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01.30.2023
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Adaptability and agility are arguably the most valuable attributes for business. We’ve seen firsthand in recent years how agility and adaptability in the face of change has become imperative for survival. First with the initial effects of the pandemic, then its longer-term consequences and economic turbulence, businesses that adapted quickly to the changing conditions and embraced digital technologies thrived. Yet, fast-paced digital adoption has not come easy for enterprises. Over the years, as each new business-enabling service came along, enterprises found ways to stack their extensive—and expensive—monolithic platforms.
Many of these platforms are now past their sell-by-date and have become restrictive to integrate new technologies and compete against digital frontrunners. That is why the concept of the “coreless enterprise” is gaining ground. Now, the race is on to re-architect and design digital ecosystems to give enterprises the freedom to integrate new services and compete effectively.
Defining the coreless approach
The “coreless” approach is designed to seamlessly scale agility and meet the growing need for speed. This approach is needed to meet the future of digital business – with microservices at its heart. A microservice is a small piece of individual software that is designed to do one, focused task, and they are being widely used by some of the world’s largest organizations. A study conducted by the Capgemini Research Institute (CRI) interviewed executives from digital frontrunners whose combined revenues totaled $1.5 trillion who reported that, to scale agility, their modernized IT systems used microservices.
The “coreless” approach is based on modular, microservice-based architecture, giving businesses the freedom to tailor different areas of the digital lifecycle, integrate best-of-breed solutions, and upgrade functions that are no longer needed. This flexible, composable blueprint also means an end to disruption and downtime caused by service and infrastructure updates.
In 2020, Gartner declared that “the future of business is composable” and it has remained among their top strategic imperatives for 2022. According to the analyst firm, businesses that embrace this composable approach will greatly outpace the competition when it comes to the deployment of new services and features—as soon as this year. Coreless architecture offers such an advantage because it allows for seamless shuffling of the digital stack in pursuit of different business goals, like boosting customer experience (CX) or increasing efficiency.
Competing against digital natives
The banking industry is a prime example of coreless architectures working in practice. When “open banking” legislation – more properly known as PSD2 – came into force in 2018, banks were required to open their data, enabling customers to share their financial information with third-party service providers. As a result, digitally native start-ups and corporate behemoths from across industries were able to offer services that were previously the sole preserve of banks. Built on monolithic systems primed for scale and security over agility, banks needed to adapt fast to preserve their ability to cross-sell and engage with their customers.
Coreless banking provided the solution. This new approach enabled banks to transform their offerings, adding new services such as “headless” Application Programming Interfaces (APIs), which were easily interchangeable with one another. These headless APIs uncoupled the service layer and the data layer – eliminating the need to take the system offline to adjust data on the backend and significantly increasing productivity.
Moving away from these tightly coupled frameworks and shifting to a headless approach has enabled businesses to make changes without affecting other critical services.
Deploying microservices for maximum flexibility
An end-to-end user experience is typically made up of many microservices, often linked together in a monolithic system. If only one element needs alteration, think of a Jenga tower – making changes by removing bricks risks bringing the entire tower down. Similarly, businesses avoided altering their microservices unless absolutely necessary.
However, in an age where customers expect richly engaging, seamless multi-touchpoint interactions to take place in real-time, enterprises need to adopt microservices to be able to finesse their offerings. By swiftly adding new products, services, and touchpoints to the user experience and adapting functionality at both the service and data layers at speed and scale, they can better meet customer demand.
Digitally decentralizing the future
A major difference in the monolithic versus coreless approaches is that the former is heavily centralized while the latter is decentralized. Moving from a “command and control” mentality to one which values a decentralized, adaptable way of working can be tough for enterprises, but events of recent years have highlighted the critical importance of being able to respond to market conditions in a timely manner. The pandemic revealed who the true digital disruptors were, and businesses that were able to adapt and pivot their operating model and add services overnight fared far better than their slower counterparts.
Despite the growing pressure to adapt, digital agility and transformation have been slow for some enterprises. Monolithic, outdated platforms have restricted the ability to compete against digital frontrunners. Enterprises that can decentralize and operate in an agile manner can radically transform their operations. The same Capgemini Research Institute study found a remarkable example of major disruption. One of Africa’s largest banks not only increased team productivity by 50%, but drastically reduced time to market from a staggering 700 days to 30. With inflationary tailwinds and economic uncertainty on the horizon, no business can ill afford to shun a coreless future.
