Enterprise composability – the new strategic priority for 2024
Business closures in the UK overtook openings last year, for the first time in 12 years. Across the ocean, big chains in major US cities have also been following suit and shutting down stores. But even as some businesses succumb to high borrowing costs, rising energy and materials prices and weakening demand, others are standing tall amid a continuous flow of disruptions. So, what separates the organizations that are thriving from the ones that are simply surviving? Agility.
Whether it’s changing customer demands, supply chain disruptions, economic uncertainty or labor challenges, businesses that can change course quickly to adapt to these shifts are able to avoid becoming obsolete. To contend with all of this change, organizations must accelerate their digital transformation journeys. While legacy systems may have served businesses in a more predictable environment, the rigidity of their technology architecture means that they simply cannot keep up with the current pace of change. The new world order demands a composable enterprise architecture that can be reconfigured quickly—one that is flexible, adaptive, and efficient and speeds up time to market. This blog explores how and why businesses must lean on the concept of a composable enterprise to fuel pockets of innovation within their organization and boost agility, while minimizing risk and operational costs.
Ghosts of the Christmas past: Monolithic applications and technical debtOver the years, businesses have built up their legacy applications, middleware, and ERP systems. While they may have served well in the past, these ‘bolted-on’ applications often require significant resources to maintain. Given that these applications were designed to address the challenges of the past, they simply do render well to any form of innovation. Businesses tend to make the mistake of putting their digital transformation initiatives on the back burner as the process due to the perceived high costs of modernization or because of the sheer complexity of their technology environment. These monolithic applications often have been through one too many rounds of patch fixes and piecemeal changes, making them inflexible and difficult to change. Organizations that fixate on manual workarounds with additional tools to overcome the gaps in their legacy systems risk amassing ‘technical debt’. As your technical debt grows, business-critical processes may come to a standstill and your team may be stuck trying to figure out fixes for the mounting issues.
Infusing agility with composable technology and interoperability
The composable enterprise is the response to all mounting technical debt. With a ‘lego-like’ approach to technology, composability essentially allows organizations to assemble different, yet complementary business capabilities on top of a stable core that forms the functional foundation on top of which the various ‘building blocks’ can be stacked. From a technology perspective, this may include an API-first approach that integrates all the disparate systems to enable the seamless flow of real-time data, the Cloud for scalability, low-code/no-code automation solutions for faster innovation, front-end and business applications, and unified analytics platforms that power faster decision-making and sets the stage for AI-led predictive insights. Tying all this together would be a digital transformation strategy and governance framework that helps the business to remain flexible and adapt to changing market conditions faster.
In 2024, most businesses have made the strategic choice to invest in the right suite of technologies that form the building blocks of a composable enterprise. However, many still struggle with ‘interoperability’ which means they often find themselves stuck with a technology architecture composed of static, monolithic and standalone parts that don’t really ‘speak’ to each other. With two out of three companies losing opportunities (and money) due to poor interoperability among their applications, interoperability is definitely a cause for concern. On the flip side, companies with high interoperability grew revenue 6x faster than those with low interoperability. The key to success with a composable enterprise lies in the ability for each ‘building block’ to operate seamlessly with each other, even as each ‘block’ is configured and reconfigured on the go to meet evolving business needs.
How composability drives value for an enterpriseFrom a digital transformation perspective, composability creates value across multiple dimensions.
- Turning uncertainty into opportunity With a composable architecture, businesses can build agility into their strategy. The ability to configure and reconfigure the digital capabilities as they see fit and build the ‘ecosystem that best suits them’ means that businesses can now take a best-of-breed approach to their tools selection without being locked in by a particular vendor or a specific type of technology. This flexibility helps set up organizations for agility, innovation, and long-term resilience.
- Failing fast to win faster In an economic downturn, the first expense to be cut often tends to be innovation. While this may make sense in the short term, it can prove fatal for the business in the long run. The solution to this lies in a ‘fail fast’ mindset which grants organizations the allowance to experiment with innovation, embrace failure quickly, and apply learnings to realign their strategy. Unlike monolithic architecture, composability gives businesses the opportunity to take a modular approach to change, shorten development time and effort, and speed up delivery and innovation cycles.
- Scale without limitations The modular structure of a composable technology ecosystem means that businesses can swap up individual components and introduce new capabilities without having the changes affect the entire tech stack. This relatively low-risk approach helps organizations evolve in an incremental way without having to worry about dependencies and adapt to changing requirements faster.
The middle road: Re-use rather than re-haul
The idea that to fully realize the benefits of a composable enterprise, companies must completely overhaul their systems is a common misconception. The reality is that a step-by-step approach to composability makes sense for most businesses. A step-by-step approach, characterized by the gradual integration of composable architecture into an existing digital infrastructure, is often more suitable. Most businesses still run their core operations on legacy systems and while an upgrade might be on the cards, they may not have the bandwidth nor the resources to make the transition just yet. The advantage that composability brings is that businesses can leverage most of their existing infrastructure while adding-on innovative capabilities that can help them realize value faster. This kind of gradual push towards modernization is the pragmatic route for most companies. This kind of hybrid approach is not only less daunting but can also minimize disruption, while allowing businesses to leverage the benefits of a composable architecture. It also allows organizations to roll out innovations as multiple sprints for continuous business re-invention.
Navigating the challenges of a composable ecosystem
As organizations make the shift to a composable architecture, there are several considerations to keep in mind. The first and most important one is the need for a shift in mindset . Previously businesses focused on designing processes around an ERP that was built to last. However, with a composable enterprise, the new systems are built for change which requires businesses to be comfortable with taking on a certain level of risk. As you will be constantly looking to add on new functionalities and capabilities, there is increased complexity to contend with. This ties into the second factor – the prioritization of integration and interoperability. It is crucial that companies not only have the right data governance frameworks in place but also have the right skillsets to ensure that data flows seamlessly between the different components in your technology ecosystem.
Businesses can explore a diverse suite of technologies such as automation to ensure that data doesn’t simply flow between those applications, but is also translated into the same language, becoming both interpretable and interoperable, without requiring additional manual effort. Companies must also relook at their application support models to ensure that changes to the architecture are vetted regularly to minimize risk. With new emerging capabilities and technologies, such as low code/no code tools and AI, the technology landscape is only likely to become more complex. Working with a holistic enterprise solutions partner like Fortude can help set your business for continued performance and growth.