ERP is the solution used worldwide, not just in Australia. Huge companies like Perth Mint, THE ICONIC, and Aristocrat have been using Dynamics 365 ERP for some time now. So, it is the need of businesses to keep operations smooth and simple.
But now, as the market demand is shifting, there is another type of ERP changing businesses. It is a composable ERP.
How do composable ERP solutions work for Australian businesses? Let’s find out.
What is Composable ERP?
Think of your ERP system like a LEGO set. It is composed of many small building blocks that can be assembled, disassembled, and altered as needed, rather than a single large block. A modular and adaptable system designed for change is the foundation of composable ERP.
Composable ERP, according to Gartner, is a flexible technology approach that enables companies to quickly create and modify their operational and administrative procedures and practices to comply with regulatory requirements and market shifts.
This implies that the company does not need to disassemble the entire system to select, mix, and swap out components.
In fact, businesses are now combining hyperautomation in ERP with composable architecture to drive efficiency, scalability, and agility without the limitations of rigid, traditional systems.
What Does “Composable ERP Architecture” Mean?
Composable ERP is built on the principle of flexibility and adaptability, breaking away from the limitations of traditional, monolithic systems. Instead of a one-size-fits-all approach, it focuses on modular building blocks that businesses can configure and evolve over time.
Its key characteristics include:
- Modularity Over Monolith: Composable ERP divides functionality into distinct, interoperable components (finance, inventory, sales, HR, supply chain, etc.) as opposed to a single, massive ERP that attempts to do everything.
- Tailored Composition: Companies only choose what they require at the appropriate time. It is possible to add or switch out modules over time without having to start over.
- Interoperability & Readiness: To guarantee that modules "plug in" consistently, platforms, cloud services, standard connectors, and APIs are used.
- Low-code/No-code Capabilities: Gives citizen developers or non-developers the tools they need to extend or configure functionality (such as workflows or UI changes) with little to no coding knowledge.
Composable ERP Architecture in Dynamics 365
Microsoft has made significant investments to ensure that Dynamics 365 is compatible with an ERP that can be disassembled.
Important characteristics and patterns include:
Modular Applications
- D365's modular apps (such as those for finance, supply chain management, customer service, and sales) allow businesses to customise them to suit their needs.
- Core modules can be added later (e.g., inventory optimisation, AI-driven workflow).
Dynamics 365 ERP Cloud
- Versions hosted entirely in the cloud lessen the strain on the infrastructure. Microsoft is in charge of updates, scalability, and uptime.
- The Dynamics 365 ERP cloud supports rapid module deployment and integration with Azure services, Power Platform, and other platforms. This aids composability.
AI in Dynamics 365 ERP Automation & Other Enhancements
AI and automation are being integrated into contemporary Dynamics 365 implementations to further enhance composability.
- AI in Dynamics 365 ERP Automation: Real-time dashboards, automated invoice processing, fraud and anomaly detection, and predictive demand forecasting. These aid in decision-making and lessen manual labor.
- Process Automation via Workflows, Bots, and Generative AI: Procure-to-pay and quote-to-cash processes can be automated with the help of D365 tools like Copilot.
ERP Blockchain Integration Benefits
You can selectively integrate cutting-edge technologies with a Dynamics 365 composable ERP. One example is blockchain.
- Transparency & Traceability Across Supply Chains: From the point of origin to the point of delivery, every transaction can be permanently documented. helpful for provenance and recalls, particularly in sectors like food and pharmaceuticals.
- Security & Identity Verification: Blockchain reduces fraud and helps validate transactions and identities.
- Reduced Disputes and Better Compliance/Audit Readiness: Due to the fact that blockchain can document a transaction history and chain of custody, making audits or regulatory requirements easier.
ERP Customisation Best Practices in a Composable Model
These procedures help maintain flexibility and reduce long-term costs. If you are an ERP consultant or a company using D365 implementation services, customise only what you require.
Best Practice | Description |
Define boundaries clearly | Identify the business functions that require customisation and those that are best served by standard functionality. Don’t alter core modules too much. |
Instead of making significant code changes, use Microsoft’s Power Platform, Power Automate, and Power Apps to create unique workflows or user interfaces. Reduced risk, quicker turnaround. | |
Avoid “deep insert” patching of core code | Upgrades may be challenging due to custom code inside core modules (Finance, SCM). Make use of APIs, connectors, and extension points. |
Ensure robust integration strategy | Modules will have to communicate with one another. To ensure data consistency, use Dataverse, dual-write, and standard connectors. |
Governance & change management | Who is responsible for testing and versioning, who owns a module, and who authorises changes? You need oversight when modules are added or changed. |
Scalability & performance testing | Make sure they function under anticipated load in Australian contexts, even if only parts are used (e.g. peak sales, seasonal variation). |
Security, compliance, localisation | Verify that all custom modules adhere to Australian privacy, accounting, and payroll laws. Take advantage of Microsoft’s worldwide compliance while testing for regional variations. |
Why Composable Architecture Beats Heavy Customisation
Self-executing agreements encoded into the blockchain are known as smart contracts.
When ERP modules are integrated, they can:
- Cost Savings: Fewer issues with upgrades and less technical debt. Deep coding for Dynamics 365 ERP customisation tends to lock you in. Pay for what you need with Composable.
- Faster Time to Value: You can launch core modules, observe early benefits, and then grow.
- Better Agility: Adjust to shifting consumer demands, supply chain problems, and natural disruptions.
- Future-proofing: Rather than rewriting monolithic systems, it is simpler to incorporate new technology (AI, blockchain, IoT) into modules.
Conclusion
Composable ERP Architecture is reshaping how businesses approach enterprise technology by offering flexibility, scalability, and lower costs. Instead of heavy customisation, companies can adopt a two-tier ERP approach, customising only what they need with Dynamics 365 implementation services.
This ensures smoother upgrades, faster value delivery, and adaptability to new technologies like AI and blockchain. At DHRP, we help businesses leverage Dynamics 365’s composable ERP capabilities to stay competitive, compliant, and future-ready.
Whether you’re streamlining finance, supply chain, or HR, our tailored implementation services support growth with minimal complexity and maximum agility.
FAQs
Composable ERP architecture uses modular building blocks, allowing businesses to scale, swap, and customise only required functions while ensuring flexibility and reduced costs.
Dynamics 365 composable ERP streamlines operations by enabling modular deployments, AI-driven automation, and integrations, giving businesses agility, scalability, and compliance across all departments.
Best practices include using low-code/no-code tools, avoiding core code patching, leveraging APIs, and focusing on scalable, compliant, and easily upgradable customisations.
