thing they need is to be beholden to a single vendor, especially if the service they receive or the fit of the solution turns out to be subpar.
If organizations want to preserve their ability to respond quickly to the challenges and opportunities they face, a composable ERP strategy could be the better choice. Maintaining an integrated ERP suite by itself is like an organization keeping all its “eggs” in one basket, whereas a composable ERP strategy enables organizations to choose where to place their eggs. When an organization needs to change its ERP system because of external forces, it can swap out individual technologies, applications, and vendors as needed and in the least disruptive manner possible while still retaining the tight integration of the core components that are working as needed and seldom change.
The modular nature of the composable ERP philosophy allows IT decision-makers to plug different SaaS applications into their core system. For example, an organization can use Workday as its HR tool, implement Zoho for its sales organization’s customer relationship management software, and utilize SAP or Oracle’s core capabilities to meet the procurement department’s needs. By being flexible and responsive to the needs of each stakeholder — rather than using all the core features of an integrated ERP suite — your organization can be more agile and efficient.
Moreover, with a composable strategy, you can optimize your internal IT labor force by quickly responding to changes in demand and adjusting your team’s priorities accordingly. You also have the option to use an independent support partner, such as Rimini Street, to maintain specific components of your ERP stack. This gives your internal team the freedom to innovate at the edges while Rimini Street’s industry-leading ERP support keeps the core system up and running at a lower price point.
Composable ERP allows you to take back control
Of course, growth is a top priority for all companies. However, given the current climate of uncertainty, companies must safeguard their growth and profitability by fostering a culture of agility and flexibility. In this context, the advantages of a composable ERP strategy, which cultivates in its users an ever-evolving mindset, outweigh the benefits of a standalone, integrated ERP suite.
When you adopt a composable ERP strategy, you are taking back control of your organization’s ability to innovate and adapt — which is especially important in times of uncertainty. At Rimini Street, we believe in the benefits of a composable ERP strategy and understand that support for a composable ERP solution is quite different from what you may be used to with an integrated ERP suite. If you’d like to learn more about how Rimini Street approaches composable ERP support, please contact us today!
To learn more, visit us here.