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| Gartner Says New Economy gives way to 'Now Economy' and the Real Time Enterprise |
| Gartner uncovers the next big move for strategic IT Real-Time Enterprise demands the death of the accidental enterprise architecture. |
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Cannes, France, 4 November 2002 — Following predictions of a healthier IT economy in the second half of 2003, Gartner today urged businesses to look beyond short term cost control and consider how to start investing differently for future competitive advantage. Speaking at the annual Gartner Symposium/ITxpo in Cannes, France, Gartner analysts said that only organisations that can confidently declare themselves a Real-Time Enterprise will thrive in the service-oriented 'now economy'. It said discipline, rather than large IT budgets, holds the key to success.
Gartner warned that while budgets have remained level, expectations have continued to grow, leaving enterprises under extreme pressure to do more with less. Analysts identified the focus on speed as the dominant factor in progressing from surviving to thriving in the post 'e' era. According to Mark Raskino, Research Director at Gartner, "Time, and more specifically, a focus on the decadent waste of elapsed time, will be the driving force in extracting real business improvement from technology." This is what Gartner terms the Real-Time Enterprise, an organisation that competes by using up-to-date information to progressively remove delays to the management and execution of its critical business processes. Raskino adds, "While Real-Time Enterprise is the next big move for business IT strategy, this does not mean we need to revert to the big IT budgets of recent years. Instead simple, tangible targets, combined with Internet era technologies, can deliver the efficiency currently locked into outdated processes." Gartner expects the move towards Real-Time Enterprise will be swift. It predicts that by the end of 2003, more than 20 percent of global enterprise CIOs will cite Real-Time Enterprise as one of their top five investment areas. However, analysts warned against treating Real-Time Enterprise as a stand-alone line in the budget. "Businesses need to forget the devil-may-care spending habits of the past and start focusing in on what is achievable within current expenditure limits," said Raskino. "Discipline must be the key factor as business and IT managers seeks to maximise the potential of existing IT infrastructures within their visions for the future." The Cyclones of the Real-Time Enterprise The effective Real-Time Enterprise sets radical targets for reducing end-to-end cycle time in key business process areas - from areas such as the order-to-cash cycle right up to mergers and acquisitions. Gartner refers to these target processes as the cyclones of the Real-Time Enterprise. By focusing on time reduction in these key areas, waste, inefficiency and poor customer service can be sucked out of the organisation over time. The changes, however, must be ongoing. A three- percent one-time reduction will not be sufficient to pay back. Annual or bi-annual reduction targets must be in the 30 to 90 percent range. 
(Source:Gartner, the RTE 'Cyclones' Model Changes the View, 01 October 2002) Death of the accidental enterprise architecture Gartner said becoming a Real-Time Enterprise demands the death of the accidental enterprise architecture and will force companies to focus on application integration in a strategic way. According to Massimo Pezzini, VP and Research Director at Gartner, "No one company would choose to have the integration architecture they have today - usually a 'network spaghetti' of component systems, and with new technologies grafted onto legacy systems." He said companies must now deal with the reality of this and move towards a strategic integration infrastructure that will both save money and improve business responsiveness. This Enterprise Nervous System will have 'no walls' and enable seamless real-time collaboration within business units and departments, and between companies and their business partners. Pezzini said the Enterprise Nervous System is the fundamental component of a vast global integration infrastructure that it is beginning to form: the multi-enterprise Grid. As more and more companies interconnect, their Enterprise Nervous System will spontaneously melt together to enable global, real-time collaborative business process between companies, dynamically reshaping and reconfiguring virtual enterprises. The Gartner Real-Time Enterprise technology map Gartner said a variety of Internet era technologies will help drive the Real-Time Enterprise through the next decade. Warehouses will collect data and Business Activity Monitoring (BAM) will help filter out urgent and important events. Wireless, instant messaging, location and presence technologies will help human organisations to dynamically coalesce and respond quickly. Web services and ERP II will permit value network process responses to execute faster, while portals and content management systems will provide decision makers access to vital information and keep the broader workforce informed of appropriate actions and consequences. Further into the future - tags and sensors, eventually using Radio Frequency Identification (RFID) and Micro-Electro-Mechanical Systems (MEMS), will monitor the real world as the Web monitors the virtual world. Six Steps to Real-Time Enterprise Gartner stressed that undertaking the Real- Time Enterprise is not a trivial exercise or an immediate panacea - the stakes and risks are substantial. To pave the way for the Real Time Enterprise, Gartner recommends six essential steps. Business leaders should... 1. Simplify and Select - Simplify the business view using the cyclones model and select critical areas to focus on for maximum benefit 2. Slash and Stabilise - Decide which business process times within a cyclone will be slashed and which will remain stable 3. Set and Sell - Set visionary, high-level, time-reduction goals and sell them to employees enterprise-wide. While IS leaders need to... 4. Map and Measure - Map enterprise application latencies and measure the cost of change in the bottleneck areas 5. Mobilise and Skill - Mobilise IS staff to work on latency reductions, and re-skill in key technologies. 6. Architect for Agility - Develop enterprise architecture for a fast and flexible response to business change. The Gartner Symposium/ITxpo is a global event run in Australia, Japan, the US and Europe. It is the IT industry's largest and most strategic conference, providing business leaders with a look today at the future of IT. For more than 10,000 IT professionals from the world's leading enterprises, The Gartner Symposium/ITxpo are key components of their annual planning efforts, and a place to gain insights into how their organisations can use technology to address business challenges and improve operational efficiency. About Gartner |
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Contact: Ray Pinto Gartner +1 33 67 489 0794 ray.pinto@augustone.com |
Contact: Laurence Goasduff Gartner + 44 1784-487-195 laurence.goasduff@gartner.com |
