MACH Alliance brings its composable mission to B2B commerce

Phil Wainewright Profile picture for user pwainewright December 21, 2022 Audio mode
Summary:
The MACH Alliance, an industry organization promoting a composable approach to building web commerce and content sites, plans to expand its reach in the B2B sector.

Innovative contemporary smart industry: product design, automated production line, delivery and distribution with people, robots and machinery, industry 4.0 concept © elenabsl - Shutterstock
( © elenabsl - Shutterstock)

Composable technology to enable more adaptable commerce and content platforms has swept into B2C brands and retailers in recent years. Many of the up-and-coming vendors and consultancies involved are members of the MACH Alliance, an industry body formed to both promote and certify technologies that espouse the four MACH principles underlying these new platforms — Microservices, API-first, Cloud-based SaaS and Headless. Now the organization's leading members believe the time is ripe to bring its composable architecture to the B2B sector.

Fresh from a two-day meeting of the organization's executive board, four of its members sat round a table with me in London earlier this month to talk about what they're seeing in the market, why they believe B2B commerce is ready to make the move to MACH technologies and operating models, and some of the challenges the next wave of adoopters may face along the way. Many businesses selling to other businesses are encountering the same rise in digital channels and customer sophistication that consumer-facing businesses have already encountered, coupled with pressure from boards to adapt and optimize operations in the face of changing conditions. Casper Rasmussen, Global SVP Technology at digital consultancy Valtech and President of the MACH Alliance, says:

The same degree of uncertainty in retail you saw years back ... the same thing's happening to B2B. The actors are just different, like the supply chain crisis they've just met — 'Okay, we need to be able to source material elsewhere. We need to do partnerships we weren't thinking of doing historically. We just can't manage that with our current way of managing our logistics or our materials handling.'

G Vuckovic, Chief Revenue Officer at e-commerce vendor Vue Storefront, says that these pressures are fueling demand for more adaptable technologies, particularly where that investment can be shown to preserve or grow revenues. She adds:

Especially in this economy, the focus is closer to the revenue, and that is commerce. We are seeing that shift, where the areas that are not necessarily closest to how the company makes money are going to take a bit of a back seat.

At the same time, MACH technologies and vendors have now reached a level of maturity where they can provide solutions to these needs. Jon Panella, Group Vice President at Publicis Sapient, who is in charge of the digital consultancy's global commerce practice, says:

I think we've been hearing for the last two or three, four years, this ask from B2Bs. But one of the things from an inflection point standpoint is, now the ISVs and vendors' products have become mature enough to be able to address these critical points ... The technology's become mature enough to actually go in and get that kind of value, be able to do an evolutionary process to start to replace some of this technical debt.

B2B challenges

There are challenges, however, for these businesses that their peers in the B2C segment have either already overcome, or in many cases have not had to deal with. In the B2B sector, the journey to digital commerce has been slower and typically the systems currently place are either still first- or at best second-generation. Panella elaborates:

If you look at most of the B2C companies out there, they're probably on their third journey from a commerce perspective. They did something, then they moved to one of the big monoliths, now they're trying to move to a modern architecture. Where B2B, they may be on their first journey or maybe they're at the second at this point.

In addition, the sector is often less up-to-speed on the latest e-commerce technology and may find it harder to attract developers with the right skills. Tarek Nseir, Head of Digital Engagement, EMEA at digital consultancy EPAM Systems says:

In B2B in particular, there is an enormous deficit in understanding just the reality of the marketplace and the pace at which things are evolving. Also ... ability to attract talent is a huge deficit.

Nevertheless, the pace of transformation and investment in digital technology is becoming significant, he adds, and some early adopters are starting to reap the benefits. He says:

There are now an increasing number of success stories, substantial operating cost reductions in these B2B transformations, and so it does feel like the momentum is growing. The pressure in the economy really accelerates that.

Channel conflict

One challenge that consumer brands have not faced is the potential conflict between new digital channels and existing sales and distribution channels. A B2B supplier can't simply open up a new direct-to-consumer platform without carefully thinking through what its role will be. Rasmussen explains:

Don't try to just sell products through a new channel, because then it becomes a margin play and you start to disrupt and cannibalize the other revenue stream of your partners, your retail networks. Don't do it. Figure out digital services ... Make sure that it's focused on loyalty generation, it's focused on equity, relationship building, first-party data. What do you actually want to do with this consumer relationship? If the answer is, 'Sell products,' then don't do it, because it has no ground to stand on.

A big advantage of the MACH approach, these board members believe, is that it makes it possible for companies to start with a small project, see the impact, and quickly make iterative course corrections before scaling out more widely. Vuckovic says:

Companies don't necessarily know yet, what is the right model for them? How do they differentiate and not compete with their existing business model and partners? What they're really looking for, and this is where MACH is so perfect, [is] the ability to quickly spin up, spin down, to create these e-commerce experiences, and once they figure out the model, then just repeat — being able to test quickly, and then once they find the right fit, being able to scale relatively quickly.

