1、Nisha BhandareQuick Answer:What Is a Composable FinanceTechnology Architecture?Gartner for FinanceGartner,Inc.|G00774760Page 1 of 8Quick Answer:What Is a Composable Finance Technology Architecture?ID G00774760-5 min readNisha BhandareInitiatives:Digital Technology in FinanceOrganizations strive to b

2、e more adaptive to dynamic businessenvironments by applying composability in their technologyarchitecture.However,many CFOs are unclear on whatcomposability means.This Quick Answer describes whatcomposable architecture is and its distinguishing features.Quick AnswerWhat is a composable finance techn

3、ology architecture?A composable finance technology architecture organizes finance technologiesinto modular application building blocks that deliver well-defined financecapabilities in support of specified business outcomes.It is a framework for finance to maximize its ability to build,assemble andre

4、assemble capabilities to rapidly respond to market disruption and businesschanges while being resilient.There are two core components of a composable technology architecture:composable applications that deliver a specific finance capability andcomposable platforms that group strategically related fi

5、nance capabilities.Gartner,Inc.|G00774760Page 2 of 8More DetailDigital transformation is top of mind for finance.1 CFOs are continuing to increase theirinvestment in technology to achieve greater scalability and lower operating costs whilelooking for innovative ways for their function to adapt and r

6、espond to business needs.However they are impeded by their current technology architecture,which houses large,complex and siloed systems.This architecture slows digital solution delivery,making itdifficult for finance to respond to changing business needs in an increasingly dynamicbusiness environme

7、nt.Composable architecture an emerging technology architecture that increasesmodularity and flexibility is gaining traction among finance leaders.Composable finance technology architecture organizes finance technologies into modularapplication building blocks that deliver well-defined finance capabi

8、lities in support ofspecified business outcomes.These application building blocks may be either purchasedor developed in-house and are organized within composable platforms connected by APIsto the broader enterprise technology architecture.The technology architecture that enables the composition of

9、these modulessupports:Flexibility To standardize capabilities where finance should,and innovatewhere it wantsModularity To enable a specific finance capability and drivesimplification in the technology architectureAutonomy To enable platforms to evolve rapidly and finance to quicklycompose new proce

10、ss flows and experiences without disrupting otherplatformsAdaptability To support the creation of new finance capabilities andsupport dynamic business eventsGartner,Inc.|G00774760Page 3 of 8Distinguishing Between Traditional and Composable Architectures“The greatest danger in times of turbulence is

11、not the turbulence;it is to act with yesterdays logic.”Peter Drucker,management consultantTo adjust and flourish in the face of uncertainty and opportunity,CFOs must begin toreinvent their traditional thinking.Unlike in a traditional technology architecture,wherepreference is given to large systems

12、or a single technology vendor,the core ofcomposable architecture is modular technologies that enable specific finance capabilities.In a composable technology architecture,finance can quickly build new capabilities andenhance existing capabilities by assembling modular composable applications.Innovat

13、ion in technologies such as cloud applications,embedded AI and APIs alongwith concepts like agile development are making it possible to be more modular intechnology architecture.This modularity enables finance to select stable applications forstandard capabilities,such as transaction processing,whil

14、e driving new capabilitiesthrough innovative applications such as AI.Gartner,Inc.|G00774760Page 4 of 8Table 1:Differences Between Traditional and Composable Technology ArchitecturesSource:GartnerComponents of a Composable Finance Technology ArchitectureThere are two core components of a composable a

15、rchitecture:Finance organizations need to apply the following three principles as they are buildingtheir composable platforms(see Figure 1):1.Grouping Within each composable platform are groupings of strategically relatedcomposable applications.For example,the AR platform comprises related financeca

16、pabilities such as AR visibility,collections strategies and cash applications.ScopeTraditional ArchitectureComposable ArchitectureBuilding blockPlan and build large andcomplex systems thatsupport multiple businessprocesses.Plan and build modulartechnologies that enable aspecific finance capability.V

17、endor preferenceStick to one vendor.Select the best-fit vendor.Deployment approachStandardize all financecapabilities and underlyingprocesses.Standardize commoncapabilities,differentiatevalue-added capabilitiesand innovate through newcapabilities.Change through technologyStrive for stability.Assume

