SAP’s recent CX Live event, in New York, offered an in-depth perspective on the question of composable commerce. Gartner speaks highly of this architecture, while Forrester’s 2023 Commerce Predictions report offers caveats about composable commerce.
What does all this mean for B2B companies running SAP?
Here are 5 takeaways.
1. Composable commerce isn’t for everyone
For organizations that can justify the investment, composable commerce offers certain benefits. However, companies can achieve many of the same benefits through modular, agile approaches as well.
That said, here are the primary benefits of composable:
- Modularized, rather than monolithic architecture.
- Flexible and extensible. You can swap parts out as your needs change without affecting the core, which avoids vendor lock-in.
- Highly flexible approach to front-end user experience.
Composable also comes with some caveats:
- Only digitally mature organizations are equipped to win with composable.
- This approach requires experienced, expensive developers. You could say it doesn’t come with an instruction manual.
- The ability to build something doesn’t mean you need it.
- You’ll have to manage multiple vendors and maintain critical “connective tissue.” This is the opposite of vendor lock-in, but it’s still a problem.
As you can see, composable commerce may be the right choice for digitally mature organizations that 1) have a large, robust IT team prepared to support a complex architecture, and 2) have a strategic imperative to purchase and support such a complex and expensive solution. (More on that strategic perspective in #4 below.)
2. Industry analysts are split on composable commerce
Gartner took a firm stand on composable in their 2020 whitepaper, Composable Commerce Must Be Adopted for the Future of Applications. They summed up their perspective this way:
Application leaders responsible for digital commerce should prepare for a “composable” approach using packaged business capabilities to move toward future-proof digital commerce experiences.
Compare that to Forrester’s 2023 Commerce Predictions report (Oct 2022), which takes an opposing stance:
One-third of digital businesses will regret playing “software company”… In 2023, a third of digital businesses will abandon or restructure midstream projects that prove too complex to execute or maintain. Some digital businesses are overcorrecting as they abandon proprietary and legacy tech to embrace the most custom and flexible — but massively complex — commerce tech ecosystems. From custom user interfaces (UIs) to innumerable integrations, these systems require firms to orchestrate — and maintain — every aspect of their tech ecosystem. In their second and third years, new implementations will fail, and custom UIs will crumble from post-launch neglect. Digital businesses will pivot to reengage with commerce solutions that balance ecosystem management, business user experiences, and Function-First Tech Buying enablement.
If we read between the lines here, it seems the industry is confronting the fact that composable comes at great cost.
So what does that mean for SAP companies who’ve already invested heavily in their ERP?
Let’s look at SAP’s perspective on composable.
3. SAP recommends modular, agile approaches that are “composable-ready”
Riad Hijal, Global Head of Marketing and Solutions at SAP Commerce, recently posted on LinkedIn about Forrester’s 2023 Commerce Predictions. He summarized his perspective by saying, “Seems like pragmatic composability (as opposed to dogmatic composability) is starting to take hold.”
This aligns with SAP’s perspective at CX Live New York. At the event, SAP shared a view of commerce that’s unified on a single platform, agile, modular, and “composable-ready.”
Likewise, in SAP’S whitepaper Achieving Agility In Digital Commerce, the company recommends caution when considering fully composable architectures:
Many terms are generating a lot of buzz in today’s commerce landscape. From “fully composable” to “headless”; from “microservices-based” to “API-first”, the technology itself often takes center stage instead of what the technology can do for the business.
The technology, in and of itself, is like the ingredients for a recipe; it requires a cook to bring it to life. In the case of platforms with fully composable architectures, the ingredients are microservices, APIs, and packaged business capabilities; it requires skilled technical resources to connect the dozens of components together to form a functioning digital commerce system.
SAP offers a wise perspective here. Rather than focusing on technology for its own sake, SAP companies should look at what the technology can do for the business.
4. Composable only makes sense if you have a strategic imperative to reinvent the wheel
In our experience, B2B organizations tend to fall into two camps when it comes to IT resources:
- Huge conglomerates doing >$5B in annual revenue. These companies have plenty of IT resources available to build and support custom architectures.
- Midmarket companies with constrained IT resources. These companies depend on SAP ERP for all business data and logic, and their IT teams are already at capacity maintaining SAP ERP.
The first group can afford to launch composable solutions. These companies may have strategic priorities that require a highly custom user interface or best-of-breed components from different providers. With significant IT resources on hand, these organizations can afford the expertise required to stitch these components together (and keep them stitched together).
On the other hand, midmarket companies should think twice about composable commerce. If IT already has their hands full maintaining SAP ERP, then the organization will need to add significantly more IT resources to stitch that composable architecture together (and keep it stitched together).
The question is whether that move makes sense.
Should midmarket B2B companies look at composable commerce?
For organizations that still rely on phone, fax, and email to interact with customers, composable commerce may be more trouble than it’s worth. These companies tend to do better when they focus on incremental changes in customer experience—for example, starting with a portal for order tracking, then enabling B2B ecommerce capabilities on the same platform.
Architecture is also a crucial consideration for these companies. If IT has their hands full maintaining SAP ERP, then the commerce solution should leverage that complexity, rather than adding to it. This means a comprehensive, packaged integration to SAP ERP is essential.
The other challenge here is minimizing the number of vendors involved in a commerce solution. By nature, composable commerce forces the merchant to dialogue with a wide range of vendors whose software is stitched together. Other than the merchant, there’s no one to act as the referee between these systems or triage issues when they arise.
5. Evaluate your appetite for complexity
It all boils down to this: Composable commerce requires coordination between multiple software vendors. It also requires significant IT expertise to build and maintain integrations between these systems. Composable commerce doesn’t come with an instruction manual, which leaves the merchant carrying the load from a technology perspective.
In contrast, agile, modular commerce approaches typically rely on a prebuilt, extensible core. You don’t have to reinvent the wheel, and you keep your vendor count low.
Different organizations will have different preferences here, but the key is to evaluate your appetite for complexity. Are you prepared to do it all and build your own unique commerce architecture? Or will your business perform better with a trusted advisor managing a modular, integrated commerce platform?
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