Last editedAug 20223 min read
Composable commerce is the strategy of creating an application by combining services from different vendors rather than just one. This approach makes it possible for businesses to create applications that are specifically customised to their exact needs. As a result, it offers significant advantages over the traditional single-vendor approach.
The 4 basic principles of composable commerce
Composable commerce is based on MACH architecture. MACH stands for Microservices, API-based, Cloud-native and Headless.
Microservices are small functions or features combined to create an application. When microservices are aggregated, they are often referred to as Packaged Business Capabilities (or PBCs).
APIs are Application Programming Interfaces. They make it possible for services from different providers to work together.
The standard analogy given to describe their role is that of a waiter in a restaurant. The waiter takes the customer’s order to the kitchen and brings back the food prepared by the kitchen. The waiter does not personally prepare the customer’s food; in fact, they probably won’t even enter the area where food is prepared.
When this happens, the customer simply creates the invoice in Xero. Xero then informs GoCardless what payments need to be collected from whom and when. GoCardless charges the customer and informs Xero of the successful collection. Xero reconciles the invoice.
GoCardless does not see the customer's invoice. Xero does not see the customer’s bank details. This improves privacy and security for the payer. At the same time, it allows the merchant to benefit from a seamless end-to-end service.
Many pre-cloud applications work as expected in a cloud environment. They do not, however, necessarily leverage the cloud to its full capability. That’s why many businesses are updating their software to be truly cloud-native. They are also ensuring that any software they create from now on is designed with the cloud in mind.
Composable software is designed from the ground up to avoid hierarchies as much as possible. This makes it much more flexible. For example, it can be scaled up or down as the company develops. It can also be adjusted to suit future needs and wants.
The goals of composable commerce
The drive towards composable commerce is fuelled by three main goals. These are commercial focus, openness, and modularity.
Commercial focus means that applications are created to suit the needs of the business as a whole, rather than being constrained by the demands of existing IT infrastructure.
Openness means allowing businesses to choose whatever works for them rather than being locked into a particular vendor's ecosystem.
Modularity means creating applications out of small components to allow them to be updated easily as circumstances inevitably change.
What are the business benefits of composable commerce?
Most of the business benefits of composable commerce hinge on its adaptability. Using composable commerce allows businesses to engage their customers through the use of compellingly differentiated experiences on any touchpoint.
Furthermore, these experiences can be driven by complex, unique and very precise business requirements such as fast-paced, trend-responsive marketing campaigns with a high level of personalisation.
Drawbacks of composable commerce
Composable commerce has its potential drawbacks too. These all relate to the fact that it has more inherent complexity than using an all-in-one solution from a single vendor.
Businesses that use composable commerce potentially have to manage multiple contracts and multiple vendor relationships instead of just one. In a worst-case scenario, they could find themselves struggling to troubleshoot issues due to the difficulty of determining the source of a problem.
This is not an argument against using composable commerce. It is, however, a reminder that it is vital to use the composable commerce approach mindfully and strategically.
For example, if you’re an SME, it is advisable to minimise the number of vendors you work with as much as possible. Also, ensure that you have third-party IT support, particularly if you have limited or no in-house IT resources.
The importance of documentation
Documentation is important for all forms of software development (and business in general). Effective documentation is vital for any business using composable commerce, due to the complexity it can create. It’s also important to promptly update this documentation whenever changes are made.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.