18、variability anddisruption.Composable applications A composable application represents a unique financecapability(such as building an annual financial plan,managing the close processand managing capital investments)and is the building block of a composabletechnology architecture.Composable platforms

19、A composable platform is a group of composableapplications that have related finance capabilities.Gartner,Inc.|G00774760Page 5 of 82.Granularity The granularity of a composable platform is based on how financecapabilities are consumed.For example,in the close process,controllers typicallyconsume mos

20、t close capabilities(such as consolidation,reporting andreconciliation)together to complete their end-to-end workflows.On the other hand,incertain industries(such as the healthcare industry),customer billing may bemanaged by different finance users or functions;hence,customer billing platformsand AR

21、 platforms will be distinct composable platforms.3.Autonomy To enable platforms to evolve rapidly and finance to quickly composenew process flows and experiences without disrupting other platforms,composableplatforms should be self-contained,with minimal dependencies across otherplatforms.For exampl

22、e,though data will flow across period closing and planningand budgeting platforms,each platform should be sufficiently autonomous.Thisautonomy will allow finance to independently enable new capabilities,such asscenario modeling in planning or anomaly detection in closing,without disruptingother plat

23、forms.Figure 1:Principles of Composable PlatformsGartner,Inc.|G00774760Page 6 of 8Key Benefits of a Composable Finance Technology ArchitectureOrganizing the finance technology architecture into composable platforms provides CFOswith the following benefits(see Figure 2):1.Modular technologies that br

24、eak down the traditional architecture of complex andlarge systems into building blocks enabling specific finance capabilities2.Flexibility of governance within composable platforms so organizations can drivestandardization where they should and innovation where they want3.Autonomy that protects the

25、integrity of each platform,enabling organizations tosafely make changes without interrupting other platforms4.Adaptability to enable faster creation of new finance capabilities and supportdynamic business eventsFigure 2:What a Composable Finance Architecture EnablesGartner,Inc.|G00774760Page 7 of 8H

26、ow to Begin With ComposabilityComposability is an evolution rather than a revolution.It is an enhancement to your current technology architecture,not a replacement.Introducing composability enables CFOs to make decisions about where and how to invest in technology,which will generate a faster and ag

27、ile response to emerging business needs.Start small,and expand composability incrementally.Identify which parts of your organization change quickly and often,as they are most likely to significantly benefit from composability.Applying composability incrementally will allow CFOs to demonstrate its va

28、lue and train their teams.Promote composable thinking to new technology investments by applying the right level of governance,as detailed in our research Drive Agility by Deploying a Composable Finance Technology Strategy.Even a limited investment,when paired with composable thinking,will provide a

29、notable improvement in resilience,adaptability and readiness to changeEvidence1 2022 Gartner CEO and Senior Business Executive Survey.This survey was conducted to examine CEO and senior business executive views on current business issues and some areas of technology agenda impact.The survey was cond

30、ucted from July 2021 through December 2021 with questions about the period from 2021 through 2023.One-quarter of the survey sample was collected in July and August 2021,and three-quarters was collected in October through December 2021.In total,410 actively employed CEOs and other senior executive bu

31、siness leaders qualified and participated.The research was collected via 382 online surveys and 28 telephone interviews.Gartner,Inc.|G00774760Page 8 of 8 2022 Gartner,Inc.and/or its affiliates.All rights reserved.Gartner is a registered trademark ofGartner,Inc.and its affiliates.This publication may

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35、 and Objectivity.Gartner,Inc.|G00774760Page 1A of 1ATable 1:Differences Between Traditional and Composable Technology ArchitecturesSource:GartnerScopeTraditional ArchitectureComposable ArchitectureBuilding blockPlan and build large and complex systems thatsupport multiple business processes.Plan and

36、 build modular technologies that enable aspecific finance capability.Vendor preferenceStick to one vendor.Select the best-fit vendor.Deployment approachStandardize all finance capabilities and underlyingprocesses.Standardize common capabilities,differentiatevalue-added capabilities and innovate thro

37、ugh newcapabilities.Change through technologyStrive for stability.Assume variability and disruption.Position your organization for success.Explore these additional complimentary resources and tools:ResearchGuide to Building a Finance Technology RoadmapUse this five-step guide to set a clear digital

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