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Now is the Time for Real-Time Enterprise
Implementing the Real-Time Enterprise Offers Big Business Benefits The benefits of the RTE are real and substantial. There are scores of cases in which a focus on radical time reduction has resulted in major business benefits. For instance:
We have also identified many processes, in many industries, where such initiatives would pay off. As enterprises address these opportunities, they will create cyclones of change that will sweep through enterprises and industries.
To gain these benefits each enterprise needs a program of time-based transformation; a business initiative that strips latency from its most critical business processes. (In technical terms, "latency" is the time it takes for a system to respond to an input. Viewing the modern enterprise as a kind of complex system, a zero-latency enterprise strategy implies that all parts of the enterprise can respond to events as soon as they become known to any one part of the enterprise.) Such programs should not aim to make everything happen in real-time. Some decisions require reflection and, given the time it takes to change the course of a corporate giant, there is no sense in trying to rethink the strategy every week. But, in practice, many business processes take much longer than they could and should. RTE will eliminate these delays. The Time to Act Is Now Enterprises should start planning these transformations focused on improving the speed of their processes now. The time is right because of a combination of technical and economic factors. Many electronic business applications are failing to meet their business targets because of a lack of integration with back-office systems. These current technical weakness are complemented by new technologies that make real-time operation more feasible. They include application integration tools, mobile data services and "always on" Internet access (fixed and mobile). In addition, some key established technologies, such as the Internet and mobile telephony are becoming more pervasive. The slow climb out of the economic downturn will provide some of the capital investment needed for change. The downturn has also strengthened the power of the CFO and returned enterprises to a more disciplined culture. The CFO will ensure that the funds will only be provided where tangible, measurable results can be demonstrated. The increase in business discipline will mean that such results can be delivered. The goal of reducing cycle times easily provides the hard target metrics needed. The many data warehouses that contain time-stamped transaction data provide the initial benchmark data that show the need for improvement. They will also be used to track progress. The RTE Needs Comprehensive IT Support The RTE demands new business processes, better data-capture techniques and changes in the managerial culture. Enterprises cannot remove the latency from their processes without the right IT. This must include applications especially the major process-supporting packages and software and IT infrastructures. Major Packages Real-time processes are only possible if the applications that support them are able to operate in real-time. The best applications in major categories, such as enterprise resource planning (ERP) and customer relationship management (CRM), are able to operate in real-time but often do not.
This problem is, however, small compared with the delays encountered when interfacing with legacy systems that are not real time. To shift to RTE, enterprises will typically need to replace many legacy systems and to remove latency from the links with others. Similar, and even greater, problems affect the links with systems operated by trading partners. These links are essential for supplying data and as the basis for real-time inter-business processes. Such problems are compounded by the twin shifts from linear supply chains to networks in which suppliers work with eachother in non-linear ways, and from simple supply chain management to collaborative commerce. Where these systems are not RTE-compatible, and many are not, enterprises will need all their powers of persuasion and diplomacy; plus some discreet arm-twisting. By end 2003, over 20% of G2000 enterprise CIOs will cite ‘real-time enterprise’ as one of their top 5 investment areas. (0.7 probability) Software Infrastructure To become RTEs, enterprises must avoid the trap of short-term thinking. They must create a software foundation for the applications and tools that are vital to the RTE. To do this they must redesign their software infrastructures to create an enterprise nervous system (ENS). The key technologies within or complementing the ENS should provide their functions through an architecture oriented around the level of service it will offer. These technologies include:
In a world of constant movement and real-time requirements, the software infrastructure must support mobile systems for access by, and urgent communication with, people on the move.
And, in a world of increasingly inter-linked and interdependent organizations it must progressively extend beyond the enterprise boundary to form an inter-business systems grid. In short, the RTE demands a comprehensive suite of enterprise software. Of course, these products do not themselves ensure that information is always accurate and current. For this, the enterprise requires good management processes that should, in turn, be supported by IT. The Bulletproof Infrastructure With no slack in its internal processes and tight links with trading partners, the RTE is constantly exposed to public view. It therefore needs a bulletproof IT infrastructure. In such an infrastructure, components rarely fail and no component is essential. But this is not enough. It also requires systems management to foresee problems (and move promptly to address them) and to assure business continuity even if all these precautions fail. Although reliable hardware and software are the foundations of a robust infrastructure, RTE capability will not be assured without world-class management processes. Processes for systems management, security and business continuity planning are particularly critical. The RTEs Needs IT Support for Real-Time Management Streamlined processes, supported by solid IT systems, are a vital part of the RTE but they are not sufficient. Many managerial and professional activities are not part of prescribed processes, yet the slow pace of these activities puts a brake on the whole enterprise.
Operational decision making is often a good place to begin. The decision process generally has three stages. The decision-maker:
The RTE needs to remove latency from all stages but, generally, it should start by implementing business activity monitoring (BAM). These are systems that provide data on the state-of-business processes in, or near, real time. For maximum effect, BAM systems should provide managers with established key performance indicators (KPIs) and metrics that point reliably to future performance. The RTE must empower its decision-makers to act promptly and must ensure that they accept the associated responsibilities. It will also need to provide decision-makers with training, knowledge management and simulation systems, "control panels" for major applications and means of passing decisions rapidly to operating staff. The RTEs Needs a new Approach to Mobile Systems Being out of the office, or away from the desk is no longer an excuse for missing a phone call, e-mail or sale. For many organizations, the RTE begins with mobile users in the field who need to be connected to the office through voice and data services. As more users telecommuters, mobile executives or sales people are regularly out of the office, mobile technology must expand to meet their needs. The mature systems and tools that are available to office staff cannot be taken into, or don’t work in, a mobile environment. Outside the office, there is less time to spend looking for information, there isn’t the convenience of a keyboard or large display and bandwidth is lower. Generally the requirements are stricter and the resources less. Mobile technology is advancing rapidly but these problems will not be solved by technology alone. Instead, organizations must focus on the particular requirements of each office user, whether for highly focused alerts or access to voluminous data. They must be prepared to change business processes, adopt new mobile technologies and create new user interfaces that require less processing, but also provide very fast access to key functions. Act Now The benefits are large - the time is ripe. Enterprises should now set strategic business targets for reducing end-to-end cycle time for the processes that are most critical to their various value disciplines and strategies. These may be the operational day-to-day processes (such as the order-to-cash cycle) or they may be in high-impact strategy areas, mergers and acquisitions, or new product development. RTE will become one of the most important mechanisms for leveraging business value from enterprise IT investments from 2003 onwards. Leading enterprises will adopt transformation focused on timeliness as the major aim of their IT-enabled investments. In doing so they will change, as some have already changed, the competitive landscapes in their sectors. More Detail:
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