When I first started writing my series on composability and applications strategy, I wondered if most of the leaders I speak with would be turned off by such a technical topic. The nitty-gritty of an organization’s applications architecture may be in the wheelhouse of the senior IT executives. The rest of the C-suite, however? Honestly, most don’t care – and that’s okay.
Now to be clear, the business leaders I’ve spoken with about composability have been really engaged with the idea. Most senior executives care deeply about the impact of technology – whether that’s staying ahead of competitive disruption, solving complex operational challenges, or creating long-term value. In fact, 70% of CEOs say they need to be quicker to shift investment to digital opportunities and divest in those areas where they face digital obsolescence.
So, this is where composability and the right application strategy start to pique the interest of the rest of the C-suite: how can composability help these executives take advantage of digital opportunities that will speed innovation and stave-off digital obsolescence? Here, I’ll focus on three ways in which the right composability strategy helps an organization achieve some fundamental business drivers that any top-level executive cares about: growth, resilience, and profitability.
Composability reduces clutter.
In my previous post, I talked about how all composability isn’t the same; that having a fragmented applications strategy can actually hamper innovation by increasing complexity and cost exponentially. This fragmentation is a challenge that the C-suite certainly recognizes. In a recent Accenture report, 66% of C-suite executives said that the number of applications (over 500 for the average enterprise) and their associated technical complexities were a barrier to these leaders achieving their digital strategy. Having an end-to-end applications strategy, however, reduces that complexity and cost, and puts organizations in a much better position to use composability to achieve their business goals.
Composability supports growth.
While experts predict economic headwinds for 2023, there are many industries poised for growth in the U.S. – from healthcare to sustainable energy to smart manufacturing. Within each of those industries, of course, there are companies whose growth will outpace the rest of their peers, and the last thing they want is for that growth to be slowed down by systems that can’t scale and adapt with them.
A great example of a customer who recognized and sidestepped this challenge is wooden toy manufacturer Melissa & Doug. As they outgrew their homegrown systems, they could have looked to disparate mid-market apps across the business. But this approach would mean having to update and maintain these systems adding cost and inefficiency, ultimately taking resources away from their primary mission. Instead, Melissa & Doug chose Oracle Fusion Cloud Applications which gave them the composability they needed (i.e., to turn-on functionality within the suite as they grew to need it) within a complete an integrated cloud solution.
Composability increases resilience.
Another common business driver for C-suite executives is figuring out how to prepare their organization for whatever major shock they’ll experience next (and the one after that). One of the biggest selling points of adopting a composable strategy is the ability to be more resilient. As your environment changes – disruptive new competitors or technologies, geopolitical instability, etc. – being able to swap out obsolete functionality for new allows you to adapt and thrive. That’s great in theory, but if you choose the wrong composable strategy you can wind up stuck trying to keep pace with your apps and not your business environment.
So, how can you avoid this? A good place to look is in your bakery isle, at Grupo Bimbo, the world’s largest baking company. They have over 200 bakeries on four continents, operate in 33 countries, and have over 3.2 million points of sale throughout the world. Over the past few years, they’ve acquired over a dozen specialty baking companies. Imagine the resilience needed to adapt to a growing customer base whose tastes and expectations are constantly changing. Add to that ongoing global supply chain challenges, and the specter of a global recession. It’s a recipe for disaster (no pun intended).
This hasn’t slowed them down, though. In fact, because they’ve chosen an end-to-end composable strategy with worldwide adoption of Oracle Cloud Applications, they can continue to innovate. Grupo Bimbo can spend less effort on IT maintenance and manual processes, and dedicate more resources to groups such as their Future Systems Landscape – an internal technology incubator. Their ability to integrate core systems like Oracle with their own industry-specific innovation around IOT infrastructure, artificial intelligence, advanced analytics, and robotics helps them to focus on driving their business vision forward. It’s also a prime example of how their composable strategy amplifies their innovation and resilience.
Composability drives profit.
Perhaps one of the basic questions executives in the C-suite ask when evaluating a strategic path is, “Will this increase shareholder value?” Will it help me to drive down costs, increase revenue or both? In their report, Value Untangled, Accenture posits that composability can do both. They surveyed over 4,000 C-suite executives and found that the most successful companies were the most agile ones, and they all had one thing in common: high interoperability enabled by composable technology.
According to the report, these agile companies grew revenue six times (6X) faster than their peers and were on track to gain an additional five percentage points in annual revenue growth. These companies also outpaced their peers in profitability, resiliency and other value-creation measures critical to business.
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