• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

L.N. Revathy

This is the epitome of synchrony. The hour, minute and second hands work together to keep time. The same challenge awaits the `real-time enterprise' and all its elements - ticking together.

THREE-LETTER acronyms — ERP, SCM, and the like — are constantly cropping up in the IT world and the latest doing the rounds is RTE or the real-time enterprise. Now is it the next big thing, or just a lot of hype?

RTE is basically about getting things done rapidly. It's about time reduction, says Mohanbir Sawhney, the McCormick Tribune Professor of Technology at Northwestern University's Kellogg School of Management.

Advisory firm Gartner defines the RTE as an enterprise that "competes by using up-to-date information to progressively remove delays to the management, and aids execution of its critical business processes." Gartner has, in a recent report, opined that more than 20 per cent of Global 2000 enterprise CIOs would cite the RTE as one of their top-five investment areas by year's end.

Gartner has plenty of company on the RTE bandwagon. A Google search in January turned up 14,100 hits. Vendors such as Asera and PeopleSoft are staking their claim as `enablers' and `creators' of the RTE. Barton Goldenberg, a CRM consultant, declares that the RTE is `a fundamental paradigm shift in the way companies conduct business.' With technology as an enabling tool, it is today possible to bring a product to the market within the specified time-frame and after fulfilment of all processes.

Take automobile manufacturing. Most of the big carmakers have brought their vehicle design time down from seven years to four, with the likelihood of this being reduced further. General Motors, for instance, has reduced it to 18 months. Similarly, in the textile machinery manufacturing space, Lakshmi Machine Works has reduced the waiting period by tracking the trends, and managing the supply chain effectively.

In every sector, be it Government or otherwise, managerial processes take months, rather than a few weeks or days. The biggest challenge in implementing the RTE is to find the leverage to fix this.

The real-time enterprise cannot become real until the enterprise's suppliers, partners and customers are all connected and information flows from the suppliers at one end of the extended enterprise to customers at the other. This is a challenging task that involves creating trust, aligning goals, creating incentives for adoption, and educating partners, customers and suppliers, says Sawhney.

Reducing delays and speeding up business processes is not an end in itself — it is merely a means for creating additional value for customers, he explains.

The impact of outsourcing depends on business management, in the movement of processes offshore. Again, outsourcing will inhibit the ability to respond faster, particularly when it involves a distance. But IT-enabled business process service can be effected in real time without delay. The BPO companies in India that are engaged in back-office operations have been fuelling the real-time trend.

A business case for an RTE initiative needs to be grounded in the value of reducing delays, not merely in terms of time saved. True, time is money. But the exchange rate between time and money should be determined based on how customers, partners and suppliers value the savings. Further, speed comes at a cost. The value of speeding up a business process should be weighed against the cost of speeding up the process at extra cost, for technology is the same.

Here is a note of caution. RTE is not right for all. Therefore think before taking the leap — vendors will often sell you on the next big thing with the justification that everyone else is doing it. The RTE is no exception. While every enterprise can benefit from becoming more agile, agility is only one of the ways to win.

One reason why the RTE is a hot topic right now is that new technologies make it more feasible to connect systems, applications and business processes. These developments, which include XML, Web services, data warehousing, middleware and component-oriented enterprise architectures, allow speed and are more agile. Agility and responsiveness, in turn, result in bringing down operating costs, in improving offerings and better customer service. But technology by itself cannot transform an enterprise, for it is about business process, about people - without whom there would be no technology. The RTE is just another evolutionary step in the application of technology to improve business productivity.

Take your time hopping on a train that isn't leaving the station just yet. Says Mohanbir Sawhney, "Today, it's the job of IT people to recognise business problems and show how they can be solved with technology, not talk about installing more technology. You have to start with the right focus and keep it. Too often, focus gets lost as a project goes forward."

lnr@thehindu.co.in

Article E-Mail :: Comment :: Syndication

Stories in this Section
Big guys do it better

Copyright © 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line