Composable ERP: The future of enterprise management

Composable erp blog mxm 01

ByFirst Name, CEO and President of MXM Sistemas S/A.

Use one ERP software it is vital for any organization, as the departments are connected and with their operation taking place in an integrated system. It is an indispensable solution for the control of processes and centralization of data, so that decision-making is carried out with more speed and assertiveness by managers.

Like any product, ERP also needs to evolve to meet new market demands and companies need to be aware, evaluating whether their solution they use is up to date and providing the necessary operational gains to maintain its market competitiveness.

Due to the resources available in the past, the tendency was to hire monolithic solutions, where the ERP had to have all the modules desired by the company. ERP had a complex operating model, which was expensive and time-consuming to implement and, worst of all, its evolution was very difficult, causing a great impact on organizations due to the high level of customization.

The concept was that the software had to conform to the company's operating model, not the other way around. However, that has changed. Nowadays, executives understand that it is more appropriate to adapt to the system than to customize the product, as new integration tools have emerged, more agile and modern systems, and Internet access has increased exponentially, which has consolidated the concept of Datacenters.

As in medicine, where we have Cardiologists, Orthopedists and other specialists complementing the work of the General Practitioner, we have software companies specializing in WMS, CRM, HR and Folha. In other words, corporations no longer need to do all their treatment with the “General Practitioner”, and can have their needs met by the “best doctor in each area”. This model allows each department to use the best solution for its needs and evolve as new offers emerge, without the need for a radical change.

We evolved from the plastered ERP model to the flexible ERP based on the needs of institutions. The pandemic made the implementation of this concept urgent, requiring technology to be integrated into the employee's routine in home-office, maintaining secure connections between sectors. This challenge represents a milestone for companies and raised the following questions: “What is the ERP that my company needs today?” and “Am I updated for this new reality?”

The concept of "Composable ERP” was introduced by Gartner as a trend for management software and I have commented a lot on this subject in my lectures. This term refers to a strategy in which the technology is fully adjusted to the business, and its structure is defined according to the company's needs.

Another very important aspect is to add intelligence to the ERP, however, the concept of the monolithic ERP generated a great delay in this stage. Today we see intelligent applications that anticipate our needs, but the stagnant ERP is entirely dependent on users to carry out the processes.

In my view, the obligation of the new ERP is: (i) to guarantee management, that is, to implement operational rules so that the processes take place based on the company's rules. Compliance is the watchword, especially for businesses seeking growth and IPO; (ii) be operationally agile, ensuring productivity and easy training; (iii) have a friendly interface, so that executives can also use the ERP independently to access information; (iv) have built-in intelligence and proactiveness, ensuring compliance in the execution of processes; (v) meet not only the demands of administrative management, but also integrate the document, BI (Business Intelligence) and knowledge databases; (vi) have a high technological level and not a “makeup to operate on the Internet”, with the indispensable security devices; (vii) effectively use the databases with referential integrity, without allowing intervention in the product code.

These are the minimum features that should be charged for a current ERP. we are talking about a ERP that gives each company something unique, aligned with the organization's culture and values. It is software that tracks changes over time, whether in business expansion, implementation of improvements or complementing activities.

We left the paradigm where organizations needed to have a monolithic ERP and moved to the reality where ERP has integrated applications, which can be combined or recombined, to deliver speed and efficiency to business management.

The market wants high-tech, versatile and appropriate solutions for the new corporate scenario. According to a Gartner report, by 2023, 65% of global organizations will use ERPs that have Artificial Intelligence, Machine Learning, Internet of Things and Cloud Computing, and according to the research rapporteur, Nisha Bhandare, “The need to create, manage and understand data is paramount in the fourth era of ERP”.

What Nisha calls the “fourth era of ERP” has everything to do with what I have been expressing to the market: technology needs to meet this demand and offer data-oriented software that performs automated tasks, helps in the performance and agility of tasks, making updates and support more flexible, in addition to, and above all, making life easier for managers who need real-time information for decision-making in organizations, in a personalized way and in the cloud.

Faced with these new possibilities, the Composable ERP is essential for companies looking to stand out from the competition. For the adoption of this technology to be carried out successfully, the integration between the CTO and his team is essential. In addition, the other C-levels must map and develop a new architecture in accordance with the business profile and goals. This construction needs to be oriented to improve the performance of activities and the Composable ERPs are capable of boosting the results of any company.

In this fourth era of ERP, suppliers need to deliver faster, more adaptable and personalized solutions according to the needs of each customer. After all, these tools will be increasingly present in corporate daily life and, I repeat, with a high level of functional and technological security.

Technology changes and improves to adapt to new demands and provide productivity increase, and this is our obligation. We meet this demand through simple, intuitive and flexible management software that speaks to the reality of each corporation.

Photos: Composable ERP: The Future of Enterprise Management | Channel360º


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