Packaged business capabilities: IT building blocks for agile companies

Is your corporate IT slowing down or accelerating the digital transformation? Companies must constantly adapt, pick up on trends, test innovations and bring them to market. To do this, they need agile IT.

Large, cumbersome systems developed over years and decades are not helpful here; instead, the IT architecture should be service-oriented and modular. A new "IT ideal" is currently circulating in the professional world: the Composable Enterprise, consisting of Packaged Business Capabilities, or PBC for short.

What are PBCs all about? How do they differ from microservices? And what are their real benefits for IT and the entire company?

Packaged business capabilities are the software building blocks of a composable enterprise (or composable commerce in the e-commerce environment). In simple terms, this means that the entire company IT is made up of individual software components, each of which covers a so-called business function or capability. A more precise definition follows below.

PBCs stand in contrast to monolithic corporate IT, which consists of a few, large, permanently connected systems. What is the meaning behind the concept of Packaged Business Capabilities?

As with any modular system, individual components can be easily replaced; new components can be easily added. Companies can develop new functions themselves or purchase them from suppliers.

This enables so-called best-of-breed solutions: IT systems in which the most suitable solution on the market is used for each task. With complete solutions, individual parts are often not used; outdated systems continue to be operated because a changeover would be too expensive. The PBC architecture eliminates these disadvantages.

Another advantage is that all PBC components merge into a single system at the front end - employees and customers do not have to work in different systems. All digital channels - desktop, app, POS solutions, IoT applications, and so on - access the same components.

The "inventors" of the term Packaged Business Capabilities - the IT analysts at Gartner - define them as follows:

"Packaged business capabilities (PBCs) are software components representing a well-defined business capability, functionally recognizable as such by a business user. Technically, a PBC is a bounded collection of a data schema and a set of services, APIs, and event channels. The well-implemented PBCs are functionally complete to ensure autonomy (no critical external dependencies, no need for direct external access to its data). PBCs are meant to be used as building blocks for application product suites and custom-assembled application experiences."

Translated, the definition is: "Packaged Business Capabilities are software components that cover a precisely defined business capability and are recognizable as such by users. Technically, a PBC is a limited collection of data schemas and a set of services, APIs and event channels. Well-implemented PBCs are functionally complete and autonomous. There are no critical external dependencies and no direct external access to their data is required). PBCs are intended to be used as building blocks for application product suites and customized application experiences."

To put it simply again: A PBC is a software component with which users of a company can perform a specific business function or task. The function must be easy to understand for non-experts. In principle, the software must be able to run independently of the other systems in an IT environment.

Some examples of Packaged Business Capabilities:

Here you will find further explanations on modeling business capabilities.

They are not complete solutions or software suites that combine several business functions, such as: an overall solution for merchandise management, procurement and supplier management; or one for CRM, order management and payment processing.

PBCs should not be equated with so-called microservices, which are only used to carry out individual processes or subtasks, such as processing credit card payments in the online store or managing product data in merchandise management.

The concept of microservices has been known for a long time, at least to those who are marginally familiar with IT architecture. For years now, software has no longer been developed as a single, large, inflexible block (monolith), but rather assembled from individual, independent modules and processes. Why? They are easier to keep track of and can always be recombined. Errors are usually limited to a specific module and can be detected and rectified more easily. This approach is called service-oriented architecture (SOA).

Packaged Business Capabilities are generally "bigger" than microservices. Theoretically, a PBC can consist of exactly one microservice (or one process). As a rule, PBCs bundle several microservices so that all functions are available to users in order to perform a task.

An example: The PBC "Product Data Management" contains microservices for the management of product specifications, stock levels and prices.

Microservices represent a more technical perspective. IT administrators and developers use the term. It is not always clear to users exactly what a microservice does. A PBC, on the other hand, contains functions that everyone who works in the respective specialist area understands.

The PBC concept sounds abstract and technical at first. However, it offers very specific benefits: not only for IT, but also for users and management.

Flexible and scalable

As already mentioned, PBCs allow companies to freely decide on their own tech stack - in other words, to freely assemble their IT systems. They are neither tied to individual manufacturers nor are they held back by old, inflexible systems.

Ready-to-use functions

New functions can be introduced quickly; with out-of-the-box components even within days.

Lower costs

PBS can be used in different places and easily exchanged. There are no costs for duplicate or unused systems. The modular architecture also makes operation and further development more cost-effective.

Better user experience

Companies can design the entire interface of their systems harmoniously and align it solely to the needs of the users: both in the front end for customers - store or website - and the back ends for IT admins and content authors, among others.

Enables innovation and new business models

Innovations are often slowed down by slow and complex technology - rapid development steps and experiments are not possible. PBCs can be developed independently of each other. This allows new ideas to be tested quickly, MVPs to be developed or new business models to be implemented without jeopardizing the basic IT and core business.

Harmony between business and IT

Managers and stakeholders can communicate with IT and developers on the basis of packaged business capabilities: There is no longer "the business" and on the other side "the technology". PBCs describe concrete, usable functions that everyone can understand. IT understands what value a PBC brings to the company and which business goals and initiatives are to be pursued with it. This direct connection also makes it easier to measure the ROI (return on investment) of the IT systems.

A company becomes a composable enterprise when its entire IT landscape consists of PBCs. Only then can it exploit the full potential of this approach. The IT architecture required for this is described by the acronym MACH. Each of the four letters stands for a principle:

Microservicesor modularity: The entire IT system must be made up of modular components - microservices and PBCs. There must no longer be any monolithic systems.

APIs: Data must be exchanged between the individual PBCs via standardized interfaces and connections (APIs). Data must not be held twice in multiple PBCs and PBCs must not have different standards for data exchange.

Cloud-native: All PBCs should be operated in a cloud environment. This means they are available everywhere (location-independent) and at short notice (on-demand). They can be easily scaled as required and are easier to protect than in hererogeneous landscapes with on-premise and cloud systems.

Headless: Data management and maintenance (back ends) must be independent of front ends - companies generally use a headless CMS for this. This is particularly important in e-commerce and for the operation of a digital experience platform.

Some companies connect external software partners (vendors) or PBC marketplaces to their IT systems. If you need a new function, you can select it from the existing range and integrate it into your IT without a major development project.