The dream of business agility in the current world of static business design

”We should immediately stop deliveries and invoices in certain regions due to the current geopolitical situation. However, it is impossible because the process is fixed, and any changes would take too long to implement.”

The above discussion with the Chief Architect team of a global manufacturer occurred earlier this year. It shows how even the best minds of a global company can feel powerless in front of a static process. That discussion was not about a single process but the future direction of enterprise architecture on a grand scale. At the end of this blog, I explain how we discussed curing and re-designing that static and unsatisfactory end-to-end process. But before that, I shed some light on composability and certain essential concepts.

Enter Composable Business

The original meaning of "composability" relates to music. Logically, a good definition of composability is the ability to compose something new from multiple lesser elements. Think of Lego blocks. In the corporate world, Composable Business refers to organizations that can create value, products, and services by combining and recombining components of their business in a modular and flexible manner. Put simply, it means true agility.

Gartner coined the concept “Composable Business” in 2020. In a fairly short time, it has become a part of the strategic narrative of several organizations. Even though composable business is not yet the hottest buzzword, we regularly engage in discussions about composability with CIOs and Chief Architects of some of the largest companies in the Nordics.

Enterprise Architecture and Data Management – two essential concepts of digital transformation

Managing the digital transformation of a large organization can be a daunting task. There is so much noise, competing paradigms, and much to interpret based on the organization’s context—different methodologies, standards, and new regulations. Dark legacy lurks in the shadow of the shiny cloud. To create some signal amongst all the noise, I’d like to explain two fundamental concepts as simply as possible.

• Enterprise Architecture (EA) connects the organization's strategy and business capabilities. It is a continuous curation and narrative of aligning the organization’s direction to a map everyone understands. It is about understanding the requirements and potential of data and IT assets to implement the capabilities, not architecting IT per se. Business architecture is the core of EA. 
• Data Management is about having sufficiently mature practices for handling data through all the steps of the data cycles and various processes. Data Management is not about managing data technologies and platforms, but understanding how data is gathered, processed, stored, and owned. It is hard to justify the value of data in an organization without data management.

I selected these two concepts because they are the two most essential functions of any respectable organization's IT, data and digital. They are powerful together. Without data management, no machine learning or generative AI initiative will scale. Enterprise Architecture, in turn, is considered imperative for digital transformation by many people. As a former Chief Enterprise Architect, I could not agree more.

Composable business needs composable thinking

What would it take to start designing a composable business? Think of creating new business capabilities by composing existing “pieces of the business” without the cost and burden of traditional development projects. Orchestrating new processes by changing the order of autonomous process steps that contain all the required business functions, data, and technology. What could be composed? Anything, especially anything digital.

Composable thinking challenges the traditional mindset in such an enormous way that we need to think of music to understand it. Take for example vinyl and cassettes, the music storages of the 1900s century. They were digitized by compact discs (CD). While a CD is digital, the order of the songs on a CD is static and fixed. Then along came modularity, autonomy, independence, and internet technology – composability – which enabled the assembling of unlimited songs to unlimited playlists and virtual albums in streaming services. Today, most of us use streaming services instead of CDs. The difference between CDs and streaming services is a good analogy for the mindset gap between regular digital and composable.

Composability requires composable architecture

Composable business requires a new architecture that elevates an organization’s transformation capabilities beyond what we currently call 'digital transformation'.

To package a piece of your business, you need composable architecture. It consists of these three elements:

• Composable Business Architecture (CBA): Traditional business architecture is not sufficient, as the business capabilities designed as composable need to be designed for interoperability: the capabilities need to have capabilities that allow composing them. Think of process design: the process steps need to implement their business logic, but they also need to be able to be executed independently. CBA defines the composable data requirements.
• Composable Data: Here, modern data management is a prerequisite. Composable data means designing reusable and autonomous data assets encapsulating all necessary data and its references. A usable concept already exists for this purpose: Data Product. A Data Product is a data-based digital product often used with the socio-technical concept of a Data Mesh. Think of it as a product: a well-defined unit tailored to user needs.
• Composable Technologies: One question usually arises in customer discussions: “We have been utilizing service interfaces for almost two decades; why are we not composable?” The answer to this question is simple: technology alone, without the necessary binding of business context and data, does not enable composability. Composable technologies consist of machine learning, digital simulation, data virtualization, evolving integration, and connectivity technologies that accelerate the process of making chunks of business and data more independent.

Outside these three elements, composable architecture governs many things such as security, application architecture, (cloud) infrastructure, etc.

Click to enlarge

At the nexus of the three key elements of Composable Architecture, Modular Business Components emerge like diamonds formed under the pressure of the surrounding elements.

Modular Business Components encapsulate all the ingredients and capabilities of a piece of your digital value chain. For example, consider the order-to-cash process flow in a region about to be hit by a hurricane, or suffering from severe flooding. Order and credit management would need to be handled differently. So would shipping, accounts receivable and payments. What if generative AI could orchestrate and compose all process steps in real time and on a customer-specific basis? This is only possible if the building blocks of the organization are designed to be composable.

Composable business happens when your organization, your business, not (just) IT, can explore, find, and use these components to create new business value by combining them in different ways.

Designing business agility

The agile narrative and working methods have yet to make many organizations agile. Most agility is about creating digital products and software development faster, instead of focusing on what the organization could do better. We humans are notorious for pursuing faster horses when an electric flying vehicle would be available, so a paradigm shift towards designing organizations to become agile will not happen overnight. However, we have customers who have injected their version of composability into their strategy. It will be interesting to follow their journey. As a side effect of increasing architectural maturity, these companies will be well-equipped to deal with topics like ESG requirements, data sovereignty, and utilizing artificial intelligence.

From a CD to a streaming service

In the beginning of this article, I told you about a global manufacturer that needed to immediately stop deliveries and invoices in certain regions due to the geopolitical situation. What happened to their process? Well, nothing happened yet. We realized that a static, fixed process needs to be re-designed to allow more flexibility, and that kind of design work requires more soft skills than tech skills. A legacy process is like a CD: all the songs – I mean process steps – are in perfect order, but the order happens to be fixed. Now, the customer has realized they need a streaming service instead of a CD.

Takeaways for a composable journey

• Do not start with APIs: concentrate on the business context and data, APIs will follow.
• End2End Thinking is more important than End2End Process.
• Enterprise Architecture and Data Management are a must!
• Composability happens when business leaders, not just IT developers, pursue re-usability of assets.

Tietoevry Tech Services helps Nordic societies and businesses transform their processes, applications, and infrastructure for greater business agility, security, and efficiency. Composability is an evolution of Enterprise Architecture that combines data management and composable technologies. We are already engaged in composability with certain customers who have a planning horizon that spans beyond digital transformation.