Commerce at MACH Speed: Business Benefits
In our last post we reviewed the history of online commerce systems, examined the lengthy run that eCommerce platforms have had, and looked at some of the weaknesses inherent in legacy monolithic systems that closely link back-end functions with the template-driven front-end experience.
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In our last post we reviewed the history of online commerce systems, examined the lengthy run that eCommerce platforms have had, and looked at some of the weaknesses inherent in legacy monolithic systems that closely link back-end functions with the template-driven front-end experience. If you missed this - or would just like to review - you can do so here.
We also looked at the tectonic shift underway in digital commerce currently, one that finds both new entrants as well as incumbents increasingly embracing a more flexible, modular approach that decouples backend functionality from the frontend user experience, giving developers far more freedom to innovate. While this approach, commonly referred to as “headless” (which many consider a bit of a misnomer) offers a range of technical advantages, our focus in this piece will be on the tangible business benefits that it delivers.
A major driver behind this trend is the MACH-Alliance, a consortium of enterprise software vendors and service providers, that was launched in the summer of 2020. MACH architecture - consisting of Microservices, API-First, Cloud-native SAAS, and Headless - nicely summarizes a number of current concepts in software development, focuses them on the content and eCommerce space (for now, primarily, though it applies equally to any enterprise system, including CRM, PIM/DAM, ERP, etc.), and provides a comprehensive blueprint for disrupting the status quo. MACH provides a roadmap, a vendor-independent guideline for best practices and principles, that is aligned with current market trends and the need for businesses to innovate quickly while building on a foundation that is future-proof and not tied to any one platform or technology. Let’s examine some of these needs, how MACH helps to address them, and the business benefits inherent in the approach.
COVID-19 resulted in a massive shift in consumer behavior and many businesses were overwhelmed by the sudden growth in online demand brought on by the pandemic. This exposed a lot of weaknesses in their approach to digital, largely due to technical debt they had accumulated over the years, including their legacy commerce, content management, and other systems.
These shortcomings in solution architecture have existed for years and while the pandemic may have brought them to the fore, it only exposed latent weaknesses that had been papered over for years. The reasons these deficiencies exist are manyfold. In some cases they are the result of underinvestment in digital channels in general. Some businesses simply underestimated the importance of online. Others may have budgeted correctly but made poor investment choices and opted for solutions that were simply not up to the job. The systems selected turned out to be too rigid, too hard to implement, lacking needed functionality, or simply could not scale to meet the demand for volume, speed, or resilience. Some companies may have selected otherwise great systems only to have implemented them poorly or failed to integrate them properly. Consider that enterprise solutions are complex beasts and, in most cases, there is no one single point of failure.
Companies need strong technical leadership, a comprehensive enterprise strategy, and capable, well-considered architecture and solid approach to infrastructure, Without these, common outcomes include systems that fail to deliver altogether, underperform woefully, or are prohibitively expensive to maintain and evolve. MACH architecture can help mitigate many of these shortcomings but it is no panacea and companies need to understand this and ensure they have the digital maturity needed, either in-house or through capable partners.
With this in mind let us take a closer look at some of the business benefits MACH can deliver, if employed properly.
Flexibility, Agility, and Speed
These three terms are so closely related that one might be tempted at first to almost consider them synonyms. While they are quite similar to one another, they are subtly distinct and, when applied correctly, mutually reinforcing. They also get to the very heart of what MACH encompasses, in that the four terms that make up the acronym - Microservices, API-first, Cloud-native SAAS, and Headless - all support and enable them in a similarly mutually reinforcing way.
For it is the Microservices architecture - consisting of countless distinct reusable services - that provides unrivaled flexibility, accessible to any other application via well-constructed APIs for maximum agility. Designed and engineered as a cloud-native service, these services are always on, infinitely scalable, and provide all of the back-end services that can be quickly exposed and enabled to create whatever user experience may be needed to make them accessible in record time.
If this sounds too abstract or theoretical, here’s a real world example: Imagine you’re a large general retailer, perhaps a department store, whose customers are in equal parts affluent baby boomers, staid Gen-Xers, and hip Millennials. Obviously, these three demographic segments differ greatly across income, needs, and tastes and you have seen competitor DTC brands emerge with narrow offerings that appeal to each individually, eroding your market share. Your scale gives you cost advantages and greater reach, but your brand, once your biggest asset, struggles to appeal to everyone. It’s not just the product offering that needs to be differentiated, it’s image, tone & voice, customer service, etc. Baby boomers might appreciate a customer service hotline, whereas Millennials want pay-over-time options like Klarna or Affirm. They both love shopping on their phones, but Boomers love to shop online but then try on and pick up their selection at the local store.
With MACH you can easily create three distinct front-end experiences, each completely different, all connected to the same backend and leveraging the same - or different - services for payments, fulfillment, order tracking, returns, and more. What’s more, you can create targeted offerings - even launch new brands - that are focused on interest groups that transcend generational bounds, say outdoor adventurers, fitness buffs, yoga enthusiasts, or pet owners. It truly is commerce at MACH speed.
