When I joined Green Cargo in 2019, the state of its technology wouldn’t feel unfamiliar to many CIOs and CDOs: The company was in the midst of an unsuccessful 10+ year journey to modernize two mainframe systems and an SAP ERP via a series of consultants. With past experience at Adidas, Ericsson, and ICA Gruppen, I was hired to complete this transformation, but that path—in my estimation—was not exactly the direction the company needed to go in.
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Table of contents:
- 3 Key Characteristics of a Digital Composable Enterprise
- Composability in Action
- Making the Shift to a Composable Enterprise
Green Cargo is a Swedish state-owned rail cargo company that transports all manner of goods by train. With 1900 employees, Green Cargo transports around 21 million tons of freight to 270 locations across Scandinavia. When I was hired, the company was running on a 45-year-old mainframe system and SAP. My directive was to digitally transform the company by replacing and modernizing these systems. However, I proposed a much different and unexpected approach to the board.
In 2019, the IT department wasn’t set up to deliver any business value. The company lacked any digital or agile development capabilities. To build digital resilience for this critical link in the Scandinavian supply chain, I examined these issues and my directive from a risk-based approach. I wanted to ensure that we could deliver the fundamentals (exploitation and routine) while transforming complex legacy systems into a digital future in the cloud (exploration and innovation)—all without prioritizing one over the other. This goal led to a composable strategy.
When I presented my plan to the board, I proposed that instead of focusing on replacing the 45-year-old mainframe system and SAP platform, we should develop an evolutionary strategy with incremental execution. This unexpected request—which included investing in foundational technology to support digital composability and agile development to bring scalability, agility, innovation, and digital resilience to Green Cargo—was approved.
3 Key Characteristics of a Digital Composable Enterprise
Ask 100 CIOs what a composable enterprise is, and you may get 100 different answers. What I have found personally is that a composable enterprise is much more than a digital framework and the technologies and capabilities in it. Experimental and incremental change is critical, while digital resilience and enterprise operability must grow from the core of the business. Achieving these goals requires large cultural shifts, leadership buy-in, a risk-tolerant (and risk-aware) approach, and creating an environment where iterative innovation leads the way.
There are several essential traits of successful digitally composable enterprises, but I have chosen to explore three of them.
Exploitation and exploration
Business doesn’t stop during digital transformation. Daily operations must keep going while technology moves forward. Companies that successfully become composable embrace organizational ambidexterity, balancing the need for exploiting the technology and resources they already have with exploring and innovating new technologies. At Green Cargo, we needed to innovate with what we had — the logic of our mainframes, ERP, and other systems — so that we could become a digital, cloud-based, composable enterprise.
Incremental and experimental
To manage this balance of exploitation and exploration, you must be incremental and experimental. You evolve your use of technology by creating an environment in which you can try something out relatively quickly. If it works, you scale it. If it fails, you let it die out. The key to creating this agility is composability — ensuring that if one small experiment fails, it doesn’t affect the rest of your systems or the company.
Foundational platform thinking
A foundational technology platform should never solve just one specific business problem, even if that problem is as large as moving from legacy mainframes to the cloud. Instead, consider how the platform can be foundational to digital transformation, both near and long-term. How will it scale to solve future business problems? How does it support modularity, reusability, interoperability, and autonomy through governance?
Composability in Action
It pays to hit pause on single-problem solutions that lead to more risk down the line, such as technical debt, specialized skill set requirements, inability to incorporate future technologies, vendor lock-in, and difficulty in scaling. Instead, the goal should be to find the foundational platforms that provide continual business value. For us, that was OutSystems.
The OutSystems platform allows us to separate and rewrite the business logic from our legacy technologies, including mainframes, SAP, and other integrations, so that it works in our agile and digital environments. We use low-code to ensure we can build processes and enterprise applications that you cannot buy or reasonably build from scratch, and we do so in ways that provide reusable components that can help us scale into our digital future.
One example is pricing. Across our business, we may use pricing in five different processes, but we build it only once. This hastens development as well as builds relentless digital resilience into the software environment we’re creating in the cloud. We make one change, and it’s automatically updated in five different processes. At the same time, an issue with this single component doesn’t bring our entire system to a halt —and it’s easier to find and fix.
For the first time in 50 years, we can build applications in business logic that we never thought would be possible. We made the agile mainframe possible, going from four releases to more than 300 releases a year. From my experience, it just isn’t possible to be a digital composable enterprise without low-code development. By orchestrating our high-performance enterprise low-code applications and other digital capabilities and using incremental innovation from the core embedded into our agile development processes, we are evolving our culture and driving innovation.
Making the Shift to a Composable Enterprise
Most companies struggle with a difficult conundrum: When it comes to digital transformation, they strive for agility, flexibility, and speed to innovate and scale—while demanding reliability, predictability, and security at the same time. What they are in fact asking for, without realizing it, is a composable enterprise. I truly believe that it is the duty of any CIO to recognize this implicit need and to build a low-code-based platform approach that is future-proofed by design and hands-on by implementation.
The future of composable enterprises requires fundamentally different thinking, leadership, and strategies. Enterprise high-performance low-code must be positioned at the core of every transformation to foster innovation and digital resilience from the core of the business.
You can learn more about how to build such a strategy and surmount the organizational challenges around digital transformation in this free on-demand webinar, “Demystifying the Challenges of Becoming a Digital Composable Enterprise,” as well as in my book, Digital Composable Enterprises.