The concept of language as a system of systems is from an article by the same title, "Language as a System of Systems," by Mulder and Hervey (1975). Their work is taken from the previous work of Mulder who defined language as a "functional ordering of constituents" (Mulder & Hervey ref. Mulder (1966)). Mulder and Hervey define the "constituent," or component, systems within the large system of language. As they say in their Abstract, they explore:
subclassification of the genus language into species.
To clarify, let's enumerate some of these systems (synonymous with "subclassification" and "species"). To illustrate, the large system of language contains the subsystem of phonemes (units of sound that also distinguish changes in meaning) and the subsystem of grammar (order by which lexical and syntactical units of meaning are joined together).
To further illustrate, the subsystem of phonemes has within it the smaller system of minimal pairs (two words differing in meaning by a change to only one phoneme: sip and tip changed by /s/ and /t/). The subsystem of grammar has, for example, within it the smaller system of morphology (word construction) and the smaller system of syntax (sentence formation from syntactical groups of words). Then, the smaller system of syntax has within it the systems of phrases and clauses. Each of these nested internal systems is called a subsystem of the system containing it: for example phrases are a subsystem of syntax while syntax is a subsystem of grammar while grammar is a subsystem of language, which is a system itself and, therefore, a system of systems: language is a system that contains subsystems that themselves contain subsystems within them.
Source: "Language as a System of Systems." J.W.F. Mulder and S.G.J. Hervey. La Linguistique. Vol. II, FASC. 2/1975.