"Combine the right parts of existing applications..."
What this means is that if your business requirements span across multiple systems or departments or functions, you'll most probably need to offer the business users an application that provides a consistent user interface and experience allowing for such end-to-end business processes to happen.
"...to initiate new business practices..."
It also means that old business practices are being served with software solutions that work and the goal here is not to replace them. It's about new business practices also known as innovative business processes. Those ones are more difficult to software enable being they're very unique to each organization and they're subject to changes and have been traditionally very manual/paper intensive or on a more simple note their implementations by business package vendors were too complex.
"...without having to start from scratch"
The goal here is to leverage as much as possible from existing investments and tap into data and business logic that exist within the enterprise in order to service new business practices. There comes a time where even a top-notch application like R/3 reaches its limits and cannot address all possible business requirements. Same is true with any third-party or custom-built solutions. The composition aspects of building an application consuming services versus coding it is key to the value of a composite application.
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