Gartner calls for more speed, less waste

Businesses must start to look beyond short-term cost cutting and build an organisation that will be able to compete more effectively once the economy starts to recover, according to Gartner.

Michael Fleisher, the analyst's chief executive, said that the major focus for IT directors needs to be finding ways to reduce the amount of time taken in critical business processes.

Speaking at the 2002 Gartner Symposium/ITxpo in Cannes, Fleisher introduced Gartner's latest business concept designed to achieve these goals, the Real Time Enterprise.

The analyst called for IT departments to help speed up processes and make the organisation faster and more responsive to the changing needs of its customers.

Gartner research director Andy Kyte said: "You have no alternative but to take time out of your processes.

"It's about the speed of management decisions. The Real Time Enterprise is about dealing with the demands of people who want things now."

But Gartner research director Gene Phifer stressed that real time does not mean that all processes have to occur instantaneously. It is about progressively removing delays and continuously looking for improvements.

"Speed for speed's sake is the wrong answer," he said. "It's about speed appropriate to the process. Focus on reducing elapsed time, and costs will come down."

Gartner said that focusing on time reduction in key areas will reduce waste and inefficiency, while improving customer service. It suggested annual time reduction targets for key business processes of 30 to 90 per cent.

The analyst predicted that, by the end of next year, more than 20 per cent of IT directors in global companies will say that achieving a Real Time Enterprise is one of their top five areas for investment.

Making better use of web-based systems will be a key factor.

"What today's internet technologies can do for businesses is much greater than what they are doing," said Gartner analyst Mark Raskino. "We believe that focusing on reducing elapsed cycle time is the driver to realise those benefits."

An example of an industry that has been transformed by new entrants cutting time in a key process is the airline sector.

Companies such as EasyJet and Ryanair have reduced the time it takes to receive cash by dealing direct with travellers.

This has given them a significant advantage over established rivals which take longer to obtain the money from travel agents.