Embracing the Future: Composable Business Models
In an ever-evolving business landscape, the concept of composability is emerging as a key enabler for enterprise agility and innovation. The future of businesses lies in their ability to dynamically configure and reconfigure capabilities, akin to building with LEGO blocks. This modular approach, combined with “as a service” offerings and generative AI, is transforming how organisations achieve best practices in processes, technology, and management.
Understanding Composability
Composable business models are built on the principle of modularity, allowing organisations to mix and match components to tailor solutions that meet their specific needs. According to Flowable’s insights, this approach offers unparalleled flexibility, enabling enterprises to quickly adapt to market changes and innovate at speed1. Gartner’s keynote further emphasises that the future of business is composable, highlighting the importance of modular architectures in driving resilience and growth.
Gartner’s Perspective
The Gartner keynote on composable business models underscores the criticality of being able to assemble and reassemble business capabilities swiftly. This ability is likened to having a “digital backbone” that supports rapid response to changing market demands. Gartner points out that composable enterprises are more resilient because they can pivot and adapt their structures more fluidly than traditional, monolithic organisations.
The Four Principles of Composable Business
According to Gartner, the four core principles of composable business architecture are:
Modularity: Breaking down business capabilities into smaller, manageable modules or components that can be assembled and reassembled as needed17.
Autonomy: Each module or component operates independently, allowing for greater flexibility and reducing the risk of systemic failures17.
Orchestration: Coordinating the interactions between different autonomous components to achieve desired outcomes and deliver business value17.
Discovery: Continuously identifying new opportunities for improvement and innovation, enabling organisations to integrate new components or capabilities as needed
Source: Gartner
The LEGO Analogy
Imagine your business as a LEGO set. Each brick represents a different capability or function within your organisation. You can combine these bricks in various ways to create a structure that perfectly fits your current objectives. If a particular component is no longer serving its purpose or a better one becomes available, you can simply swap it out without disrupting the entire system. This analogy perfectly encapsulates the essence of composable business models
“As a Service” Solutions
“As a service” offerings are crucial to composable businesses. These services allow organisations to access specialised capabilities on demand, without the need for heavy upfront investments. For instance:
Marketing as a Service (MaaS): Companies can leverage expert marketing strategies and tools without maintaining an in-house team, ensuring they always stay ahead of trends and customer expectations19.
Customer Success as a Service (CSaaS): Outsourcing customer success functions can help organisations maintain high customer satisfaction levels while focusing on core business activities19.
People & Culture as a Service: This service enables companies to foster a positive workplace culture and manage HR functions effectively through external expertise19.
The Role of Generative AI
Generative AI is a game-changer in the realm of composable business. It empowers organisations to automate and optimise various components of their operations, enhancing efficiency and innovation. Here’s how generative AI is making a difference:
Customer Success: AI-driven chatbots and virtual assistants can handle routine customer inquiries, allowing human agents to focus on more complex issues. Generative AI can also analyse customer interactions to provide insights into improving service delivery.
People & Culture: AI tools can assist in recruiting by generating job descriptions, screening resumes, and even conducting preliminary interviews. Additionally, AI can be used to monitor employee engagement and suggest interventions to improve workplace culture.
Marketing: Generative AI can create personalised marketing content at scale, from email campaigns to social media posts. It can also analyse market data to identify trends and optimise marketing strategies in real time.
Achieving Best Practices Through Modularity
By adopting a composable approach, organisations can continuously refine and enhance their processes, technology, and practices. This modularity ensures that best practices are not static but evolve with the organisation’s needs and external environment. The ability to seamlessly integrate “as a service” offerings and leverage generative AI allows businesses to stay agile, competitive, and innovative.
Benefits of Composable Business Architecture in the Face of AI Disruption
The integration of AI into business processes is causing significant disruption across industries. Composable business architecture offers several benefits that help organisations navigate and leverage this disruption:
Enhanced Agility: Composable business architecture allows organisations to quickly adapt to AI-driven changes. By breaking down business capabilities into modular components, businesses can reconfigure their operations swiftly to incorporate new AI technologies and respond to market shifts.
Scalability: The modular nature of composable architecture supports the seamless integration of AI solutions, enabling businesses to scale their AI capabilities as needed. This flexibility is crucial for staying competitive in a rapidly evolving technological landscape.
Innovation: Composable architecture fosters a culture of experimentation and innovation. Organisations can test and implement new AI solutions without disrupting existing operations, allowing for continuous improvement and the adoption of cutting-edge technologies.
Cost Efficiency: By leveraging “as a service” models and modular AI components, businesses can reduce the costs associated with AI implementation. This approach allows organisations to access advanced AI capabilities without significant upfront investments.
Improved Decision-Making: AI-driven insights can be integrated into various business modules, enhancing decision-making processes. For example, AI can provide real-time analytics and predictive insights that inform strategic decisions and optimise business operations.
Real-World Applications
A notable example of composable business in action is a Chinese appliance manufacturer that pivoted from producing dishwashers and wine coolers to distributing critical medical equipment during the COVID-19 pandemic. This rapid shift was made possible by the company's composable business model, which allowed it to reconfigure its operations to meet urgent needs.
The shift towards composable business models marks a significant transformation in how organisations operate. By embracing modularity, leveraging “as a service” solutions, and integrating generative AI, businesses can build resilient, adaptive, and innovative enterprises. Just like LEGO bricks, the possibilities are endless when you have the right pieces and the creativity to assemble them.For further reading, you can explore the detailed discussions on composable business in the following sources:
