As organizations grow, it becomes increasingly difficult to go back and fix a business dysfunction or center of excellence that may have previously worked, but no longer attracts new customers. The combination of improved technology, a weak economic environment and outdated processes is forcing companies to re-evaluate how they do business. Therefore, it is no wonder that the demand for an agile approach to business processes is on the rise. To this end, organizations need to become more effective by streamlining operations and business models, while removing silos of business processes. However, a large percentage of organizations do not even know they have silos, nor how to remove them. This creates a need for implementing business composability, as a means to address the complex, ever-changing nature of the evolving business environment. Business composability helps enterprises to become more adaptable, flexible, and agile through responding to changing external market dynamics in a rapid manner. Hence, it enables businesses to realize a fundamental shift in their processes and operating models.
The gist of business composability lies on the development of a platform that can connect products and services based on different business and operative models. In several cases the value isn’t created in products or services, but rather on the platforms that connect them. In this context, business composability enables the integration and orchestration of different assets into services.
The Rationale behind a Business Composability Action Plan
To take advantage of business composability, enterprises must develop a proper action plan that aligns to their business strategies. Specifically, every business should have a vision and a strategy. The vision defines the purpose of the organization, while the strategy defines how the organization will achieve that purpose. Nevertheless, there is something missing from these traditional definitions: They don’t indicate how to measure success. In fact, measuring success is one of the most important things that an entrepreneur needs to do — especially when the purpose is to build a business for the long term. In this direction, an action plan is an effective way to manage time and resources. It can help avoiding distractions and rather focus on what matters most for the medium and long term. That’s also where a business composability action plan comes in handy. It enables companies to create a clear picture of what success looks like over the long term, which in turn helps them set goals and make decisions about how to spend their resources each day. Specifically, a business composability action plan illustrates how to combine different assets in value-added products, services and processes that optimize business performance.
Pretty much, the establishment and implementation of a business composability plan boils down to four main components: (i) Leadership commitment; (ii) Awareness building and education; (iii) Team competency; and (iv) Measurement and reporting. Essentially, if you can convince management that your business composability initiative is the right direction to take, begin developing a team to handle the execution of your business composability plan, and use metrics to track results, you’re well on your way to seeing positive results. However, it is important not to rush any of these steps: A good plan takes time, and it will likely require some trial and error before you get everything sorted out. At the end of the day business composability will benefit your company in the long run.
Elements of a Business Composability Framework
A key to understanding the impact of composability on your business is to develop a common language that everyone can use for discussing the changes taking place. In this direction, a Business Composability Framework (BCF) is an approach that helps you understand what composability means for your business and how it will affect your operations. In practice, it provides a common language so that anyone in your organization can discuss the topic.
A typical business composability framework consists of the following elements:
- Business Assets: The business assets represent the organization’s core value proposition and competitive advantage. These assets include products, services, technologies, brands, channels, people, intangibles (e.g., patents), etc. Moreover, they typically comprise things you own, like buildings, equipment and intellectual property. They are often owned by different departments within an organization, so they may not be connected to each other or even visible to each other. For example, human resources may own employee records while the IT department owns payroll software. These two groups don’t share data because it’s not easy for them to connect their systems together.
- Business Models: Business models describe how companies earn money by providing goods or services. These models are usually described as “how-to” documents that describe how a company operates. In most cases, a business model is based on a combination of business assets that enable an organization to create and capture value for its customers. Business models are often described using proven methodologies like the ‘4P’s of Marketing’ (product, place, price and promotion).
- Connections between Assets and Models: These are the connections between business assets that enable them to work together to deliver value to customers or users. Connections can be formal or informal (e.g., processes or relationships). They may be direct or indirect (e.g., partners or third-party vendors). Furthermore, connections illustrate how these two elements interact and coexist within a single business entity or across multiple entities through ownership or sharing agreements.
As already outlined, the business composability action plan will detail how to connect and combine assets in novel processes in-line with profitable business models.
Overall, in today’s fast-paced business environment, speed and agility are of paramount importance to companies looking to remain competitive. Hence, a business composability action plan is essential to quickly addressing shortcomings, assessing opportunities, and implementing concrete strategies for improvement. While this does not resolve all needs of a company, failing to implement an ongoing commitment to the continuous optimization process will undoubtedly leave your business behind. This is a very good reason for understanding the elements of a business composability framework and for using it to develop business practices that help enterprises achieve the best possible results.
