What is a Composable Commerce Enterprise and is it right for your organization?

Linda Bustos

August 19th, 2020

If you follow Gartner’s guidance on digital commerce, you may have heard about packaged business capabilities and their role in the composable enterprise. The analyst firm predicts “by 2023, organizations that have adopted a composable approach will outpace competition by 80% in the speed of new feature implementation.”

Many organizations are struggling to achieve digital transformation because they’re still locked into rigid, monolithic technology. These legacy applications can’t support the modern requirements of the business, are drowning in technical debt, and prevent IT and business agility.

The composable enterprise represents an organizational shift away from large, monolithic applications towards API-driven, modular components that represent discrete business capabilities. These modular components (often referred to as microservices, or packaged business capabilities) can be composed into applications tailored to specific business requirements, and integrated with other applications across the enterprise.

Why Composable Commerce is considered the “future of applications”

Gartner predicts “by 2024, 30% of digital commerce organizations will use packaged business capabilities (PBCs) to construct their application experiences.” Adopting modular architecture with well-defined APIs has many benefits, including enhanced flexibility and agility.

Innovation at speed

Composable applications allow business logic to be configured within the API layer, not in backend code itself. Unlike monoliths where new code must be regression tested across the entire application, and a small change to one component can introduce bugs that affect everything, loosely coupled services are far easier (and faster) to configure, with updates published across touchpoints and integrations seamlessly. Likewise, changes can be rolled back just as easily. Unified logic across touchpoints eliminates siloes and duplication of development effort.

Always best-of-breed

A curated composition of packaged business capabilities and microservices allows an organization to pick and choose the best tools for today, with the flexibility to swap in and out components as needed. A mix of built and bought services can all play nicely together in a composable environment, ensuring the solution is always modern and future-proof.

Supporting complexity

Flexibility and agility are required to support complex business models that span markets, channels and blur the lines between B2B and B2C. It’s also essential if you want to bring commerce out of the website and into mobile applications, in-store digital, voice commerce, AR and VR or support contactless transactions like machine-to-machine transactions and other IoT use cases.

Composable commerce requires digital maturity

Many sources define digital maturity as the ability to respond to technical innovations and changes in the marketplace. But what are the key characteristics of digital maturity with respect to composable commerce?

Business transformation is the North Star, not solving operational pain

Digitally mature companies map technology investment to long-term vision, not short-term operations. They think about business outcomes, not just implementation when procuring technology, and leverage cross-functional input in their decisions. IT is not seen as a cost center, but a strategic driver of business transformation.

Appetite for innovation

Early adopters are always innovators, digitally mature organizations have a ferocious appetite for differentiation -- off-the-shelf will never do. Organizational culture is comfortable with some degree of risk taking, knowing it’s part of a commitment to digital progress. That said, the beauty of composability is it mitigates risk. Rather than incur more and more technical debt and risk breaking an already fragile application, API-driven services can be hooked and unhooked from new experiences and touchpoints with far less friction.

Skilled technical teams

Highly skilled developers love their stacks and frameworks. They’re passionate about modern methodologies and want their hands on what’s new and what’s next. They often can deliver innovative projects alone or in very small teams.

Strong governance

Adopting and managing a diverse portfolio of applications and APIs requires strong governance across the IT organization. Gartner predicts by 2023, 30% of commerce organizations will require an API product manager role (which essentially equates to every organization that becomes a composable enterprise).

Strong IT vision and leadership

A study by MIT found more digitally mature organizations typically center around a single IT visionary with strong leadership. Such a leader empowers a skilled technical team and supports cross-functional collaboration. Greenfield projects are encouraged and supported.

Business and IT alliance

Cross-functional collaboration is the cornerstone of digital maturity. MIT found mature organizations are much more likely to leverage cross-functional teams for IT projects (44%) than early-stage or immature groups (16%). Giving Business a voice enables solutions that improve business outcomes and support multiple business groups without siloed applications or experiences.

If you’re ready to become a Composable Commerce Enterprise...

Maturing is a process. No matter where you are on the digital maturity spectrum, the emerging opportunity to embrace composability and become a Composable Commerce Enterprise is a natural step for organizations who want to remain progressive and “ahead of the pack.” Soon, composability will be table stakes to keep pace. Gartner predicts 30% of organizations will be composable by 2023. But if you’re an early adopter and believe you’re ready to embark on a composable journey today, you must do the following:

1. Reject any new monolithic solutions proposed by vendors or in-house developers and plan only for composable applications (says Gartner)

2. Determine what first steps (beyond “going headless) you’ll take towards modularity. Will you fully migrate to a Composable Commerce-as-a-Service solution or take a “strangler” approach to replacing your monolith?

3. Determine your ideal mix of “build” and “buy” when it comes to microservices and packaged business capabilities, and know what to ask composable vendors 

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Linda Bustos

Linda is an ecommerce industry analyst and consultant specializing in conversion optimization and digital transformation.