Gartner Says Real-Time Enterprise Must Become a Leadership Issue
Survey shows companies expect to halve process cycles over the next five years but IT Managers are pessimistic about ability to move systems to real-time this decade
Florence, Italy 10 March 2003 — Speaking at its annual spring Symposium/ITxpo in Florence, Italy, Gartner today said Real-Time Enterprise must become a leadership issue. It warned that while 'a visible few' have built their market leadership on aspects of Real-Time competencies, survey results show the majority of enterprises have limited understanding of what Real-Time Enterprise really means, and have doubts about their ability to move systems to Real-Time. Gartner said businesses today are not in the position they need to be. It advised companies to take note: Real-Time enterprise will soon be coming to your industry and if you don't grab the reins, your competitors will.
Gartner said Real-Time is becoming a crucial competency as businesses fight to retain demanding customers, while coping with economic uncertainty and turbulence. The speed of management's response to narrowing windows of opportunity is a crucial issue.
According to Mark Raskino, lead analyst for Real-Time Enterprise at Gartner, "Competitiveness increasingly depends on the ability to detect critical events sooner and respond to them faster." However, he warned, "A general intent to do everything a bit quicker will not only be a poor substitute — it will be damaging. Companies can't afford to waste precious IT resources on generalisations. Defending the business from threats that might knock it off course requires a company to change its game significantly. This means accelerating a few carefully selected information flow and decision making processes."
Gartner said results from its annual EXP survey of 620 CIOs worldwide provided one example of how business drivers are changing. Raskino said, "Cost control and data security are considered the top business issues again this year, but they mask key agenda shifts just below the surface. Faster innovation and business risk management has moved up the list to third and fourth place. To deal with this, CIOs will have to lead their companies towards Real-Time enterprise, for example by slashing new product development cycle times and enabling very low-latency management information flows. A few leaders, such as GM, GE, Dell and JetBlue are clear examples already making these moves.
Results from a separate survey of 120 large enterprises across Europe and North America show that businesses have experienced significant time reductions in many key business process areas. They are also expecting to see elapsed times continue to shrink by up to 50 percent over the next five years.
For example, in new product development, 38 percent of respondents believe the full 'concept to concrete' cycle will take less than one month in 5 years time, compared to 16 percent achieving it today. While 39 percent said it takes their company less than 3 months to devise and communicate a new company strategy today, 59 percent expect to achieve that by 2008, and 12 percent believe it will be taking less than a week.
Gartner said these processes are complex, involving many people and considerable amounts of inter-dependant knowledge worker activity. IT is the key enabler and Gartner said not one technology, but rather a range of technologies, from instant messaging to mobile, and from real-time analytics to enterprise portals, will be required.
Gartner said this presents a stony path for IT Managers. Contradictory to the IT enabled business progress they have already seen, and expectations of what will happen in the future, the majority of respondents were pessimistic about the prospect of moving enterprise systems and processes to real time during this decade. Only six percent felt sure they could achieve this. "People believe that others can do it. But part of the problem is that the majority don't understand what Real-Time is", said Raskino.
Gartner said the optimists in the survey represent the more advanced early adopters. The survey shows the majority believes a new entrant with a green field site could create a Real-Time enterprise. This represents a serious competitive threat and is already becoming a reality. The growth of the newest low-cost airlines during this downturn, such as JetBlue and VirginBlue, offer good examples," said Raskino.
Gartner said the Real-Time enterprise opportunity gap will widen, but that fear of the consequences will overcome uncertainty, and compel companies to take action on their constraining legacy systems and process base. It estimates that by 2006, the dominant players in every business segment will have achieved leadership or fortified their lead through real-time capabilities.
Gartner urged business planners and IS leaders to take the following action:
Business Planners — Initiate the change
Select key strategic areas for time based transformation
Set radical elapsed time reduction goals and sell them to the organization
IS Leaders - Prepare to enact
Map and measure latencies
Mobilize and skill in key RTE technologies
Invest in enterprise architecture upgrading
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, Gartner's Symposium/ITxpo are key components of their annual planning efforts, and a place to gain insights into how their organizations can use technology to address business challenges and improve operational efficiency.
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