Microservices vs. Monolith: Why Modular Wins in Digital Transformation and Business Process Automation

The goal of every organization (besides financial or impact goals) is constant improvement. Survive what changes. In the modern world, one of the most influential areas for change is digital transformation. When an organization embarks on a constant process of digital transformation it should make decisions at every turn. And one of the most important decisions is how we design an organizational “operating system”.

For the sake of this article, let’s define “organization’s operating system” as a set of services and solutions that ensure the organization’s operations. When designing an architecture of the business operating system there are two main approaches:

1. Monolith Approach
2. Modular Approach (Microservices)

Imagine your business as a large factory. You have different departments like manufacturing, packaging, and shipping, all working together to create and deliver your product.  Now, let's look at how software systems can be structured to support these departments, using the factory analogy:

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Monolith Architecture

• One giant machine. Think of a monolith as one massive machine where all departments are tightly interconnected and operate as a single unit. If one part breaks down, the entire machine stops.
• From a business perspective. This is like a traditional, hierarchical organization where departments are heavily interdependent and changes in one area can have ripple effects throughout the entire company. This can lead to slowdowns, inflexibility, and difficulty adapting to market changes.

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Microservices Architecture (Modular Approach)

• Independent workstations. Imagine each department having its own dedicated workstation with specialized tools and processes. They can work independently and communicate with each other when needed. If one workstation malfunctions, the others can continue operating.
• From a business perspective. This is like a modern, agile organization where departments have more autonomy and flexibility. They can operate independently, adapt to changes quickly, and use the best tools for their specific tasks. This leads to faster innovation, increased efficiency, and improved resilience.

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Let’s review some key differences between Monolith and Modular approaches

• Structure
  
  • Monolith: Single, unified system
  • Microservices: Collection of independent services
• Business Analogy
  
  • Monolith: Traditional, hierarchical organization
  • Microservices: Modern, agile organization
• Flexibility
  
  • Monolith: Limited, changes impact the entire system
  • Microservices: High, individual services can be adapted independently
• Scalability
  
  • Monolith: Difficult to scale individual components
  • Microservices: Easy to scale specific services based on demand
• Resilience
  
  • Monolith: Single point of failure
  • Microservices: Failures are isolated, minimizing disruption
• Innovation
  
  • Monolith: Slow and cumbersome
  • Microservices: Fast and agile
• Technology
  
  • Monolith: Limited to a single technology stack
  • Microservices: Freedom to choose the best technology for each service

By now, you probably already have a feeling that monolithic architecture might be a very cumbersome and expensive solution, especially in the long run. It puts a lot of pressure on IT teams that need to support business units with new requirements and, at the end of the day, it is almost impossible to change without throwing away everything that has been built and replacing it with a new, modern monolith (that you will need to throw away again in 5-10 years). It is also very difficult to keep the monolithic architecture compliant with constantly changing regulations.

Microservices architecture, on the other hand, allows your organization to be agile and adapt very quickly. You don't need to rebuild everything if a change is required; you can just take one service and either improve it or replace it with another one, a more modern one.

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The heart of the microservices architecture

But one might ask how multiple systems, often from different vendors, will work together. And this is the main aspect of building a modular architecture. Every single service should be able to communicate with each other, sending and receiving data, triggering action, or responding to triggers from other systems.

Nowadays, the vast majority of solutions have an API (Application Programming Interface) allowing one service to talk to another. And it is much easier than it seems to create an API connection between different services than to try to build all the features that you need into one.

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A Practical Example of Microservices in HR and Sales

Here are a couple of good examples of how modular architecture works in the case of the Avokaado Operational Intelligence Platform. 

Avokaado implementation for HR team

In one of the recent implementations, the Avokaado Operational Intelligence Platform was implemented as the main document and workflow management solution for the HR team. As Avokaado integrates easily into any architecture that is built based on microservices, the HR workflow was implemented within a month. Here is an overview:

1. Candidates are tracked in Teamtailor (ATS service) by the HR team. But Teamtailor lacks document management and other features, and it doesn't make sense to build them in.
2. When a candidate reaches the “Job Offer” stage, Teamtailor triggers an action in Avokaado via API to create an official proposal. A proposal is created and shared automatically with a candidate and relevant team members.
3. When the candidate approves the job proposal created in Avokaado, it triggers automatic employment agreement creation and also moves the candidate to the “Employment Agreement” stage in Teamtailor (again, automatically, via API).
4. All relevant signers and approvers are added to the employment agreement, and it goes into the negotiation and signing process.
5. When the employment agreement is signed by all parties, Avokaado triggers a new user creation process in the BambooHR system (HRIS service) automatically, assigning the right position and other relevant information. It also moves candidates into the onboarding process managed by BambooHR.

Even in this simple example, you can see three different systems (services) involved in the process. Having all these systems built as a monolith might seem to be much more logical, but it will put you under pressure to deliver the user experience and functionality each of those solutions provides. Also, in this case, replacing any of the solutions above won’t be a big challenge; all you will need to do is set up data exchange between different systems, and other systems will keep working as they were.

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Avokaado Implementation for the Sales Team

Let’s take a look at another example where microservices architecture allows sales teams to improve their processes significantly without changing their core system (Salesforce in this case)

1. All deals are being tracked in Salesforce with all the customer and deal data. As Salesforce is highly flexible in configuration and data exchange but not that keen on document management, we connect Avokaado Operational Intelligence Platform.
2. When a deal reaches the “KYC” (Know Your Customer) stage, it triggers the KYC form in Avokaado. The form is being created automatically and shared with a potential customer (that comes from Salesforce via API) and relevant team members.
3. The customer fills in the form in Avokaado with all the checks built-in. When the form is filled, responsible sales team (and legal team) members can review and approve the form to proceed to the next stage.
4. When the KYC form is approved, it triggers the next deal stage in Salesforce. In this case - Service Agreement. It also automatically creates a service agreement draft and shares it with the customer and a sales team member.
5. When the service agreement is signed by all parties, it triggers the Salesforce deal into the “Closed Won” stage.

This is another example of how microservices architecture can support digital transformation and process automation without impacting the core solution of a sales team (in this case).

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How to Transition to Microservices

If you're considering making the switch to microservices, there are a few things to keep in mind.

First, you need to identify the different business functions that your application performs. Each of these functions can then be implemented as a separate microservice. Basically, for candidate tracking in HR, you can use ATS services like Teamtailor, but for document management, Avokaado.

Second, you need to choose the right technology stack for each microservice. There are many different solutions that can be implemented under microservices architecture for every business function. So it's important to select the ones that are best suited for your needs.

Finally, you need to design your microservices so that they can communicate with each other effectively. 

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Conclusion

Microservices architecture offers many benefits over monolithic architecture, including improved scalability, resilience, and flexibility. If you're looking to modernize your business applications, microservices architecture is a great option to consider.

Avokaado Operational Intelligence Platform is designed perfectly to be implemented into a modular architecture of any organization to help automate and manage documents in HR, revenue, legal, procurement and other functional areas to achieve complete transparency and compliance in our operations. Book a demo to learn more!

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