Composable Enterprise: Not Just a Question of Technology for Telcos

Although it is frequently considered just a technical and infrastructure initiative, transforming it into a composable enterprise affects the entire company. People need to remember how important the human factor is for the success of such digitalization initiatives. Only if employees actively support and use the new technologies can they fully exploit their advantages. Ensuring acceptance requires early and consistent change management on the path to an agile organization, the composable enterprise.

Trend: Composable Business

In 2022, a company or brand’s appearance is increasingly determined by the software used in the background. The software is crucial not only for how the company presents itself publicly but also influences the company’s ability to anticipate market dynamics and the behavior of customer groups with confidence, and it determines the company’s flexibility to align internal processes and quotation structures with these in a timely fashion.

In order to be fit for the future in this regard, the current trend in the telecommunications industry is the transformation of a company into a composable enterprise. Here, an agile business model is mapped based on a flexible, cloud-based architecture concept incorporating legacy systems. If you make this a reality, it quickly becomes apparent that composable business requires not just an essential change in architecture and technology but also in how leaders and employees think.

Focus on the People

“If you want to build a ship, then don’t just drum up people to gather wood, assign tasks, and divide up the work; instead, teach them the longing for the wide, endless sea” is a familiar project management quote that fits this situation precisely. So that employees go along on the digital journey, they must develop a basic understanding of the company’s business goals from the very beginning. This can only succeed with early change accompaniment that makes the benefits of the composable business clear and palpable to each individual.

In addition, companies must create motivating inspiration for their employees. One way is to empower them to actively help design upcoming change processes and be responsible for them – away from micromanagement, toward more improvisation, creativity, and intrapreneurship. Flexibility, learning, and team spirit are in the foreground here, not the fear of making the wrong decision.

Corporate Values and Culture

Jacques Lang, French social democrat, said in 1981 about Jean Monnet, one of the pioneers of European unity: “If he could begin building Europe again, he would start with the culture.” All people at a company are embedded in a cultural environment. This can either motivate and empower them to do new things, or it can slow them down. Without a positive and encouraging corporate culture, achieving a transformation is challenging. Important here is the clear definition of entrepreneurial values. Since culture grows from top to bottom, the spirit of such a transformation must begin in management and be exemplified there consistently. Values such as respect, openness, collaboration, and trust in employees are essential building blocks for the implementation of a composable enterprise.

Management must, especially in the quickly changing telecommunications market, be open to new ideas, even if these seem to contradict the current business strategy. Making companies fit for the market for the next 20 years is not just the goal of strategic corporate management but also of all employees. Taking employees along during change processes and not just delegating these processes is the main task of change management. A company that masters this discipline and is in a position to productively examine itself without resting on its laurels will succeed competitively in the medium and short term.

The Path to Success

According to the insight that digitalization initiatives are complex socio-technical systems that must be facilitated, there are additional stumbling blocks that must be examined. For example, does it make sense to transform all areas of a company immediately down to the last detail? What’s best? According to the motto “don’t try to boil the ocean,” you should start with the process that is currently creating the most problems. This frees up resources for the next transformation step. For the composable enterprise, in practice, this would mean initially specifying guidelines for a target architecture and then taking digestible steps along these parameters in synch with the company’s agile transformation. Here, the successful transformation of each area fuels the motivation for the conversion of additional corporate units.

Strategically, it’s essential here not to lose sight of a comprehensive digital transformation. Keeping the big picture in view does not contradict a step-by-step procedure, for all areas and activities must strive for this global goal in the end. This way, it is easier to prioritize which measures are truly important and which are ineffective in the long term due to lacking integration into the whole concept.

An excellent practical example of a composable enterprise is the German mobile phone provider Congstar. To better meet current requirements, on the one hand, the architecture of the e-commerce and sales solution was converted from monoliths to an enterprise application based on complex microservices; on the other hand, the organization and structure of the development teams, which work entirely in an agile cross-functional style, were redefined.

