Why CIOs must reimagine ERP as the enterprise’s composable backbone – cio.com

In my experience leading ERP modernization projects and collaborating with IT and business executives, I’ve learned that technology alone rarely determines success, but mindset and architecture do. Gartner reports, “By 2027, more than 70% of recently implemented ERP initiatives will fail to fully meet their original business case goals.” ERP success now requires a fundamentally different architecture.
For decades, ERP systems have been the core of enterprise operations: managing finance, supply chain, manufacturing, HR and more. The same systems that once promised control and integration are now stifling flexibility, slowing innovation and piling up technical debt.
From what I’ve observed across multiple ERP programs, the problem isn’t ERP itself, but rather, it’s how we’ve come to think about it. Many organizations still treat ERP purely as a system of record, missing the broader opportunity in front of them.
The next era of business agility will be defined by ERP as a composable platform: modular, data-centric, cloud-native and powered by AI. In many of the organizations I’ve worked with, technology leaders aren’t debating whether to modernize the core. Instead, they’re focused on how to do it without stalling the business.
Forbes captures the shift succinctly: “it is anticipated that 75% of global businesses will begin replacing traditional monolithic ERP systems with modular solutions — driven by the need for enhanced flexibility and scalability in business operations.” This highlights ERP’s evolution from monolithic legacy suites to an adaptive, innovation-driven platform.
Those who embrace this shift will make ERP an enabler of innovation. Those who don’t will watch their core systems become their biggest bottleneck and stay held back.
In the 1990s and 2000s, ERP meant one vendor, one codebase and one massive implementation project touching every corner of the business. Companies spent millions customizing software to fit every process nuance.
I saw the next chapter unfold with the cloud era. Companies such as SAP, Oracle, Microsoft and Infor transitioned their portfolios to SaaS, while a wave of startups emerged with modular, industry-focused ERP platforms. APIs and services finally promised a system that could evolve with the business.
In one transformation I supported, our biggest turning point came when we stopped treating ERP as a single implementation. We began decomposing capabilities into modules that business teams could own and evolve independently.
But for many enterprises, that promise never fully materialized. The issue isn’t the technology anymore, but the mindset. In many organizations, ERP is still viewed as a finished installation rather than a living platform meant to grow and adapt.
Legacy ERP thinking simply can’t keep up with today’s pace of change. The result is slower innovation, fragmented data and IT teams locked in perpetual catch-up mode. Organizations need architectures that change as fast as the business does.
LeanIX, citing Gartner research, highlights the advantage: “Organizations that have adopted a composable approach to IT are 80% faster in new-feature implementation, particularly when using what Gartner defines as composable ERP platforms,” demonstrating the performance gap between modular ERP and traditional monolithic systems.
I’ve seen legacy ERP thinking carry a high price tag in real projects:
The emerging composable ERP model breaks this monolith apart. Gartner defines it as an architecture where enterprise applications are assembled from modular building blocks, connected through APIs and unified by a data fabric.
As LeanIX explains, “Composable ERP, built on modular and interoperable components, allows organizations to respond faster to change by assembling capabilities as needed rather than relying on a rigid, monolithic suite,” illustrating the transition from static ERP systems to a dynamic, adaptable business platform.
Having worked on both sides — custom development and packaged ERP — I’ve learned that the real power of composability lies in how easily teams can assemble, not just integrate, capabilities. Rather than seeing ERP as a single suite, think of it as the system that enables how an enterprise operates. The core processes — finance, supply chain, manufacturing, HR — are what make up the base. Modular features such as AI forecasting, customer analytics and sustainability tracking can plug in dynamically as the business evolves.
This approach enables organizations to:
Traditional ERP treated every user the same, in which there would be one interface, hundreds of menus, endless forms. Composable ERP flips that script with persona-based design, built around what each role needs to accomplish.
From my experience, when ERP is designed around real personas rather than generic transactions, adoption rises and decisions happen faster.
These are not theoretical issues; they’re the practical challenges I see IT and business teams grappling with every day.
True success demands leadership that balances technical depth with organizational empathy.
Through years of ERP work and collaboration between business and IT teams, I’ve realized that the biggest hurdle to ERP success is the belief that ERP is a fixed system instead of a constantly evolving platform for innovation.
This shift isn’t about tools, but rather it’s about redefining the ERP’s role in the business. McKinsey reinforces this reality, stating, “Modernizing the ERP core is not just a technology upgrade — it is a business transformation that enables new capabilities across the enterprise.” It’s a shift that calls for a fundamentally different playbook, especially for CIOs leading modernization efforts.
Oracle reinforces this imperative: “Companies need to move toward a portfolio that is more adaptable to business change, with composable applications that can be assembled, reassembled and extended,” highlighting flexibility as a core selection criterion.
Reframe ERP as an innovation platform. Encourage experimentation with low-code workflows, analytics and AI copilots.
In a few years, we might not even use the term ERP. Like CRM’s evolution into customer experience platforms, ERP will fade into the background, becoming the invisible digital backbone of the enterprise.
I’ve watched ERP evolve from on-premises to cloud to AI-driven platforms. AI will soon handle transactions and workflows behind the scenes, while employees interact through conversational interfaces and embedded analytics. Instead of logging into systems, they’ll simply request outcomes — and the composable ERP fabric will dynamically orchestrate everything required to deliver them.
That future belongs to organizations rethinking ERP today. This isn’t just another upgrade cycle — it’s a redefinition of how enterprises operate.
ERP was once about efficiency — tracking inventory, closing books, enforcing process discipline. Today, it’s about resilience and innovation. From my own journey across multiple ERP programs, I’ve seen that the CIO’s challenge isn’t just keeping systems running, but also architecting agility into how the enterprise operates.
Composable ERP, which is built on cloud, AI and human-centered design, is the blueprint. It turns ERP from a system of record into a system of innovation that evolves as fast as the market around it.
The opportunity is clear: Lead the transformation or risk maintaining yesterday’s architecture while others design tomorrow’s enterprise.
This article is published as part of the Foundry Expert Contributor Network.
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Tirumala Rao Chimpiri is a senior programmer analyst at Stony Brook University. He’s an enterprise technology leader with more than 26 years of experience driving ERP modernization, digital transformation and business-process automation for Fortune 500 companies and global organizations across the banking, manufacturing, logistics and public-sector domains. He has led major ERP programs spanning finance and HR systems, delivering operational agility, improved security and measurable performance gains at scale.

Tirumala also serves as chair of the IEEE Computer Society’s Long Island section and is a Senior Member of IEEE and a Fellow of the Institution of Electronics and Telecommunication Engineers (IETE). He contributes to enterprise-technology governance and digital-innovation strategy through leadership roles with national and international technology organizations influencing the future of intelligent enterprise platforms.
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