Understanding the Potential of Data-Driven Value and Composability

Analysing Technological Platforms in the Industrial Sector 

n a recent international study conducted by IFS and Boomi, with the collaboration of leading IT market research firm IDC, it was found that companies are not taking full advantage of transformational capabilities and insights.  

This missed opportunity is attributed to a combination of outdated technology platforms and a lack of board-level understanding of the crucial role of composability in unlocking enterprise data.  

The study surveyed more than 1,000 C-level respondents from a variety of industries in 12 countries, including manufacturing, energy and utilities, aerospace and defense, construction and engineering, telecommunications, and services, in December 2023. 

Challenges and Obstacles in Overcoming Market Turbulence 

Although most companies believe they have successfully weathered the disruptions of the past three years, companies highlighted challenges such as working capital and inventory imbalances, demand volatility, and unpredictable supply chains.  

Legacy applications, lack of integration, and rigid/monolithic applications were identified by respondents as obstacles impeding their efforts and affecting the efficiency of risk mitigation, highlighting the potential costs associated with these limitations. 

Organizations face the challenge of realizing value in a comprehensive way, but they face significant obstacles. Lack of understanding by executives and boards (54.5 percent) of the value of composability and insufficient progress on the path to the cloud (50 percent) are the main obstacles.  

In particular, the CIO and CTO emerge as the main proponents of composability in overcoming these challenges. 

The Need for a Composable Strategy and the Impact of the Cloud 

The research reveals both the causes and consequences of outdated technology platforms, highlighting the negative impact of departmental silos and the continued lack of data visibility. This limitation means that companies are forced to use their data for long-term planning, posing a significant threat to business agility and responsiveness to future disruptions. Alarmingly, more than 40 percent of organizations do not have a composable strategy, thus risking stagnation and accumulating technical debt.  

While the C-suite, which includes people with business and functional responsibilities, demonstrates a solid understanding (over 70 percent) of the value of a composable architecture, the board lags behind with only 19 percent clarity on its value.  

This signals a critical need for training and presentation of clearer business cases that outline the value in the short, medium and long term. 

Advantages and Benefits of Modularity in Business Operations

The study identifies supply chain, procurement, service and customer support as the main areas that can benefit from modularity. In addition, customer experience and scalability to new business opportunities were highlighted.  

The overall message for executives is clear: To remain competitive, promote agility, and improve the productivity of their organizations, it is essential to embrace modularity. Achieving rapid value realization requires a strong data foundation and a mature cloud strategy as prerequisites for the adoption of advanced technologies.  

Failure to move to an Integrated Cloud System or formulate a clear composability strategy will likely prevent organizations from exploiting the full potential of AI and Machine Learning technologies, hindering benefits such as cost reduction, faster time to market, improved business planning, greater agility and risk mitigation.

Vision and Leadership in Technological Change

Alex Rumble, SVP Product Marketing and Corporate Communications at IFS, commented, “In most industries, the move to the cloud has taken considerable time to take effect. For many organizations, security and the impact of the change on the business were important considerations. Composability is different in that the end state is not about the technology, but about the merging of data that will accelerate the exploitation of AI and the realization of business value faster, with benefits in terms of speed of innovation and time to market, enterprise-wide efficiency and increased productivity of people and resources.” 

Rumble continued: “Composability is a data-driven play that enables agility and medium- and long-term planning, whether it’s investing in assets in the field, planning for investments in factories, or pursuing new revenue streams. The positive news is that functional and operational leaders recognize the transformational impact and now need to ensure board-level education and a change in mindset in the dependency between composability and AI.” 

A webinar between IFS, IDC and Boomi delves into the findings and is available here.