A survey from research and advisory firm Gartner, Inc. of Stamford, Conn., reveals that 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.
In a news release following its annual spring Symposium/ITxpo in Florence, Italy, in March, Gartner noted “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 generalizations. 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 per cent over the next five years.
For example, in new product development, 38 per cent of respondents reportedly believe the full ‘concept to concrete’ cycle will take less than one month in five years time, compared to 16 per cent achieving it today. While 39 per cent said it takes their company less than three months to devise and communicate a new company strategy today, 59 per cent expect to achieve that by 2008, and 12 per cent 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 per cent 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 estimates that by 2006, the dominant players in every business segment will have achieved leadership or fortified their lead through real-time capabilities.
Gartner’s tips for moving forward with real-time
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 skill in key real-time technologies. Invest in enterprise architecture upgrading.