When should you take into account Composable Commerce?

What does the term "Composable Commerce" refer to?

In the dynamic landscape of modern business, enterprises must possess agility and the capacity to swiftly respond to evolving market circumstances. Composable commerce represents a strategy for accomplishing this adaptability, allowing businesses to handpick optimal commerce components and integrate them into a bespoke application designed to address distinct operational requirements. This is accomplished through the assembly of Packaged Business Capabilities (PBCs), pre-constructed, autonomous business functions that can be flexibly combined and reconfigured as the situation demands.

Through the adoption of composable commerce, enterprises can attain an e-commerce operation that is more agile and responsive, enabling them to keep pace with the rapid developments of the contemporary digital marketplace. For the purposes of this article, the following definition is used: "The act of integrating IT solutions from various providers, fostering organizational agility for swift adaptability."

In the realm of e-commerce, business and IT architecture have become inherently intertwined. Although marketers and salespeople have taken substantial strides towards embracing a more digital and data-centric work approach, a subset of them still holds reservations about engaging with IT architectures. This is regrettable, as this architecture ultimately governs not only the current appearance of your e-commerce establishment, but also the speed at which you can shape its future trajectory.

Composable Commerce facilitates business agility

The example provided by research and advisory firm Gartner revolves around Services Australia, an organization catering to health and social services for over 25 million Australian residents. In the effort to minimize the spread of the COVID-19 pandemic in 2020, Australia enforced lockdowns, elevating the significance of digital interactions. However, during the initial lockdown, the surge in online traffic led to a rapid crash of the Services Australia website.

Employing its composable framework, Services Australia promptly resolved the overload issue. To cope with the heightened demand, distinct IT applications were deployed and interconnected. Appointments that required physical presence were transitioned to telephonic or online (video) sessions, voice authentication technology was introduced for 1.2 million users, and the usage of the digital assistant soared by 600%. Thanks to the composable structure bridging IT and business functions, Services Australia adeptly extended a safety net to citizens in need during this critical period.

Composable Commerce facilitates the implementation of evolutionary architectures

Prominent e-commerce enterprises frequently have a history of creating their own IT solutions. In cases where the software becomes outdated, such as nearing the end of its lifecycle, the customary response has been to replace the entire system with a newer iteration. However, according to expert Rebecca Parsons, this traditional approach has evolved, and she now advocates for the notion of an "evolutionary architecture," as presented, for instance, in this discussion.

The concept behind evolutionary architecture involves the incremental enhancement of segments within your IT framework, fostering continuous growth. This approach closely aligns with the essence of composable e-commerce – the aim is to avoid rigid single IT solutions and instead construct a network of interlinked applications sourced from diverse providers. This multi-application approach is sometimes met with skepticism, as the average composable e-commerce establishment employs around 15 distinct applications. The concern often centers around potential confusion. Nevertheless, practical experience reveals that within an organization, each department typically employs only two or three distinct applications. This level of diversity is easily manageable for employees, especially when steps are taken to facilitate comprehensive data sharing across the entire organization.

Which types of organizations are well-suited for Composable Commerce?

Desiring an e-commerce environment that offers flexibility for continual growth alongside market trends leads to the question of whether it's preferable to construct your e-commerce setup or to conveniently procure specific components as needed. The answer depends on the prerequisites you define for your systems and their intricacy.

Within the nexus of business and IT, an evaluation of whether composable e-commerce is the optimal route becomes essential. While not an obligatory path, the consideration of composable e-commerce frequently proves beneficial. The build-versus-buy principle significantly influences this determination. Embracing a composable approach enables the acquisition of a broader range of readily available components from the market. This approach can yield cost savings, as it obviates the necessity of building everything from scratch (or employing only a fraction of an expensive monolithic system). Particularly for medium to large companies, this holds true, often due to the diverse spectrum of software solutions that are frequently required.

Of course, there are exceptions that validate the rule. Yet, upon scrutinizing larger organizations, it becomes evident that the composable paradigm has become indispensable. The complexity of their operations and e-commerce systems often renders constructing a proprietary solution cost-prohibitive. This is exacerbated by maintenance expenses and the ongoing scarcity of skilled developers. Thus, the rationale behind opting for a solution composed of "purchased" individual components from various providers becomes conspicuous. This approach is frequently not only more cost-effective but also more efficient, particularly for larger enterprises.

The importance of connectivity components for Composable Commerce

An essential aspect that warrants attention is that the effectiveness of composable e-commerce hinges on the interconnection of all its components. If the diverse suppliers do not factor in this aspect during their software development, the amalgamation of numerous distinct parts will prove impractical. However, when disparate developers consider one another and strive to ensure compatibility or even plug-and-play capabilities among solutions, the prospect of composable e-commerce emerging as the future becomes quite promising.