When the Tech Stack Becomes the Tech Problem

Digital transformation is usually presented as a ladder. Companies begin with a few foundational capabilities, add more sophisticated tools over time and become incrementally more efficient with each step.

But findings in the July edition of The Orchestration Advantage Series, a PYMNTS Intelligence collaboration with Spreedly, show that transformation does not always work that way. Companies with three or four core orchestration capabilities sometimes perform worse than businesses operating with only one or two, according to the report.

The problem is not that the added technology lacks value. It is that complexity can accumulate faster than an organization’s ability to manage it.

The most dangerous stage of digital transformation, therefore, may not be failing to begin. It may be beginning, investing heavily and then stopping before the systems, governance and operating model are mature enough to work as a unified whole.

The Transformation Trap Hidden in the Middle of the Journey

The PYMNTS Intelligence study, conducted in collaboration with Spreedly, surveyed 110 U.S. companies generating at least $10 million in annual revenue and examined the adoption of five payment orchestration capabilities: automated dynamic routing, frequent updates to routing logic, failover and redundancy, internal control over payment tokens, and the ability to connect with multiple payment service providers.

The performance gap between companies at the beginning and end of that journey is considerable. Seventy-eight percent of businesses operating all five capabilities reported transaction-completion gains of at least 2%. Only 7% of companies with one or two capabilities reached that threshold.

More surprisingly, just 10% of companies with three or four capabilities did so. The middle group had added technology without yet capturing much more value.

On some customer-experience measures, that same group performed even worse. Fifty-two percent of companies with three or four capabilities said payment problems generated at least 5% of customer complaints. These businesses also reported elevated checkout abandonment, suggesting that partially modernized payment environments can introduce new operational friction before they create a smoother customer experience.

The result is not a staircase. It is closer to a valley. Companies must absorb additional complexity before the benefits of an integrated operating model become visible. That challenges a central assumption behind many transformation road maps: that each new capability delivers a discrete return.

See the report: Complete Payment Orchestration Stacks Boost Revenue and Improve Customer Relationships

When More Technology Creates More Work

Technical debt is often described as the future cost of shortcuts taken during software development. In enterprise transformation, the concept is broader. It includes duplicated workflows, manual reconciliation, brittle integrations, inconsistent data, overlapping vendor contracts and controls that were designed for a simpler operating environment.

The study’s broader implication is that orchestration should not be treated as the final stage of transformation. It is the discipline that allows every other stage to generate value.

In payments, orchestration coordinates processors, routing rules, tokens, retries and backup paths. In the broader enterprise, it coordinates data, applications, controls, people and decision rights. Without that connective layer, every new capability becomes another object that must be monitored and managed.

Companies operating all five payment orchestration capabilities were 11 times as likely as those with only one or two to report checkout-conversion gains of at least 2%. Sixty-nine percent of full-stack adopters achieved payment approval rates above 97%, compared with 32% of the least mature companies.

Those gains do not appear to come from the fifth capability alone. They come from the interaction among all five.

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