The composable organization: What it is, why it’s important and how to become one

The composable organization: What it is, why it’s important and how to become one

Anita Temple headshot
Anita Temple
Corporate Journalist, commercetools
Published 21 April 2023

No one had ever heard of composable commerce until June 2020 when a Gartner® report boldly predicted that organizations that adopted a composable approach by 2023 would outpace their competition by 80% in the speed of feature implementation.  

The composable organization: What it is, why it’s important and how to become one

Although the term was officially coined with the release of “Composable Commerce Must Be Adopted for the Future of Applications,” commercetools had already been applying its key principles — including MACH™ technologies — to create modern commerce solutions for major global brands. 

Looking back, Kelly Goetsch, the Chief Strategy Officer of commercetools acknowledges that before Gartner gave the technology approach a name, selling the concepts of microservices, APIs, cloud and headless to organizations that had long built traditional, monolithic systems was difficult. Today, however, everyone is talking about, and exploring, the approach which is based on leveraging interchangeable building blocks, aka a library of APIs or packaged business capabilities (PBCs) to “compose” a technology system that fits your exact needs.

What is key for organizations to remember, though, is that it’s not enough to just transition from a monolithic platform to a composable system. In order to fully capitalize on its benefits, it’s also necessary to transform the way your business operates — and that is how the concept of “the composable organization” became a critical part of the equation.

Here, Kelly offers up insights on what a composable organization is, why it matters and how to start your own business evolution.

Q: How did the concept of composable commerce evolve from a technology approach to an entire business philosophy that Gartner calls “The Composable Organization?”

A:  Well, I would attribute it to Conway's Law. In 1967, a computer programmer named Melvin Conway wrote a pretty influential paper in which he postulated that any technology designed for, or by, an organization, will end up mirroring its organizational structure. Conway didn’t place any positive or negative implications on his theory; it was just meant to describe the connection between the way teams are set up to work and communicate and the software it creates to support their operations. 

Old-school, traditional organizations have these big central technology teams in place that are split by functions. There’s a group of database people, a group of infrastructure people, a group of application people, etc. The result is they have horizontally tiered applications based on tech layers and these giant monoliths that are segregated by technology. 

At the time there was no such thing as the cloud or MACH. Now, these advances have given way to a new school of “composable” thought. In this scenario, organizations establish very small vertical teams that naturally deliver a very small application — a microservice. These teams become responsible for building a single specific function, such as a shopping cart. The team members go out to the public cloud and provision whatever infrastructure they need, write their shopping cart, and are responsible for that entire function. This small team is self-contained, and that is what makes it composable.

So, if you consider Conway’s Law, any organization looking to embrace the composable commerce approach as a way to build its technology, has to adopt composable thinking. It has to become the way they work and communicate. 

Q:  How do you define a composable organization?

A:  The composable organization is one with a mindset that encourages and embraces change. Its leaders are able to see opportunity instead of risk, applying the core principles of composability to compose both their teams and their technology. They set up small vertical teams that can be both autonomous and agile so they can focus on producing microservices that expose APIs that do one thing, and have one capability, packaged in the form of an API.  

Q:  Why is the idea of composability relevant in the context of modern technology?

A:  Organizations are slow to make big changes, and this is especially true for large companies that have been built around technology layers. These companies have been set up this way for decades and it’s worked well for them. For management to change things can be a huge risk. Think about a global medical device and pharmaceutical company, it could have over 10,000 applications to support. No one wants to be the person that screws things up.

Say you try to change something and it causes one of their prescription applications not to work properly and the company loses a billion dollars. The incentives are all aligned internally to not touch anything. But, what we’re [The MACH Alliance] finding is that organizations that make this fundamental transformation — become composable in their orientation and organize their technology and business around MACH principles — are able to take advantage of new opportunities and are able to pivot quickly. It’s becoming a strong differentiator.

Think about a company like Moderna — they were very new and small. They were able to very quickly build and bring a COVID-19 vaccine to market in a matter of months. On the other hand, there’s Pfizer, a very big, very slow company. They were delayed getting the vaccine to market and that hurt them. If you’re a company trying to make cash today, you need to be able to get things done fast, and the old-school way just can’t make it happen.

Q:  So is the reason startups can be so nimble because they don’t have old, rigid ways of working and communicating ingrained in their organizational structure?

A:  Yes. A new company would never start out by building a team to manage its networking tier. Today, that’s just a few checkboxes in AWS. It would never go out and build a data center, that stuff doesn’t happen anymore. 

There are many small, nimble companies out there, aided by technology that can credibly take down some of these big legacy players. And the way they’re doing it is by being very nimble, cloud-first and product-focused. They’re not stuck doing stupid stuff like three-year ERP implementations on the backend. They’re cloud-native from day one, and that makes a big difference in being able to get stuff done.

Q:  What are the first steps a company needs to take to evolve into a more composable organization?

A:  The first step is to identify a specific pressing customer-facing business problem. It could be promotions, product catalog or data, checkout, or any other granular problem the company is facing. Once it’s identified, the company can begin to build a composable solution around it. 

My guidance is always to start with something small and solve it really well. Once you do, you set the stage to incrementally become more composable. It’s not one day you’re a traditional company and the next day, you switch and become a composable organization. It’s not like that. It has to happen over time from a purely competitive standpoint.

Q:  How is commercetools supporting the evolution from composable commerce to the composable organization?

A: If you think about it, we've always supported the concept because we've been focused on creating and delivering individually consumable capabilities since we introduced headless commerce in 2013. I remember back in 2016 or 2017, I was in Berlin and I heard our solution architects talking about how you can consume each of our APIs individually. I asked, “Why don’t we market this?” At the time, they didn’t think it was worth discussing publicly. I pressed for it. I told Dirk [commercetools CEO], “This is amazing. We should be promoting this all day long.”

We’ve now built a portfolio that pairs really nicely with the whole concept. Everything we do very much supports the ethos. In a composable organization, you buy some capabilities, like your core components, from different vendors and one of those vendors is going to be us. Other capabilities, your differentiators, you build in-house. It’s that combination of build and buy that’s key to the whole approach. We were very purposeful in building an ecosystem of partners that fit into this composable world, and fundamentally, we play very well in it.

To learn more about how to put your business on track to a composable commerce future, download “Buy AND Build: A Blueprint for a Composable Commerce World.”

Anita Temple headshot
Anita Temple
Corporate Journalist, commercetools

Anita J. Temple is the Corporate Journalist at commercetools. She was a fashion editor at Women’s Wear Daily (WWD) and W Magazine before launching a career as a freelance writer and creative producer. She has written content and worked on a wide range of marketing projects for companies including Dreamworks, Walmart, Coca-Cola, Verizon, and Adidas.

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