Composable ERP? Inconceivable!!

After a decade or so of technology marketing folks touting “digital disruption”, like the proverbial bus, all the disruptions seemed to have arrived at the same time.

War, a global pandemic, an energy crisis, and the very real impact of climate change have disrupted supply chains, shuttered stores, kept employees at home and irreparably changed how many of us live our lives.

Now if a new market opportunity arrives and an existing one collapses, a business needs to pivot and respond. For a while, the word ‘pivot’ became every marketer’s favourite and was mentioned more times in the average presentation than Ross Geller instructing ‘friends’ how to get a sofa up a staircase.

The latest buzz word du jour is ‘composable’. There is composable business, composable thinking, composable architecture and even composable ERP. Each time someone mentions ‘composable’ the voice of Inigo Montoya from Rob Reiner’s masterpiece “The Princess Bride” rings in my head:

“You keep using that word. I do not think it means what you think it means.”

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Composable explained

‘Compose’ means to assemble into a cohesive and productive whole. It is often used with art, literature, and music.

The good folks at Gartner created the term ‘Composable Business’. They describe it as “A specific and accelerated form of digital business”[1]

‘Re-composable business’ is more apropos as it is the how you re-compose your business to address new opportunities and challenges that is important.

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Composable ERP follows the same principles as composable business. The “pieces” being composed aren’t just technology, but also ways of thinking, ways of doing business (i.e., business processes), ways of differentiating and ways of standardizing. One of the biggest mistakes made is to only consider the technology. Business transformation as a service is much more than just cool tech.

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Contrary to popular opinion, change is not the problem.

Technology changes, business changes and people change. The problem is that they do it at different rates and are rarely aligned. Even when two are in sync, without the third the outcomes are unsatisfactory.

When the pace of business disruption was much slower than it is today, it was possible to muddle along until things gradually got back in sync. There are very few businesses that can survive this way now.

Composable ERP aims to bring people, technology, and business outcomes together. It requires composable thinking, composable business architecture and composable technology all working together.

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Always start with composable thinking

No good blog post or presentation can exist without a quote from Steve Jobs or that one about the most adaptable to change surviving that Darwin never said. Here is a good one from the man in the black turtleneck:

“You have got to start with the customer experience and work backwards to the technology. You can’t start with the technology and try to figure out where to sell it.” — Steve Jobs

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“What does a day in the life of a customer, employee, partner, supplier look like 5 years from now? Where is our industry going? Where are our industry’s boundaries? Are there any? How do we differentiate ourselves to our future customers and prospects? “

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Once you’ve got these answers in place you can see what business architecture is needed.

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Composable business architecture concerns how your organization is structured, your workforce is empowered and engaged, and how you execute your strategy. These elements must work in concert. Rigid long-term strategies, siloed product teams and inflexible org structures will always hamper the realization of benefits that modern ERP can provide.

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There are business capabilities that every company has to do, regardless of industry or geography. A company needs to do them well, but they don’t provide differentiation to customers. e.g compliance, buying indirect materials, paying employees, managing the general ledger etc. These are the solid foundation upon which you can differentiate and innovate. Breaking down these capabilities into mini or microservices is rarely, if ever, beneficial.

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Some business capabilities can be differentiating to your customers. e.g ?smart logistics to streamline delivery, adaptive pricing that attracts new customers, business networks that you maximise the power of your supply chain while minimising the environmental impact.

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Composable ERP enables a business to adapt (pivot if you’d like) as needed. It provides a modular set of business capabilities, underpinned by a platform providing integration, extensibility, data, automation and analytics.

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Technology by itself is not enough. Applying composable technology to monolithic thinking - now that would be inconceivable.

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#sap #saps4hana #erp #sapteched #composable

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To learn more, please attend these sessions at SAP TechEd on November 15th and 16th, and download a paper on why top performing companies are choosing cloud ERP to drive innovation and agility.

Stefan Batzdorf Jan Gilg Eric van Rossum

[1] Top 2022 Tech Provider Trend: Composable Business

Published 31 January 2022 - ID G00763332 www.gartner.com