The real story behind a real-time enterprise

It was in 2001 that analyst Gartner first began peddling the concept of the 'real-time enterprise' (RTE).

It sounded catchy, with its overtones of an enterprise operating at speed, in real time, able to react instantaneously to market fluctuations and other changes.

But organisations have struggled to come to terms with what it really means. How do you turn your organisation into an RTE?

Companies such as easyJet and amazon.com look like RTEs, able to move quickly into new markets and start new businesses at the drop of a hat.

In the IT industry, Dell looks like an RTE, responding to changing customer demands in an instant and moving swiftly into new markets, such as enterprise storage and network products. But are they RTEs?

While it may be easy for companies in new markets to set out to operate in real time, how do you change the structure in an established organisation to turn it into an RTE?

To find some answers to these questions, Computing hosted a roundtable of analysts, vendors and customers to get to the bottom of the real-time story.

What is a real-time enterprise?
"RTE is defined as a business concept," explained David Flint, Gartner's leading RTE expert. "It is an enterprise that competes by progressively reducing its critical business processes."

So far so simple, perhaps? Not really. "RTE is a commercial initiative, and not in terms of any one technology. It includes the possibility that some things we do under the RTE banner will not involve technology at all. The focus is also on other operational and management processes," said Flint.

And don't confuse RTE with an efficient ordering system. "It is not just a matter of reducing the response time to customers, or cutting the order to delivery time. It includes concepts such as getting time out of the design cycle," he explained.

Flint points to a famous example in the car industry. "General Motors cut its time to design a car from four years to 18 months," he said. It's not easy to do, especially if organisations are too focused on the technology.

"When we see organisations taking 12 months to decide to buy a piece of software, then clearly it is a managerial process that they have decided is not critical," stated Flint. "We ought to be using the mantra of delay reduction for a range of processes."

A number of IT organisations are already using RTE in their branding. For example, IBM uses it for its e-business on-demand initiative and on-demand computing.

"IBM is focused on the technical area, but we believe it will shift that focus. Hewlett Packard talks about adaptive computing, and Siemens talks about real-time computing. These are all different aspects of RTE," said Flint. "It is an idea whose time has come."

In part it is a reaction. "In the 1990s we made a mess of things with the internet bubble," said Flint.

"We did some wonderful things with the front-end, but we didn't integrate. With the downturn we have to fix those things, and time is a key element. If you take out time, you will take out cost as well."

RTE - the Dell approach
Dell believes it is already a real-time enterprise, according to UK manager Bill Rodrigues. The assertion is based on one defining characteristic: the speed of response to change.

Rodrigues has good grounds for comparison, since he spent a chunk of his career working for a well-established IT firm before moving to Dell.

"The obvious difference is that at Dell everything we do is web-based," explained Rodrigues. "But the real differences are in the philosophy and the culture.

"In my former company I was responsible for a billion-dollar business, but I had no metrics. I would have to wait 12 days into the next month to really understand what we had accomplished the month before. At Dell I know everything I want to know about the business, almost instantaneously."

So, in an RTE it seems important that all the data is available as quickly as possible to allow managers to make fast decisions. But it's not that simple.

"It's important not to have data just for data's sake," warned Rodrigues. "At Dell, everything is performance driven and not based on over-analysis. It's about having enough data at your fingertips so that everything can be done very quickly.

"The data comes from our customers, and that's important. We get the data very quickly, so we can take it in and execute it. It's all decided by the customer."

Rodrigues sympathises with those in slower moving organisations. "I have worked in a company that had lots of different people trying to make a decision that I was accountable for," he said.

"It was my market, but I had to sell internally. I was spending 75 per cent of my time trying to get something done internally before I could get it out to the marketplace.

"So many times we missed the opportunity. Now I don't have that. I have the opportunity to make the decision quickly, even if it is a wrong decision."

But if this data had been available in Rodrigues's previous company, would it have solved the problem?

"It would have helped," he insisted. "But it wouldn't have entirely fixed the problem. Because of the culture, the execution wouldn't have been as good."

