by : Ian Green
October 01, 2021
There has been a lot of discussion in recent times about the composable business, a term coined in 2020 by Gartner to describe an approach to business structure that allows for resilience in an age of constant disruption. This article discusses the use of data analytics to further enhance this business approach.
The idea of the composable business grew out of the chaos of 2020 as the coronavirus swept through the world, causing wide-spread loss of lives, economic catastrophe, and a mass-evaluation of business practice. It made years of sales data irrelevant, it shut down whole sectors of industry, particularly those that relied on face-to-face interaction such as hospitality and live music venues. Any business that could possibly go online was finally forced to take that leap.
Those that were able to digitize their business were forced, very suddenly, to restructure themselves for that transition. It was in this urgent need to restructure that the term ‘composable business’ was born. It has since become both a philosophy and a very practical and physical, as well as a technological, discipline. Each element of your business becomes modular, disposable, and interchangeable. It is the ‘agile’ mentality, taken to the next level.
The days when companies could remain static for decades (think of the behemoths that dominated the 20th century such as Ford Motor Company) with barely even a change in culture, let alone a restructuring, are gone. We live in the age of disruption. And the coronavirus was, and remains to be, the greatest disrupter of this age so far.
This concept of the composable business may sound intriguing on paper, but how does one restructure one’s business to be composable? Not all businesses have millions to invest in new technology, and be prepared to dispose of that when the next disruption occurs. Not all businesses have the time to contemplate theoretical business concepts, when the next fad can come along the very next day. Change is expensive, it is an investment of time and energy, and these can be in short supply for many. Furthermore, even if we do adopt a composable strategy, how do we choose which elements of our business to invest in, or dispose of?
The rise of data analytics over the last decade has been dramatic. It has been identified as being one of the most daunting, but also valuable, investments modern businesses can focus on. Gartner has identified that 74% of companies find that BI is an intimidating business adoption. And 24% do not get out of their data analytics investment what they hoped for.
When data analytics is done right, it is transformational, when it is not, can be a disappointment. The giants of today’s tech world such as Amazon, Apple, and Spotify have fully adopted data analytics in a way that could only be described as part of their business structure.
Amazon is a company built on product recommendations using data analytics, Apple uses their devices, such as smart watches to learn about our habits to know what product strategies to take next, and Spotify, like Amazon, relies on data analytics as one of their core business functions as they recommend what you should listen to based on your listening habits. This is the modern business model, inextricably tied to real-time data.
And because these companies have absorbed real-time data into their very business structure, they will morph and adapt to our needs, and our changing tastes, and this morphing will occur with a speed that would have been completely unthinkable not too long ago.
This is the nature of the most resilient modern businesses in the world; data-driven, able to seamlessly dispose of elements of themselves that no longer work, and able to accept new modules when necessary also. By ‘modules’ I could mean new strategies, moving into new markets, or in the case of Apple, creating new products if the data they collect on our tastes, or habits, change. But ‘modules’ could likewise mean an entire tier of management. An element of IT infrastructure. A department.
These companies, with astounding agility augmented by data analytics, are able to respond instantly to our tastes, the market, a deficiency of their supply chain, or any kind of business requirement. They are the most market-driven, and most robust companies in history, because they are the most instantly adaptable companies in history. And they have achieved this through a data-driven business structure.
The use of data analytics to augment composability means entirely embracing the data age. The IT components of this could mean real-time streaming of click data on your companies website, and the visualization of this to identify which products you sell are hitting which demographic optimally. Allowing you to choose where you invest for growth, or when you terminate a product line. Perhaps allowing you to target with greater precision your advertising efforts, or apply real-time fraud detection in the banking sector, even real-time fault detection by conducting analysis on data from IoT devices in mining or oil drilling.
Imagine not just using data, but being so in touch with your data, that when the next big disruption occurs, your business is so agile that whatever changes are necessary to your business occur almost automatically. The modern composable businesses will be using data analytics system advanced enough to even prescribe how they should respond to disruption.
And not all of this is optional anymore. Tech debt can prove crippling in today’s business landscape. Stalling on a composable approach to business can mean loss of market share as your competitors adopt this philosophy, and begin using such tools as data analytics to adapt their composable operations with real-time intelligence.
Today’s most resilient companies are moving toward composability, and when that adoption occurs those that are truly determined to survive are augmenting their composable business with data analytics. These companies can react in real time to disruption, they can remove modules of their business seamlessly, or adopt new technology with greater agility.
In the age of disruption it is the truly agile that respond to change effectively, and as many of us know, change is the new norm.