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Today's business processes place high demands on the flexibility and scalability of the underlying ERP systems. Modern IT architectures, such as event-driven microservices environments, provide an excellent foundation for future-proofing these business processes. To fully exploit the potential of new ERP systems such as S/4HANA, companies should constantly examine their existing IT landscape.

ERP systems form the backbone for a wide range of business-critical applications. The integration of add-ons/modules for different areas such as accounting, procurement or logistics has led to the situation of more and more application logic and enhancement built into the systems, which have thus developed into ever larger and more complex software monoliths.

This increases complexity and makes it more and more expensive to maintain, evolve and scale the systems. Instead of releasing innovations into individual modules, the entire system with all its dependencies has to be carefully examined and adapted. This slows down the pace of development and increases the system's susceptibility to failure. A modern, microservice-based IT architecture is the key to overcoming these weaknesses and making the ERP system future-proof.

Microservices and event-driven architectures

Microservice-based architectures break down complex application logic into smaller, modular components that can be deployed and operated independently. Instead of a monolithic ERP system with a multitude of add-ons connected to it and all the logic housed in it, each service is mapped to an independent, less complex component. The result is an architecture of loosely coupled microservices that interact through technology-agnostic interfaces and are interchangeable.

Smooth operation of the various components depends not only on the design of the services, but also on how they communicate with each other. Many modern microservices environments are based on an event-driven architecture (EDA).  This architecture uses events to communicate between services.

For this purpose, a pool of topics is created - for example, all transactions related to the order process - for which different events can be defined. Events are events in the sense of a change of state or an update, e.g. an item is placed in the shopping cart. Each of these events is received from an event provider, in this case the webshop, via the router, which filters the events and forwards them to the consumer, e.g. the ERP system. Provider and consumer services are decoupled so that they can be scaled, updated, and deployed independently. This enables standardized information flow and real-time communication between the different components, even across enterprise boundaries.

Benefits of event-driven microservices architectures

An event-driven microservices architecture offers several advantages over traditional, monolithic ERP systems:

• High flexibility / good updateability
  Microservices operate as independent, interoperable service components. This means that individual components can be flexibly exchanged and replaced in line with a best-of-breed approach without jeopardizing the stability of the overall system.

• Enhanced Scalability
  Scaling monolithic ERP applications is always complex because it affects every component in the system. In contrast, microservices-based environments can scale individual components as needed.

• Continuous Deployment
  Because of their decoupled structure, microservices allow multiple services to be developed simultaneously and deployed independently in a DevOps/continuous delivery fashion without the need for a full system release.

• Faster response times
  An event-driven microservices architecture allows communication and action to occur in real time, dramatically increasing the speed of information within business processes compared to traditional architectures.

• Higher Performance
  Topic-based database management, as found in event-driven architectures, is superior to relational databases for processing large amounts of data, making it the optimal foundation for advanced data analytics or AI applications.

Microservice-based architecture in the Life Science industry

In the chemical and pharmaceutical industry, with its complex supply chains and demanding logistics processes, microservice-based ERP systems offer significant speed and efficiency advantages over legacy, monolithic ERP environments. For example, in complex end-to-end supply chains with multiple internal and external partners, event-based architectures can ensure standardized, real-time information exchange for all participants by connecting their respective software systems through interfaces to the microservice-based architecture of the customer's ERP system.

Centralized API Management

To unlock the potential of modern IT landscapes, organizations must first develop a clear vision of the future architecture. The first step is to define the relevant services and components in a technically meaningful way. The challenge is to find the right balance between high flexibility through independent services on the one hand and high complexity through too many overlapping individual applications on the other.

In addition to tailoring microservices, managing and orchestrating the various microservices is critical to a functioning microservices-based architecture. Centralized API management plays an important role here. This is because a large number of interfaces are used to allow the different microservices to interact seamlessly. An API management platform provides a central place to collect and document these APIs, making it easier to bring new developers on board. A centralized API management platform provides the tools, control, and visibility to scale microservices through APIs for new developers and connect them to new systems.  This allows APIs to be deployed and (re)used across the organization (and beyond).

Re-Evaluation of your IT Landscape as Part of S/4HANA Migration

There is currently a window of opportunity for companies that are thinking about transforming their IT landscape to a microservices-based architecture. In the course of the S/4HANA migration that many companies are currently facing, the revision of the existing IT landscape is worthwhile in two respects: On the one hand, because the migration to a new ERP system in microservice-based architectures is usually much less complicated than in conventional monolithic ERP landscapes due to the leaner application landscape. On the other hand, the analysis of the existing business processes in the run-up to the migration project usually reveals the first inefficiencies and process breaks, which can serve as a starting point for optimizing the existing IT landscape. For example, business process mining can be used to identify errors and bottlenecks in existing processes and to derive possible solutions at the architecture level. For example, automating certain workflows, improving the real-time flow of information, or replacing individual software components.

Conclusion

Analysts currently predict that the market for microservices architectures in the pharmaceutical and life sciences environment will grow by more than 20 percent per year over the next few years.  The main drivers of this rapid development are likely to be the increasing demands for flexibility and scalability of business processes and the software systems behind them. The more dynamic the business environment, the more important it is for companies to be able to continuously adapt their IT landscape to changing conditions and to quickly and flexibly replace individual applications as required in line with a best-of-breed approach. Modern microservice architectures support this flexibility and scalability and are therefore an important lever for more efficient and future-proof business processes.