Be resilient during the global financial downturn
According to a 2022 survey, business leaders around the world cited economic conditions and inflationary pressures as a “top risk” when assessing their digital growth opportunities – not only for this year but as far ahead as 2031. Geopolitical tensions, the Russian war in Ukraine, and the fallout from the COVID-19 pandemic are all contributing factors to a global economic downturn reminiscent of the 2007 financial crisis.
Amid rising costs and supply chain challenges, businesses are understandably looking toward digital solutions to increase efficiency and streamline their operations. Far from simply replacing staff, this latest push toward digitalization and automation is more about enhancing and improving processes, giving staff better tools to build on their brand’s reputation and differentiate themselves from competitors. That requires a form of digital agility that some businesses still lack, but that’s likely to change as more and more businesses – particularly those in B2B commerce – implement the composable architecture.
So what is composable architecture and how does it work? And why might it be the key to unlocking growth during a period of severe economic turbulence?
The growing need for agility in digital commerce
A global financial downturn is far from good news for businesses, but if the pandemic taught us anything it’s that those able to adapt and evolve stand a far better chance of weathering the storm. Employing digital solutions to take care of key commerce functions isn’t new. Automatic invoicing, recurring orders, stock alerts, product suggestions and tailored pricing are all commonplace in the world of B2C and B2B digital commerce. Two-thirds of customers now actually prefer digital self-service over more conventional sales channels, increasing demand for functions such as the ability to customize products on the fly, or make specific delivery requests.
But the ability to integrate these functions rapidly, seamlessly and cost-effectively into an already functioning e-commerce system is still lacking for many businesses, and that’s where the risk lies. One study cites an “acceleration gap” between the pace of change driven by new opportunity and the ability of an organization to capitalize on it. Composable architecture can help businesses to close that gap by making it easier for them to develop, test and deploy new functionality on a much shorter time scale. This has the knock-on effect of making them more resilient and more adaptable in the face of change, whether it’s adding more online functionality in the wake of a global pandemic, or streamlining their operations to cut costs during a financial crisis.
Wherever there are challenges in business, there are also opportunities. At the moment, there’s a noticeable gap between the pace at which these opportunities present themselves and the ability of organizations to capitalize on them. We saw this during the pandemic, and we’re seeing it again as a global financial downturn looks increasingly likely. Businesses that are digitally agile and able to quickly adopt new services and functions for their customers tend to be the most resilient – both in terms of maintaining a positive customer experience and also keeping their operations efficient and cost-effective. This flexibility in the face of uncertain conditions is what composable architecture facilitates.
Emporix recently commissioned a report in which top-level decision-makers from the world of e-commerce were asked about their perspectives on selecting, implementing and expanding their e-commerce operations. Around 90% said they were planning to extend their e-commerce operations in the near future, with the key drivers being reduced costs, scalability and the fear of “missing a train” if their e-commerce operations remain static. These businesses need composable commerce, though they might not yet realize it.
What is compostable architecture?
Today’s e-commerce operations require continuous improvement. Traditional commerce platforms often referred to as monoliths, don’t allow this because they’re static third-party platforms that a business invests in and uses for years at a time. New features can be requested, but businesses are very much at the mercy of
their platform of choice, and “re-platforming” can be an expensive and disruptive process. If a business wants to incorporate automatic invoicing or set up stock alerts for a client, for instance, it can’t unless its current platform allows it.
Composable architecture leaves the monolith behind and allows businesses to embrace continuous improvement. It uses a microservices architecture to allow for a modular approach to development, giving businesses the freedom to add in best-of-breed services at a pace that suits them. Software vendors around the world are catering to composable commerce by creating API-oriented tools that can be slotted in and out of various e-commerce operations. If a business wants to add real-time stock alerts, it can find the best real-time stock alert service in the world and incorporate it into its own operations. If it wants to add in better catalog management or recurring billing functionality, it can do so by developing those solutions internally or selecting a ready-made solution that already exists in the market.
By: Eberhardt Weber, founder and CEO of Emporix.