Another challenge is the need to build new digital capabilities around existing legacy systems that were not designed for rapid change. Here, the composable ethos of MACH lowers the barrier to entry by making it possible to add those new capabilities without first doing a risky rip-and-replace of the existing platform. Vuckovic adds:

You can start in smaller chunks — you eat that elephant one bite at a time. This is exactly what we see enterprises do. They will decide what is the differentiating part of their business, or what is the most strategic part of their business, and start there ... This is what MACH allows you to do, and you can start getting ahead without such a big risk.

There are many functions that have been added to ERP systems over the years that don't perform well there and are good candidates for MACH replacements, argues Rasmussen. He elaborates:

Things that have nothing to do with resource planning, it just ended there, because five, ten years ago, they had no other place to put it. It was the mainframe, it was the glue of the organization ...

Start to take some of the capabilities out of it, the capabilities where you need to be able to innovate. Product information is a prime example of being a foundational capability behind innovation in B2B. Order management. Payment. If you start to bolt that onto your ERP, you will be slow. You need to start to augment that out and put it into a differentiating layer. Start to augment it with microservices, best-of-breed, start to decouple it, and you'll start to see magic.

New business models

Besides the technology, another challenge is adjusting to new business models and partnerships. Digital connection makes it possible to go beyond the traditional product-based relationship and create an ongoing relationship, often wrapping services around the product, focused on helping the end customer achieve better outcomes. Panella elaborates:

It's not just about products, it's about services. It's about creating that ecosystem with their partners, so that they can own the client relationship. It's not just a hand-off to someone else now.

We're working with a large tire manufacturer, and the entire way they're developing their marketplaces around fleet services and components from that perspective. You don't just come and buy your truck tires, you have a long-term relationship with that company.

Here again, the composable MACH architecture can help, making it easier to connect to partners who can supply capabilities that the manufacturer itself may not have access to, such as the ability to break out single stock items and ship them direct to customers, or to add ongoing maintenance and call-out services. Rasmussen explains:

The openness of the architecture also means that you don't need to do it all. Partnerships play a major role ... You start to federate some of those capabilities out to potential partners in the space, just out-delegate distribution, logistics, to a person or a company that is specialized in that.

So it's not just the technology you compose, it's also your operating model, where you start to identify the weaknesses you have, that you're not willing to maybe in-source or invest in, immediately. But you start to also compose even the partnership ecosystem that you work with, to make sure that you solve for it without needing to change the entirety of your company in order to enable it in the first place.

Helping companies adjust to these new ways of working and doing business is just as important as helping them to understand the underlying technology model, and this market education is a big part of what the MACH Alliance sees as its role. For companies assessing their readiness to move forward with a project, these cultural elements have as much weight as the technology. Vuckovic says:

A big part of the readiness is actually the culture ... If that's not done right, the barriers are going to be much larger to anybody else to try to actually move the needle forward.

Another mission for the Alliance is to counter the messaging from more traditional monolithic platform vendors, who are starting to expose APIs and claiming to offer composability, but without the same openness and flexibility of a pureplay MACH solution. Rasmussen comments:

We need to be able to clearly articulate ... what is composable versus what is MACH, because there is a distinct difference in how, not just the architecture looks, but how it operates and functions, how it's fluid and open.

My take

With the two terms often being used interchangeably, I think the Alliance has an important task ahead of it, explaining how MACH differs from other composable approaches. As Panella puts it, "all MACH solutions are composable, all composable solutions aren't MACH." I think you could go further and say that having a mix of microservices, APIs, SaaS and headless capabilities isn't always MACH. How the components are put together is crucial and needs to be better explained to differentiate MACH solutions from the competition.

So far, it has been relatively easy for the Alliance to spread its message because these differences are relatively well understood in the B2C commerce and content space, where concepts such as the Jamstack web development architecture pattern have blazed a trail for MACH principles. A strong cohort of vendors and consultancies has grown up with a strong understanding of the model. Moving into B2B commerce will expand MACH's reach beyond this friendly territory into a landscape where other approaches remain deeply ensconced. I see far fewer vendors already taking MACH seriously in fields such as supply and demand planning, distibution, warehousing, logistics and the various other operational disciplines that typically feature strongly in a B2B trading scenario. Extracting and managing data in a more fluid way that's better compatible with a MACH architecture is also to my mind an as yet unsolved problem.

All in all then, this group of vendors will face new challenges as it expands into B2B markets. This will be a long, hard slog. But at the same time, I think this type of architecture — I have started calling it Tierless to contrast it with the vertically tiered stacks of old — is going to be the future, so it's good to see the MACH Alliance starting out on this journey in a landscape where what it has to offer is much needed.

Loading
A grey colored placeholder image