Composable Enterprises: The Digital Strategy of Tomorrow Is Modular

Disruptive technologies and a rapidly changing regulatory landscape mean that adaptability has become a business imperative. However, many companies are still built for stability, not for speed and agility. While 70% to 80% of today’s IT budget is needed to maintaining legacy tech, launching new products can take more than 30 weeks. But help is at hand – in the form of composable enterprise architecture, an approach geared to mastering the manifold challenges of ever-accelerating change.

Composability in a Nutshell

Enterprise architecture is made composable by breaking down enterprise functions and systems into interchangeable modular components. This gives rise to new IT capability models that enable companies to assemble (or “compose”) business functions using a plug-and-play approach.

Composability is rapidly gaining ground: By next year, some market observers expect around 60% of large enterprise to be applying composable business principles – such as generative AI applications – to gain an edge when it comes to delivering new digital capabilities fast. The key insight here is that innovative technologies alone can’t provide the necessary real-time agility; they must be accompanied by new business and operating models.

Implementing A Composable Architecture: The Organizational Dimension

Bearing this in mind, there are several organizational aspects that companies must consider when building a composable architecture. First and foremost, they should embed modularity and integration in their strategic planning.

This entails analyzing the business and IT strategy to discover where composable business components provide value and how they align with strategic business objectives. Here, it’s essential to implement a structured architecture planning and decision process based on Enterprise Architecture (EA) patterns to provide architecture guidance on where to apply composability.

Creating a Composable Technology Stack

Next, attention turns to the technology stack, which must be made composable – for example, by adopting an API-first development approach focusing on reusable application programming interfaces. Event-driven architectures that are capable of responding to triggers and that scale autonomously to meet changing needs are another key element here.

To minimize dependency, it makes sense to deploy cloud-native platforms, which provide serverless computing and platforms-as-a-service. This approach means that, unlike their traditional on-premise counterparts, composable architectures are generally decentralized and distributed across different providers and geographical locations. 

Adopting The Right Mindset

Another key organizational consideration, and one closely related to decentralization, is ecosystem-ready thinking. To achieve composability, enterprises not only have to revamp their own tech; they must also actively plug into larger digital ecosystems – for example, by entering into data-sharing partnerships or using low-code platforms. This provides valuable new opportunities to use a variety of prebuilt components beyond their own organizational silos.

Finally, enterprises aiming for composability must establish organizational governance that focuses on modularity and scale. This entails setting up a central capability registry, domain-driven ownership, and clearly defined guardrails for integration and security. Governance can be seen as the glue holding composability together. Without it, enterprises run the risk of generating more complexity than even composable architectures can solve.

The Strategic Benefits of Composable Architectures

So, what tangible benefits can companies expect from their composable architecture? Apart from the obvious plus of enabling the agility needed to keep pace with increasingly rapid launch and test times, architectures of this type have great advantages for AI and automation.

By offering support for plug-and-play AI models and decision engines, they enable fast and efficient scaling of generative AI and intelligent automation in today’s ever faster innovation cycles.

Greater Resilience, Greater Sustainability

Composable architectures are also notably more resilient than their less flexible traditional counterparts. Because they generally encompass systems at disparate locations, using different logics, and delivered by different providers, if a module fails, others can continue to operate without interruption.

Finally, architectures of this kind are more sustainable – particularly when it comes to critical infrastructure sectors such as energy. According to an Accenture study, 44% of organizations expect modular systems and the interoperability of associated applications to significantly change how they report and track environmental impact over the coming three-to-five years.

Don’t Overlook the Challenges

Of course, composable architectures can also present hazards. As already mentioned, organizational governance is a key consideration. In addition, the decentralization of such architectures must be controlled via appropriate governance frameworks designed to avoid architectural sprawl.

Like any new approach, composable enterprise architectures call for new expertise. So, it’s imperative to skill up teams accordingly – whether that be in the field of API design, service orchestration, or DevOps. A further risk to bear in mind is potential vendor lock-in. While some SaaS platforms offer advantages in terms of modularity, they may also give rise to tight dependencies.

Addressing the Challenge of Change

Another important factor is organizational inertia. Implementing a composable architecture involves a major cultural leap from function-based hierarchies to capability-based teams, which can trigger pushback within the organization.

The extent to which inertia of this kind can block change is evident from the developments of recent years. For example, in 2023, Gartner predicted that by the following year, enterprise composability would be a key criterion for new application planning at 70% of large and medium-sized enterprises.

According to Accenture, however, only 29% of businesses currently estimate that, over the next three years, their organization would enable access to functions in third-party systems to allow the integration of modular systems with their digital architecture. 

Fueling Growth, Innovation, and Responsiveness

Given their evident advantages, composable architectures should be a high priority at C-level. By embracing modular operating models, executives can increase growth, greatly accelerate innovation, and enhance their ability to respond effectively to crises.

What’s more, modularity is now becoming established as a new strategy. Research by IDC suggests that, by 2026, 60% of G2000 enterprises will rely on AI-augmented composition and natural-language-based coding to create new application experiences from existing components. So, if you haven’t already embarked on your journey toward composability, it makes sense to get started sooner rather than later.

Interested in Learning More?

If you’d like to find out more about composable enterprise architecture for your specific use case, please reach out to me. And if you have ideas of your own about this strategic modular approach, its benefits, and its challenges, I’d love to hear them. Feel free to leave a comment below.