Smart Incentives

Motivating employees in the long term to become micro-entrepreneurs at their own company is not a trivial undertaking. The set-up of a think tank tool on the intranet might be conceivable where anyone can submit ideas at any time, or the organization of a company-internal innovation competition, which in addition to public recognition, promises incentives in the form of bonuses or vacation time if innovation is implemented. Such innovation competitions usually reveal that the potential of a group is greater than the innovative spirit of the individual. It’s not an accident that most innovations result from combinations of ideas. This is how telecommunications providers can significantly increase their own power of innovation.

Incentives in the form of a direct payment can be based on a reward system, which in turn is based on corporate KPIs. This has many advantages – for both employers and employees. The model can be adapted flexibly by considering costs and revenue. Companies show their appreciation of their own employees by allowing them to participate directly in the company’s success. In turn, this increases the employees’ motivation to positively influence corporate results.

Beyond the ‘hygiene factor’ money, there are other ways to increase employees’ satisfaction and motivation. For example, regular trainings usually encourage a greater degree of loyalty and productivity. Here, ideally the focus should be on concepts, methods or patterns rather than on frameworks or programming languages, since the latter always require lifelong learning as a result of constant, rapid change. So that developers can work in composable fashion, they must understand what distinguishes sophisticated architecture. In which language the architecture is programmed is less important.

Conclusion

Succeeding on the path to the composable enterprise requires a reset of a company’s complete mindset in addition to technical reorientation. Employees and leaders must bid farewell to the familiar, be ready to learn new things, and identify with the digitalization initiative. Here it is important that all change steps, from strategic planning to development of the corporate culture, to operative work are designed so they are participative and agile. Only this way can successful experiences, alternatively in the form of active co-design, recognition, personal development, and money, be possible for every employee. It is also well-advised to proceed in sensible steps and be prepared to reflect on each individual step after the fact in order to guarantee that you are working, now as before, toward the goals set.

The basis of all of these changes is professional change management, which produces an agile company. Nevertheless, frequently the necessary expertise and free resources are lacking at telecommunications companies. External consultants can resolve this bottleneck. One of the greatest benefits is their neutral examination of internal processes without bias and knowledge of the company’s history. Incorporating change management into projects early and in structured fashion supports both the achievement of goals and the accompanying organizational change. The result is motivated employees who employ agile thinking to face future challenges and a company that is well-positioned for additional digitalization projects.

About the Authors

Uwe Ritter

People at Work Systems AG – Executive Board and COO

Uwe Ritter can look back on more than 35 years’ IT experience. After completing his computer science degree in Ulm in 1983, he worked for two years as a development engineer at Dornier System GmbH in Friedrichshafen. After that, he joined Nixdorf Computer AG in 1985; he remained there in international marketing for Unix systems and as Director of the international Targon support until 1990.

From 1990 to 1996, he built up the technical marketing department at Oracle Deutschland GmbH. In 1996, Uwe Ritter was a founding member of Siebel Systems Central Europe. During his first years there, he was responsible for establishing sales support and marketing activities; then he took on various management positions in Siebel product marketing and was finally responsible for Siebel’s entire technology basis as Executive Director. At the beginning of 2004, Uwe Ritter joined People at Work System AG as shareholder and chair. He is responsible for the areas of products, consulting, and development.

Steven Bailey

AOE GmbH – Chief Strategy Officer

Steven Bailey has many years of experience and expertise in the digital transformation of international companies and the development of their business and IT visions. As Chief Strategy Officer at AOE, he is responsible for business development and customer support in the digitalization and omnichannel e-commerce strategies sector. A focal point of this work is the development of B2X transaction portals and mobile solutions that allow companies to map new business models and generate long-term revenue streams. In addition to learning programming languages, AOE Academy offers developers the opportunity to acquire conceptual knowledge in an agile environment.

The customers they support include the entire spectrum of industries – from large and retail companies to telco, aviation, automotive, and industry, on through to life science.

The native British citizen has more than 20 years of experience in international brand communications and has received numerous corporate design prizes. Bailey is also responsible for the idea and concept of the recently published telco trendbook “4 Steps to composable business.”

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