Time-to-Market and Time-to-Value
While traditional monolithic commerce solutions may offer some advantages in quickly getting up and running initially thanks to prebuilt, templated front-ends, this is soon negated by the rigidness and lack of differentiation inherent in these platforms. These shortcomings become more glaring - and far more expensive to overcome - when you need to make changes to your checkout process, want to implement more creative and effective approaches to cross- and up-selling, or need to implement a new payment option, such as emerging pay-over-time services or a different payment processor. Things get really hairy if you want to explore social selling, have product variants or bundles that don’t fit into the platform’s structure, or need support for subscription services or complex promotions.
So essentially, you trade fast implementation using a cookie-cutter approach that gets you up-and-running quickly for flexibility in how you go-to-market and the ability to create a differentiated, unique customer experience. And, while you may be able to overcome some of these limitations by writing custom code, doing so will require a lot of time and money, negate the benefit of the platform, and will likely “break” with the next release cycle, thus requiring even more effort, time, and money to fix and maintain.
Ease of Integration
One of the benefits of standardized platforms is that they often offer pre-built integrations to a number of services and other connected applications, ranging from third-party logistics and fulfillment partners, translation companies, payment processors, CRM platforms, and more. Hence, while many of these platforms were not designed to be easy to integrate and often rely on proprietary APIs and their own data structures, many users overlook this because they expect they won’t have to do the work.
The problem is that these standard pre-built integrations are just that: standard. Need some custom fields added? That could be tricky. Your process flows or message orchestration are unique? That’ll cost you. You’re on the latest version of your CRM platform but two releases behind on your commerce solution? That’s not gonna work.
Modular, API-first systems always use the same methods to communicate, whether it’s with another part of the system or a third-party solution of a service provider. And cloud-native SAAS solutions are by definition always on the latest release, thanks to continuously applied updates and fixes.
Avoiding Vendor Lock-In
Anyone who was working in IT in the 1990s remembers the heyday of vendor lock-in. And few of us would have anticipated this problem still existing 20+ years later. But, in fact, in many ways it has gotten worse. Or, at least more egregious. And costly. While still being equally annoying.
Early in my career I recall annual maintenance for licensed software installed on premises (really the only option back then) to be around 12-17% annually. Today, 22-25% is not unheard of. Think about that for a moment. Most enterprises are paying almost a quarter of the already very high initial licensing cost in annual maintenance. And all this gets them are regular updates, patches, bug fixes and access to new versions when they are released. Talk about running just to stand still. No wonder legacy enterprise software vendors love the vendor lock-in effect and annual maintenance is a huge part of their overall revenue.
With the emergence of SAAS many enterprise software vendors have had to adjust their pricing model, replacing the traditional upfront license costs plus annual maintenance fee with a monthly, annual, or quarterly SAAS fee, while moving the solution from on-prem hosting to the cloud, while changing little else. Of course, this approach falls far short of what is needed but, on the surface - and thanks to some clever marketing (buzzword-enabling) and some minor tweaks - suddenly everyone has cloud-based, SAAS solutions on offer.
And, while upfront licensing and annual maintenance costs do not exist for SAAS platforms, vendor lock-in clearly does. Migrating from any legacy monolith platform will prove hugely disruptive, expensive, and risky, regardless of how and where it is hosted.
This is far different for MACH solutions, whose API-first microservices architecture allows for maximum flexibility and a true best-of-breed meritocracy across all functional areas of a complete solution. Compare this to the all-in-one monolith platform approach that inevitably forces users to accept mediocrity in some areas in return for the initial convenience and perceived simplicity of a “complete” solution suite. With MACH, swapping out features and functionality - an emerging payment provider, a new promotions engine, or customizing process flows - is far simpler and can be done without affecting the rest of the system.
Future-Proof to Reduce TCO
This modular approach provides flexibility while also allowing for a true best-of-breed solution. More importantly, it decouples core functionality and back-end processing and integration from the front-end user experience, allowing users to experiment with different process flows, conduct A/B testing efficiently, and reducing system dependency on any one component or service. This modularity also future-proofs the overall solution by allowing users to make incremental changes and upgrade or replace certain select components or services as needed.
A decoupled microservices architecture connected via well-documented APIs therefore not only breaks the hugely disruptive and costly upgrade cycle that results from monolithic platforms, but it also allows you to conduct business your way and on your timetable. The benefits include greater flexibility, more control, as well as greatly reduced total cost of ownership.
Sounds Good - What Will It Take?
The case for a modular API-first approach like MACH is compelling, both from a technology as well as business benefit perspective. But is it right for me and my business, you might ask? Perhaps your IT operation isn’t all that strong and your overall digital maturity level across the enterprise is only moderate. To be sure, some of the requirements of embracing these concepts are not trivial and, as with many things in enterprise technology, there are risks.
But consider this: if you’re considering a change to your eCommerce or content tech stack, does it make more sense to bet on the future or safer to invest in technology and architectures that are on their way out? And, just as MACH affords you greater agility and flexibility when evolving, it also allows you to transition to it gradually. Moreover, you’re not going it alone. As with any significant technology change, you should ensure you have strong, experienced, and competent partners by your side. And luckily, there are literally hundreds of vendors and service providers, including Salsita, enthusiastically embracing this new approach and ready to support you.
Our next post in this series will provide you with some concrete, actionable advice on how to prepare for, seek out partners, and ensure the transition happens smoothly. And gradually, if that makes sense for you. We’re big believers in a crawl-walk-run approach and MACH is inherently suited to this, allowing you to transition gradually, step-by-step, thereby limiting your risk while ensuring your investments made are aligned with the benefits and payback realized.