00:08
Krista: Eric, across the organizations that you see and advise, what signals are you seeing that the traditional monolithic ERP model is giving way to something much more modular and composable?
00:23
Eric K: Well, the first signal that we’re seeing is that first of all, there’s more options. Companies now don’t have primarily just monolithic ERP systems to choose from. They also have composable ERP best breed solutions.
00:41
Eric K: They have interoperability types of software from Palantir and Snowflake and some other providers. And then you also have this movement towards platform as a service, where companies such as Salesforce are providing platforms that integrate systems and allow you to build third party applications on top.
01:01
Eric K: So all the signs are pointing towards composable ERP in terms of market competition and fragmentation. But I would argue the even bigger factor is the big push to cloud. ERP systems moving to the cloud are becoming even less flexible than they were on premise.
01:23
Eric K: As inflexible as ERP systems used to be, at least you could customize the software. Now with cloud and multi‑tenant SaaS solutions, flexibility is even more limited. That need for flexibility combined with more available options is pushing organizations toward composable ERP.
01:44
Eric H: I think the biggest signal here is that we’re already seeing it happen. People are pulling out modules like HR and moving to Workday, or CRM and moving to Salesforce. Organizations are choosing best fit solutions because they produce better outcomes at better cost.
02:07
Eric H: And just like Eric said, it’s because of the number of options available. Ten years ago, you were either Oracle, SAP, IBM, or Microsoft. Today, you can add instant functionality with a credit card, and that changes everything.
02:25
Krista: IDC research shows most organizations believe their ERP‑based systems will remain valuable far longer than vendors admit. Why do you think enterprises are leaning toward extending ERP life rather than replacing it?
02:41
Eric H: You only need to look at cloud failed implementations to see why. There are countless examples of large reimplementations getting stuck, abandoned, or going massively over budget. That level of disruption and risk is no longer acceptable.
03:04
Eric H: Organizations can’t wait five years to start innovating. They need to innovate today. That’s why we’re seeing companies push back on vendor‑dictated approaches and look for faster paths to value.
03:28
Eric K: You also have to look at the economics. Vendors are not making money on legacy software anymore. The only way to reignite revenue is to move customers to cloud subscriptions that never stop billing.
03:55
Eric K: From the customer’s perspective, they’re looking at fully depreciated assets that work just fine. Replacing those with never‑ending OPEX costs is very difficult to justify. That conflict of interest is driving a lot of pushback.
04:29
Eric: Third‑party support gives customers a way to control that landscape beyond vendor deadlines. Software doesn’t wear out the way hardware does. If it’s working today, there are usually better ways to spend money.
05:00
Krista: We’re seeing organizations add automation, orchestration, and UX around ERP. What’s driving this shift?
05:14
Eric K: A lot of leaders have seen ERP migrations fail or struggle firsthand. Most aren’t eager to start another massive project. At the same time, emerging technologies can deliver immediate value without years of disruption.
05:46
Eric K: The question becomes why commit to a risky, expensive project just to maybe use AI someday. Many are choosing faster paths to value instead.
06:04
Eric: CIO aspirations haven’t changed, but their thinking has. Lift‑and‑shift to cloud often just moves you from version X to version Y. You still need automation and orchestration afterward.
06:33
Eric: The value is in the ERP data, not the version. If you already have the data, you already have what you need to get started. That realization is changing decisions.
07:00
Krista: Let’s talk about time and risk. How does this new approach compare to big‑bang vendor migrations?
07:12
Eric K: Typical ERP projects take years just to replace what you already have. Vendors sell the idea that you need a new platform to get innovation, but that’s often fear‑based selling designed to drive recurring revenue.
08:03
Eric K: Customers are getting smarter and questioning why they should reinvest after just finishing the last implementation. That’s where composable approaches change the equation.
08:28
Eric H: Vendors are stuck in compiled code while the world has moved to low‑code and no‑code. That’s why upgrades take so long and why customizations disappear in cloud platforms.
09:13
Eric H: When organizations realize they can get outcomes in months instead of years, that becomes the obvious choice.
09:21
Krista: What about risk? How do we compare the risks of both paths?
09:30
Eric K: There’s risk in both options. Staying on legacy systems does carry long‑term risk, but that risk is dramatically overstated for the near term. The risk of moving to a new ERP is often far higher.
10:00
Eric K: ERP migrations are more costly, resource‑intensive, and disruptive. For many organizations, being deliberate and surgical with technology is far safer than big‑bang replacement.
10:49
Krista: Eric, how do composable architectures help minimize risk?
11:05
Eric H: Whoever owns the license holds the power. Retaining license ownership is the first way to mitigate risk. Composable architectures allow modular changes instead of ripping out everything.
11:29
Eric H: If one module stops working, you replace just that piece. It’s like changing a flat tire instead of buying a new car. That’s how you design for long‑term resilience.
12:09
Krista: How does this connect to AI?
12:13
Eric H: AI works best when layered on top of known ERP processes. We approach AI one use case at a time, proving ROI before expanding further.
12:52
Eric H: Each successful use case funds the next one. If something doesn’t deliver value, you stop. That’s how risk stays controlled.
13:37
Krista: What kind of AI use cases are enterprises actually implementing today?
14:00
Eric K: Many clients are choosing AI‑first strategies instead of ERP‑first. They keep stable ERP systems and add AI tools like ServiceNow, Palantir, or Snowflake to extract more value.
14:41
Eric K: This allows them to innovate without breaking what already works. They get more out of decades of investment instead of starting from scratch.
15:12
Eric: We’ve implemented AI use cases across onboarding, logistics, and warehouse optimization. In one case, onboarding time dropped from two weeks to half a day.
16:28
Eric: The key is one use case at a time. You validate success before scaling. That’s why the boil‑the‑ocean approach doesn’t work.
16:49
Krista: What separates successful AI programs from those that struggle?
17:01
Eric K: Successful organizations start small. AI is still maturing. There’s no need to jump in all at once.
17:25
Eric K: Smaller use cases reduce risk. Once maturity grows, scaling becomes easier.
18:28
Eric H: Measuring ROI is critical. Speed improvements mean nothing if financial return isn’t there. You must measure the right things.
19:25
Krista: Looking ahead, what does ERP become in a composable future?
20:01
Eric H: ERP will decompose into individual business processes connected by AI and a data fabric. Users will interact through intelligent dashboards, not ERP logins.
21:45
Eric H: IT will change plumbing underneath without disruption. Leverage stays with the customer.
22:05
Eric K: ERP will remain strong as a system of record, but not innovation. Combining stability with flexible layers delivers the best outcome.
22:47
Krista: To wrap up, can you share a simple modernization playbook?
23:02
Eric H: Challenge traditional thinking. Ask why before upgrading. If value exists, explore lower‑cost ways to achieve it.
24:11
Eric H: Many perceived risks are already solved. Challenge fear‑based arguments.
24:16
Eric K: Anchor decisions to strategy, not technology. The right answer will differ by organization.
25:06
Eric H: CIOs must rebalance spend away from keeping the lights on toward innovation. If a project doesn’t help move the ratio, don’t approve it.
25:50
Krista: Thank you both. From what we’ve discussed today, the future with Agentic AI and composable architecture presents enormous opportunity. Thank you to everyone who joined us, and please stay in touch.
