Insights
Costs of Moving to Composable Tech
What You Need to Know
- Article
- 7 MIN READ
- May 27, 2023
Director of Operations
Head of Platform Strategy
Summary
Every year, more companies are considering the move towards composable technology. Between rising economic pressures and higher expectations from end users, companies can’t afford to remain status quo with their digital experiences if they want to remain competitive.
For those on legacy monolithic tech, moving to composable is not a straightforward process. Not only do leaders need to define what new experiences and capabilities they want to gain from the tech, they need to be able to answer an important, but multi-layered question: what’s it going to cost, and what’s the ROI?
Like any long-term business decision, attaching specific timelines and costs to future business value is both an art and a science. When it comes to the costs of replatforming, some are quite measurable, like new vendor subscriptions or implementation contracts. Other costs, like employee development, recruitment, and change management have a very real, but less measurable set of cost indicators.
If you’re unsure of what costs to factor in, or how to move forward in your replatform journey, you’re not alone. At Apply Digital, we’ve worked with dozens of companies and software vendors to create best-in-class digital experiences using composable technology. While every business case is unique, there are some common cost categories that every leader should consider as they prepare for change.
Below, we’ll cover the most common costs and things you should consider in planning your journey, as well as some tips to prepare well and avoid surprises.
Clarify your needs
Before we jump into the costs to factor in, we want to take a moment to stress the importance of defining success, and the issues you want to tackle, before you get started.
There are many ways to use composable tech to your advantage. It’s shown to increase page speed and conversions, and reduce technical inefficiencies and expensive upgrades to monolithic tech. The sheer range of experiences and benefits that you can create with composable tech is precisely why you should decide how you’re going to measure if you’re successful or not, up front. If your team is not aligned on the improvements to prioritize, it will be difficult to calculate ROI down the road.
Typically, we see drivers fitting into two camps: business outcomes and technical outcomes.
For example, do you want to improve your omnichannel customer experiences? If so, you should be exploring budget and resources for tools that create a seamless experience across devices, regions, and languages. Measurable business outcomes here typically look like improved site speed, mobile device engagement, and a lift in overall conversion rates.
Or, if you find that your team is spending a lot of money and time on maintaining or upgrading technology, you could likely benefit from optimizing for more technical outcomes. You’ll want to focus your budget and roadmap on tools and vendor partners that reduce site downtime, speed up time to market, and help your team work more efficiently, and collaboratively.
Once you get these objectives nailed down, it will be easier for you to accurately estimate what it’s going to cost. You’ll have more confidence comparing and contrasting vendors, and draft an implementation timeline that supports your set of success criteria.
Vendor technology costs
By moving towards composable tech, you’ll be assembling a set of different tools to meet your specific needs. Working with a suite of tools means your budget will need to include the individual cost of each vendor, as well as the build associated with getting it up and running.
There are a couple of helpful lenses you can use to get a more accurate picture of your potential spend when it comes to assembling your vendor stack.
1. SaaS vendor pricing
First, is that you’ll likely be selecting from vendors that operate with a SaaS model. If the vendor is MACH-Alliance certified (which we highly recommend), then the solution will be cloud-native. This is great news because they will likely offer a tiered subscription piercing model, making it easy for you to estimate what the tool will cost each month.
Thanks to the free and basic plans available across many SaaS vendors, you’ll have the opportunity to try out the tech to see if it’s right for your team and build from there. For example, commercetools, a common commerce engine tool we use in client builds doesn’t require upfront costs to get started. You can begin with a pay-as-you-go model, increasing your feature set and associated costs as your needs evolve.
2. Implementation and incremental upgrades
Second, is that you’ll want to investigate what set-up and implementation costs looks like for specific vendors.
A huge benefit of embracing a composable, MACH-led platform, is that you can dial vendor services up or down as you need them. This is great for managing costs. But this flexibility also means there’s potential for variability in cost. So you’ll want to make sure you do some investigation around upgrades and incremental build timelines to avoid surprises.
For example, we’ve seen some vendors raise fees for builds that take longer than their proposed implementation timelines, if the project drags on. This means you’ll need to ensure the timescales you commit to are reasonable at outset, and that your team is able to dedicate the necessary effort to make the setup a success.
In many cases, you may have a particular area of the business you may want to start with, and build your ecosystem out in stages from there. Having alignment from internal and external parties on the runway and desired time horizons is important to accurately estimating implementation costs. For example, you could use a tool like Contentful to begin migrating to a new CMS, and adjust and adapt as needed. This saves overbuilding and additional costs of reworking your setup.
3. System integration costs
Part of your journey to replatforming from a monolithic to composable tech stack may include working with a System Integrator. Apply Digital sits in this camp.
System Integrators (SI’s) help draft a strategy and propose opportunities based on your business goals, can identify the tools you need, and partner in building out your composable stack — while guiding overall project success.
The degree to which you need SI support will vary according to your specific needs, which will determine the costs associated with bringing on this type of partner. After working with dozens of clients over the years, we find that many organizations end up saving money down the road by avoiding costly mistakes associated with trying to figure everything out from scratch. There are a handful of projects where we’ve been pulled in to ‘re-implement’ a tool that was launched poorly. Working with an SI can help you fast-track your learning and avoid this wasted time and resources.
4. Change management costs
While the cost categories above are often the most obvious and measurable, change management costs are just as important to factor in. These show up indirectly at first, but have very real consequences on the balance sheet as time goes on. Here are the most common ones that people overlook:
Workflow and operational changes
When you move from monolithic to composable tech, ways of working often need to drastically change in order to get the most out of the new tech. This includes updated team communication practices, workflows, and protocols for shipping new content and experiences.
For example, instituting an atomic design approach will help you get the most out of a composable CMS like Contentful. With Atomic Design, you create a set of reusable components for building webpages and creating content across different devices, in different languages. Having this set of pre-made building blocks means your marketing team can ship new pages with a ton of autonomy, without relying on the technical team. This reduces the time it takes to get new experiences to market, but requires a new set of practices to ensure the team is collaborating well.
Teams often benefit from rolling out agile development and agile delivery practices to maximize the potential of a composable system. These team workflow changes are some of the most significant change management components that get overlooked. Associated costs include time and effort spent revamping these systems, and can also involve restructuring teams.
Employee training and development
With the above change management aspects in mind, the importance of upskilling and training your team can not be overstated. You may end up needing to hire for new roles to support and maintain your new setup. Or, evaluate the necessary team structure changes needed to make the new system a success. Costs associated with this often include rolling out specific training programs for new tech, a focus on employee development and performance management programs, as well as the cost of hiring.
Looking ahead
While there are many options and costs associated with getting up and running, one thing is certain: industry leaders agree that composable tech is the future.
Whether you decide to stay on legacy monolith tech, or make a change towards composable tech, both paths come with a cost. Staying status quo means you’ll continue to spend on technology maintenance, and will be forfeiting increased sales down the road as the industry shifts towards faster websites, more innovative experiences, and quicker time to market due to the steady adoption of composable tech.
If you’d like support in your re-platforming journey, we’d be happy to chat about how we’d be able to help. From setting strategy, to tool selection and budget management, we provide a range of services to help you accelerate toward your goals. Reach out to get in touch.
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