Becoming a digital enterprise might be painful, but it's non-negotiable

This piece from Valtech was recently featured in Raconteur's Digital Transformation Report 2022, in collaboration with The Times. You can download the full report here.


The pace of change in business is accelerating. To keep up, organisations must adopt new approaches like direct-to-consumer (D2C) strategies and composable commerce. What these have in common is an emphasis on customer- and data-first thinking, and an ingrained openness to fundamental change, across both mindset and organisational structures.

Sadly, most traditional businesses find these difficult to truly embrace, despite being necessary. According to Gartner: “Composable application architecture empowers such adaptability, and those that have adopted a composable approach will outpace competition by 80% in the speed of new feature implementation.”

Those enterprises that can successfully adapt to the changing demands of digital business will thrive – those that can’t, risk falling behind. In an age of exponential growth, failing to keep up likely means failure.

If that sounds unnecessarily harsh, remember that as a species, we just aren’t well prepared for the sorts of digital behavioural change that we’ve seen in recent decades. The problem isn’t recognising change, but the speed of that change. Exponential curves make sense in maths class but when applied to the real world, they leave us baffled. Even the previous beneficiaries of such exponential growth, like the Amazons and Alibabas of the world, face disruptions as more companies bypass generic marketplaces, instead making the most of social media, gig-economy logistics and micro-finance marketplaces such as Klarna. So if TikTok caught you off-guard, imagine what might be coming a year from now – especially if you take the exponential pace of change into account.

Agility and customer focus provides the competitive edge

In the 20th century, if a company had a product worth selling it was heavily dependent on retailers taking care of the distribution. Today, customers have a huge amount of choice, little brand loyalty and can buy anything, anywhere. To be able to provide experiences that stand out from the increasing competition, brands must engage directly with their customers and capture data about their changing preferences. This is the principle behind D2C. According to global business transformation agency Valtech, going D2C can be an essential move but will only be a success when combined with a digital-first mindset.

“Your D2C strategy will fail if it’s not backed by a real dedication to become a digital enterprise. Power it with the right technology and enable it to connect with the constantly evolving new channels and you will get far. But to truly succeed, it’s essential to consolidate it with the right data strategy and customer-service functions. This allows you to leverage your input for a competitive advantage and create an organisational structure that supports your customer interactions,” says Joacim Jeppesen, Global Chief Growth Officer at Valtech.

“You must continuously use these insights to position, optimise and differentiate your product or service. All these changes require more than just new digital infrastructure or ways of working. It’s about adopting a digital- first mindset.”
Switching to a digital-first, flexible mindset across an entire business is not a straightforward process of shredding paper and letting automation rule the roost. The shift is painful because it is mindset-driven. “It will, and must, shake the core of your business,” says Jeppesen. “Outside help and perspectives on strategy and technology are needed, but the drive and motivation have to come from within.”

The power of composable technology

Fortunately, while this shift might take a lot of effort new technology allows businesses to adopt a D2C strategy while protecting themselves against shocks. This is the notion behind composable commerce.
For Mandhir Gidda, EMEA CTO of Valtech, this represents “the realisation of a movement that began many years ago with service-orientation. It’s a paradigm shift, reflecting digital thinking at every level of an organisation. It’s the ultimate expression of being able to accommodate change.”
Composable commerce allows businesses to act quickly, efficiently and proactively to pursue direct relations with their consumers and customers – both through their own and thirdparty channels. In adopting composable commerce, a business’s mindset will not only shift from focusing on projects to focusing on digital products, but it will also enable informationtechnology to deliver services instead of systems.

“Businesses that delay shifting to a more adaptable, consumer-obsessed approach will only fall further behind with every moment that they hesitate. Brands embracing the approach of composable commerce will be more able to execute digital commerce and differentiation strategies, and we predict they will leave the competition behind.”

Spearheaded by global leaders like Valtech, who co-founded the MACH Alliance, it’s the technological innovating element, providing a new way of adapting the digital landscape to the needs of a particular business and bringing all its data into one place.
“Composable commerce provides unrivalled flexibility and clarity. If your business is run by the more static technology suites, it will be like discovering Lego after only ever being able to play with Playmobil,” says Gidda. “With composable commerce’s flexible technical architecture, you can replace and improve the individual building blocks of your business. This allows each element to serve the purpose they’re supposed to in a better, more efficient way, all while providing you with the essential insight you need from all channels to make more strategic decisions.”

Composable commerce will help drive a successful D2C strategy and be a key enabler of modernising digital enterprise. With a composable foundation, businesses will naturally transition towards a digital-first mindset, as silos are deconstructed and customer data collected into a single source of truth.
There is indeed an increasing urgency to shift to digital across all aspects of a major company. Consumers aren’t waiting around.

Jeppesen says: “Businesses that delay shifting to a more adaptable, consumer-obsessed approach will only fall further behind with every moment that they hesitate. Brands embracing the approach of composable commerce will be more able to execute digital commerce and differentiation strategies, and we predict they will leave the competition behind.”

Traditionally organised businesses might have missed the chance to be first-movers in this space but no one will want to come last.