An origin story: Understanding the transformation of composable commerce in B2B business strategy

In a recent CommerceTomorrow podcast episode, Andy Hoar, Co-Founder at Master B2B, Dirk Hoerig, Founder of commercetools, and Kelly Goetsch, CSO at commercetools, investigated the concept of composable architecture in the B2B context. Their discussion unraveled the nuances of what composable means today in terms of B2B eCommerce strategy, its origins and how it's perceived by both IT and business sides of companies. Let's break down the key points they covered.

Andy kicked off the conversation by tracing the origins of the term "composable." He recalled, "Composable was a term quasi-invented by Gartner in what, 2020? It wasn't that long ago, and it was really a business term." He further explained that initially, the concept of composable technology focused on business agility, though now composable has seemingly morphed into more of a technology term. This shift has made the term somewhat amorphous and broad.

Andy highlighted the challenge in defining composable commerce, noting, "The simplest definition of composable now is non-monolithic, but as you know, that leaves open a whole wide range of platforms." This broad definition has led to many technology vendors claiming to be composable without a clear standard. He emphasized that while everyone seems eager to adopt the term, there’s a lot of variance in what it actually means in practice. The conversation reveals how the term's evolution from a business strategy to a tech buzzword has diluted its meaning, creating confusion among both vendors and buyers.

This evolution reflects a common trend in technology where terms get co-opted and broadened to the point of losing their original specificity. The shift from a focused business strategy concept to a general tech buzzword often happens as companies try to align with the latest trends, leading to a watering down of meaning. This makes it challenging for businesses to distinguish between genuine composable solutions and those simply branded as such for marketing purposes.

During the discussion, Kelly shared his views on what composability should ideally mean. He said, "We like to say that we are composable, as evidenced by our membership in the MACH Alliance." Kelly then emphasized the importance of having a tangible proof point to substantiate claims of being composable. He suggested that membership in recognized industry groups can serve as a credible validation.

Andy added his personal, albeit unofficial, definition: "What composable should mean is conveniently componentized." He stressed that composable systems must be both convenient and componentized for ease of implementation without extensive time and financial investments. This dual requirement of convenience and modularity ensures that businesses can adopt new technologies quickly and effectively, without the heavy lifting that traditional, monolithic systems often require. Andy’s nuanced take underscores the need for practical, user-friendly solutions that genuinely embody the principles of composability.

For B2B eCommerce strategy, the ability to integrate and replace components without massive overhauls is a significant advantage. It allows for a more agile approach to technology adoption, enabling companies to stay competitive and responsive to market changes. However, this ideal can only be realized if the solutions marketed as composable genuinely adhere to these principles, which is why proof of compliance, such as membership in industry alliances, becomes crucial.

The conversation shifted to the gap between the IT and business sides in understanding composable. Andy pointed out, "The word composable is penetrating well on the IT side of the house... It has not penetrated the psyche of the business side of the house." He drew a parallel with the term "headless," which took time to be understood by the business side. This delay in understanding underscores a common challenge in technology adoption where IT and business units operate on different wavelengths.

Kelly and Andy agreed that this gap in understanding creates challenges for B2B businesses trying to implement composable systems. The business side often sees these terms as jargon, leading to a slower adoption and integration process. Andy noted, "You talk to your average GM at a B2B company or a CMO and ask them what composable is, they say, ‘Oh, that's something my IT guy mentions to me, but I don't really know what it is.’" This disconnect can hinder strategic alignment and slow down the pace at which companies can realize the benefits of new technologies.

This misalignment is symptomatic of a larger issue where technological advancements outpace the ability of business leaders to fully grasp and leverage them. For a truly composable system to be implemented effectively, there needs to be a concerted effort to educate and align both sides. This means IT leaders need to communicate the business benefits in a language that resonates with executives, while business leaders need to invest time in understanding the technological underpinnings that drive these benefits. Bridging this gap is crucial for creating a collaborative environment where strategic and technological goals are aligned.

Dirk brought up the importance of a test-and-learn environment in businesses. He stated, "If you're a company that appreciates the test-and-learn environment, which is still a struggle for many companies, if you can get beyond that, that's 90% of the battle." Many companies fear failure, which stifles innovation and risk-taking. This culture of risk aversion can significantly hinder the ability to experiment and iterate quickly.

Andy supported this by citing the example of SpaceX versus Boeing. He illustrated how SpaceX's willingness to take risks and learn from failures allowed it to outpace Boeing significantly in space deliveries. "In that same period of time, Elon Musk's company has done 11 deliveries to the International Space Station," he explained. This mindset shift is crucial for B2B companies aiming to succeed in the digital commerce space. Embracing failure as a part of the learning process can lead to more innovative solutions and a more dynamic, responsive business environment.

The test-and-learn approach is integral to supporting innovation. B2B companies that adopt this mindset can rapidly prototype, test and refine their solutions, leading to better products and services. This approach contrasts sharply with traditional methods that emphasize lengthy planning and risk minimization. By shifting to a culture that values experimentation and iterative improvement, businesses can stay ahead of competitors and better meet customer needs. 

Another significant point discussed is the importance of data. Andy emphasized, "What really separates B2B companies, at the end of the day, is their data. In particular, their customer data." He argued that companies need to see data not as a cost center but as the lifeblood of their business. This perspective shift is vital for leveraging data to gain competitive insights and drive business growth.

The conversation suggests that companies should consider appointing a Chief Data Officer to manage and utilize data effectively. Andy noted, "Companies need governance around this. They need understanding around it." A Chief Data Officer can ensure that their B2B business strategy includes harnessing the full potential of their data, leading to better customer insights and competitive advantages. This role becomes crucial as data increasingly drives decision-making and strategic initiatives in the digital age.

Properly managed data can provide insights into customer behavior, market trends and operational efficiencies, driving smarter decisions and better outcomes. However, this requires a structured approach to data management, including clear policies, robust infrastructure and skilled personnel. 

Toward the end of the podcast, the hosts discussed how vendors can better serve their B2B clients. Andy advised vendors to focus on time to market and ROI, stating, "If you're going to tell me you've got the perfect solution, but I can't use it for three years, I don't care." He highlighted the importance of delivering solutions that offer quick returns on investment. This need for speed and demonstrable benefits is becoming a critical factor in technology adoption.

Kelly added, "We as vendors, we do this all day every day, and I think we too often are put in the adversary box for negotiation purposes rather than the, we are here to partner and help you." The key takeaway for vendors is to think more like business buyers and less like IT buyers, focusing on delivering immediate, tangible benefits. Building partnerships based on trust and mutual goals can lead to more successful implementations and longer-lasting relationships.

The role of vendors is evolving from mere suppliers to strategic partners. To succeed, vendors must align their offerings with the immediate needs of their clients, demonstrating clear and quick ROI. This means understanding the B2B business strategy challenges their clients face and offering solutions that are not only technically sound but also business-relevant. 

To get all the insights about B2B commerce from Andy, Dirk and Kelly, listen to the entire podcast: Andy Hoar, Leading Authority on B2B eCommerce Business & Strategy.