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Composable Commerce

What Does It Take To Build a Composable Organization?

Jul 04, 2022

If you’re thinking about a composable commerce project, you’re probably focused on what your new technology needs will be. But putting technology first is actually the wrong approach.

Successful composable commerce starts with your organization. Get that right and you’ll be in a good position for realizing a composable approach to modern commerce.

But what does it take to build a composable organization?

Move Away from Being a Technology-Based Organization

The first step to becoming a composable organization is to rethink the way your structure your business.

Many legacy companies are organized around technology. This means you may have a big team of developers that looks after your infrastructure, another that does the frontend, another for the backend, and so on.

The downside of this approach is that to make changes you have to send tickets between teams which creates a slow workflow process.

For example, let’s say your commerce business wanted to start capturing your customer’s birth date. You would have to send tickets to your database team, your backend team, and your frontend team so that they can each make the necessary changes in their part of the system. In addition, each of those teams will have its own work cycle. All of this means that something as simple as adding a way to capture your customer’s birth date is a long-drawn-out, involved process.

To achieve the same thing in a composable organization, you would go directly to the team that owns the customer profile, which would be made up of all of the expertise that you need to make that change immediately.

One thing to consider is that different parts of your business may benefit from a different organization structure. A good way to think about this is Gartner’s bimodal IT framework, which splits IT operations into two modes (Mode 1 and Mode 2).

The Mode 1 parts of your business are your core back-office services. It makes sense to take a traditional organizational approach here because the pace of change is slow, and you can optimize for cost savings and stability. For example, you wouldn’t want to make changes to your payroll system on the fly in case people didn’t get paid.

By comparison, the Mode 2 parts are the things the consumer engages with such as your website, app, social media, etc. A composable approach of small, focused, cross-function teams is a better fit here as you should be organizing around the aims of growing top-line revenue and reducing time to market. As such, these teams need the ability to rapidly iterate and innovate.

This framework means you would have two different organizational approaches, which require a significant change in your thinking.

The first step to becoming a composable organization is to rethink the way your structure your business.

Change Your Operational Mindset

The biggest challenge for most businesses wanting to create a composable organization is mindset.

A lot of companies have a mindset that is focused on saving as much money as possible each day. This means that they struggle with the idea of working with the different vendors within their composable commerce platform as in the past they would have gone to a single vendor for everything. They may think they are saving money by writing one big cheque to a single vendor rather than multiple smaller cheques. Yet, a composable approach is typically cheaper in the medium to long-term.

Another big mindset shift for your organization is taking on ownership of the functionality your composable commerce platform needs. Historically businesses would buy a big platform and use all of the functionality it offered. With composable commerce many businesses buy the foundation platform, choose APIs from different vendors and build their own extensions and custom microservices. This needs to be supported by a different organizational structure and workflows.

The biggest challenge for most businesses wanting to create a composable organization is the mindset.

Prioritize Speed and Ownership

One of the benefits of becoming a composable organization is the opportunity to work in smarter ways.

It’s well-known that innovation requires iteration. In many cases, it can take several iterations of a feature in order to perfect it and start generating revenue from it. If you currently only release new features to production once a quarter, this means its could take you a year to get to the point of generating revenue. In today’s rapidly changing market, a year might as well be the same as five or 10 years. If you can’t speed up your time to market then a feature may be outdated before you ever get to make money with it.

In order to become a composable organization, you need to start orienting your operations around how quickly you can bring developments to production. This includes optimizing your teams, automating integration testing as much as possible, creating incentives around time to market with as few errors as possible, and so on.

Another benefit of creating a composable organization is the ability to enhance the creativity and motivation of your teams. In our earlier example of a legacy organization of large teams dealing with tickets all day long, a single developer may be working within a team of 100 plus people. They are essentially a cog in the machine.

Whereas, a composable organization will have much smaller teams that each own a specific feature or API, such as pricing or promotions. This gives your developers pride of ownership in their work because they are responsible for building the feature they work on. They design it, architect it, write it, implement it and maintain it.

As a result, they care more about doing a good job because everyone can see the value of their individual work.

Start Small with Composable Thinking

Creating a composable commerce organization is not an overnight job. For many businesses, moving away from hierarchical, cost-squeezing organizational thinking is the hardest step.

The easiest way to do this is to start small. Composability is not an all-or-nothing approach. Take the time to identify an area to peel off as a service, such as a pricing API, and start forming a team around it that uses this new style of composable architecture. Then do it again and again, giving responsibility and ownership for these different features to specific, focused teams.

By taking this approach, you can see the value composable commerce offers and move to be a composable organization over time.