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TECH TALK: Tech Trends: 4. Real-Time Enterprise

July 5th, 2004 · No Comments

The dream of the real-time enterprise (RTE) has been there since the earliest software systems were written. Success has been achieved to varying degrees by different organisations. The challenge is what fuels the various business software companies and the looming consolidation in the industry (considering Oracles bid for PeopleSoft and the discontinued merger talks between Microsoft and SAP). The RTE is the Holy Grail of every business getting a snapshot of the business as it is at this instant across the extended value chain. Companies like Dell and Wal-mart have probably made the maximum progress in moving towards this vision, and this is reflected in their dominance of the industries in which they operate.

In business, the differentiator is increasingly not in the machines used for production, but in the processes that make up the information refinery. According to Vinod Khosla, Any business process within the enterprise, including relevant processes in use by its trading partners, must be reflected instantaneously in all enterprise systems. In other words, within a real-time enterprise, all information is real time. An example of a real-time enterprise is Cisco, which is known to be able to close its books every day. Service-oriented architectures are helping glue the various information silos within the enterprise to create an event-driven platform, built around business processes. SAPs Shai Agassi said: Ten years ago the challenge was to reduce the time a market opportunity was spotted to the time a company was able to develop an appropriate product, get parts from suppliers and ship it to the customers. By and large we have brought that down. Companies can do that in two weeks to a month. The next phase will be about change management.

An extract from the introduction of a book, Realtime, published by SAP as a tribute to one of its founders, Hasso Plattner says: Real time is a clear path from stimulus through decision to an effective enterpriseThe essence of the real-time enterprise is reducing the excise tax of inefficiency at all levels of a company.

Ram Reddy wrote on the Real-Time Enterprise in the Intelligent Enterprise, saying that the RTE offers operational more than strategic benefits:

The RTE concept has been around for many decades. The goal of early information systems was to capture transactional and operational data as it was created and share it instantaneously across the enterprise and its supporting supply chain. But technology limitations made RTE elusive. And although RTE technologies in some form or another have been around for a while, their use has been limited to a specific customer service function such as credit verification at point of sale. Even then, paying by credit card in certain parts of the world can take anywhere from 15 to 20 minutes. (Lacking real-time connectivity to a credit verification bureau, a store clerk must phone a credit bureau to get approval for the purchase.)

Now, the increasing availability of affordable high-speed network connectivity and extensible markup language (XML) and its derivatives is letting certain functions within the enterprise interact in real time. The business drivers for RTE technologies continue to drive adoption: Reducing the amount of time it takes for information to be transmitted between functional areas within an enterprise and its supporting supply chain will yield significant business benefits. RTE ideally would provide these business benefits at the operational, managerial, and executive levels.

RTE technologies promise meaningful and measurable business benefits as long as the focus is on reducing cycle times and improving operational efficiencies. In some instances, especially in service industries, RTE technologies also can deliver managerial benefits by automating routine decision-making, such as credit authorization and approval. For manufacturing enterprises and supporting supply chains that have been exchanging information using traditional mechanisms such as EDI, RTE technologies will have to demonstrate a clear ROI from incremental time reduction to zero latency. Until the difficult problems of data cleansing, integration, and supplier relationships are solved, strategic benefits from RTE technologies will be limited.

Called by various names Agile, Adaptive, Intelligent, Event-Drive the RTE dream is now coming true as applications software, service-oriented architectures, mobility, business process management and personalised dashboards all come together.

Tomorrow: SOA


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