Culture is important, but getting the right data to the right people is key to the RTE. Data is the key all along.

Con Blackett is a technical architect for intelligent systems management at BTExact. "We have a user base of about 100,000, which equates to 7,000 servers and about 7,500 network devices. The big issue is monitoring it," he explained.

"We do customer experience monitoring. We monitor transactions on 7,000 PCs in the business. When they press the button to commit to a transaction we can measure the time taken.

"We mix and align that with a lot of synthetic, robotic transaction testing. We will test 1,500 web pages to see what the response is like."

Blackett believes he has seen a change in focus from reliability to providing performance; systems delivering the right level of service.

"Across 600 applications we run at about 99.98 per cent availability," he said. "So the focus shifts from availability - it's always going to be available - to the performance of that availability.

"You can do all kinds of things to improve the performance, but you have to monitor that all the time. The real-time monitoring becomes the most important part."

Blackett believes that the key to success is a mixture of the right business processes and the right technology.

RTE: fact or fancy phrasing?
"RTE is exciting, but isn't it just good business practice?" asked Andy Veitch, a vice president at Visa Europe.

"We have had phenomenal growth over the past few years, and our key objective has been to manage that without growth in headcount and expenditure."

For Veitch, real-time working is what he has been doing for the past two years, only now there's some fancy terminology to describe it.

"At Visa we thought that IT had become the cart leading the horse. What we have done is to put the decision making back into the business," he explained.

There's no black magic in real-time working, according to Dave Richmond, chief executive at software integration company Striva.

"All Dell has done is put power and responsibility together; Gartner has invented a fancy phrase for something very simple," he suggested.

Flint disagrees. "RTE is more than that. Companies need to get new products to market in two months and instead they know it will take six," he said.

"It's a competitive issue. They need to put processes in place that will take them from an idea - from concept to concrete - in the fastest time."

Companies are doing this faster now than they were five years ago, according to Flint, and we can expect processes to get quicker still.

"To do this, we have to start regarding lots of things that managers do as processes, rather than black magic. Lots of things were once black magic: stock control for example," he said.

Management, adaptability, culture
Ian Howells, vice president of marketing at integration software company SeeBeyond Europe, indicated that managers lack power because they lack the right information.

"Management information is frustrating. It's like watching television: you can see something is going wrong, but you can't do anything about it," he explained.

RTE is about "good management data and about having the systems to go in and make changes rapidly", he added.

"For example, look at the airlines. When BA saw cut-price airlines coming in, it tried to have two airlines - one of them cut-price - but it was impossible to make the changes to do this."

Marc Wilkinson, deputy chief technology officer at software company Micromuse, agrees up to a point. You take the idea and adapt it and "everything has to be adapted according to the demand", he said.

Rodrigues added: "The thing you want most is something that doesn't cost you as much and gives you a good customer experience.

"The good experience is that they get you where you want to go and leave and arrive on time. Everybody is doing low cost, so eventually customer service is the differentiator."

With airlines such as easyJet or Ryanair the issue is not simply service or technology, but culture, according to Flint.

"Everyone in the organisation understands that 'this is what we do, this is what we are good at, and everything else is secondary'," he said.

That is the Gartner mantra on the RTE but, as ever in IT, while some can agree on some issues, no two views are ever the same. The RTE debate continues.

THE GARTNER POSITION ON RTE
Many business processes are, in Gartner's words, "a mess". The RTE can provide clarity. Improving the operational efficiency of a business alone is not enough.

Improving managerial efficiency is more difficult than operational efficiency. Firms must not just focus on responsiveness, but look at improvements in cost and quality.

To execute RTE, companies must re-engineer the whole business process. This does not usually require any new technology. The questions they must ask are:

• How good are our business processes? Specifically, how quick?
• How good are our management processes?
• Do business managers see delay reduction as a priority?
• Does the IT department have the skills to remove delay through process re-engineering?
• Do our legacy systems and IT infrastructure help or impede the changes needed?
• Where are the biggest impediments?