Why MACH Technology Matters to your CFO
In a recent post, we broke down every component to consider when calculating the Total Cost of Ownership (TCO) of a MACH-based architecture. Today, we’re going to discuss how the structural aspects of MACH-based architecture should appeal to even the most cost-conscious person in your company: the CFO.
Composable equals investment over time
When you consider the various components of MACH (Microservices, API-driven, Cloud-native SaaS and Headless), you’ll find that it’s these independent architectural elements that can increase the flexibility, scalability and agility of your platforms. A shared characteristic among these elements is that they are composable. In other words, companies have the ability to build applications from their component parts over time.
Unlike with monolithic enterprise solutions, companies can implement composable applications in stages, which means that the investment can be staggered. With a monolithic system, the total investment is required at the outset, meaning that the CFO is going to have to write a really big check. With composable systems, however, that investment can track along with the success—and return on investment—of the initial projects. Because you’re only “buying what you need,” it’s simply better for your cash flow. Besides, SaaS contracts typically don’t lock you in to set spending the way other software licenses do.
According to James Anderson, research director at Gartner, decision makers like the CIO should focus on their entire tech stack to ensure that it’s meeting the company’s financial objectives:
“The portfolio is very important. It clearly showcases the vision and strategy of the CIO regarding cost reduction and its results within the business. It moves the CIO and IT from speculating what the savings could be to demonstrating a foundation of real savings. In the end this vision matters to many stakeholders, including the CEO and the CFO.” 1
Speed-to-market and flexibility
Compared to monolithic technologies, MACH-based architectures require much shorter implementation times, which means that you’re saving money on resources. Many SaaS products can be implemented in hours or days as opposed to months or even years. This means that you’re freeing your tech resources to work on their other responsibilities. In other words, their day jobs. Additionally, MACH systems are much more flexible so they allow for incremental upgrades. The beauty of this approach, as described above, is that you’re paying for services as you use them over time, there’s no wastage. This applies to resources as well as fees so you’re deploying your company’s assets only when they’re likely to demonstrate a return on investment in short order. That should make your CFO smile.
Of course, speed-to-market isn’t just about saving money. It’s driven by the competition. Companies that are hitched to monolithic applications don’t enjoy the speed and flexibility offered by MACH-based architecture and are at risk of losing their competitive edge. As Gartner research director James Anderson, says:
“It’s not looking at what’s in the ‘IT budget’, but at all of those things across the business that can be influenced by IT, which is just about everything. If you’re not on the innovation end of trying to fund digitalization of your business, it’s likely some other company is coming up with some type of an optimization technology to eat your revenue.” 2
Innovation has an additional impact on any organization when it comes to hiring the best tech resources. Developers are drawn to innovation so if your company is focused on managing legacy monoliths, you’re going to have a challenge attracting top talent.
Swapping major CapEx investments with more manageable repayments
With retailer budgets currently reduced by lower revenues and uncertainty about the economic outlook, “as a service” models are appealing. Rather than rip and replace all of your technology, you can now deploy just what you need at the right time for you and pay on an ongoing, regular basis. This gives the major benefit of not having massive upfront investments and instead managing a more moderate regular payment, with the potential to access technology upgrades as they become available.
MACH: Business Technology for 2020 and Beyond
”66% of developers find that maintaining and “paying for” technical debt (aka the money, flexibility, and opportunity lost to a bad technical investment) associated with outdated technology is bad for their productivity at work." State of the Developer report 2109, Devada