The Hindu Business Line : Seize opportunities `as they are unfolding'

A standard operating procedure of today's business is to collect current data and work in real-time. Only then will it be possible to respond to rapidly to changing business conditions. But you need to do more, says Vivek Ranadivé in The Power to Predict, from Tata McGraw-Hill (www.tatamcgrawhill.com) .

Make the transition to `predictive business', that is, `the ability to anticipate business problems and opportunities and to act pre-emptively,' he urges. If real-time business is about doing things faster, predictive business is `about doing things you could not do before.' This is not just about collecting more data and using more sophisticated analytics, explains the author. "Rather it is about combining technologies, business techniques, and orchestrated process to better leverage your corporate assets."

Real-time information is a far cry from the earlier `data at rest' era that hinged heavily on historical data. Yet, real-time information isn't the same as real-time business. The latter demands agility and control to ensure `the ability to coordinate and control assets and activities at every level so you can sense and respond to change as it happens.' Ranadivé defines real-time business as "the ability to give customers what they want, when they want it, in the manner they want to receive it."

Such a business needs `event-driven architecture' (EDA) as its IT framework, says the author. "In an EDA, information is available from, and can be transmitted to, all nodes on the network. New information derived from analytical programmes can also be fed back to the network for further consumption." EDA is a big shift from the mire of `isolated islands' of information. "EDA turns information into corporate knowledge and, with the appropriate processes in place, makes that knowledge actionable." Other building blocks of predictive business are SOA (service-oriented architecture), BPM (business process management), BAM (business activity monitoring) and CEP (complex event processing).

What is the power to predict? This, Ranadivé explains, is made of two things: one, ability to seize opportunities `as they are unfolding'; and two, anticipating adverse conditions `so that seemingly small and unrelated events do not become the precursors to disaster.' Our goal isn't perfect knowledge; because, it doesn't exist! To be effective, "we have to be rooted in what is achievable now." This requires an analysis of the past and the present `to spot patterns, so we can take corrective actions for future events in ways that lead to desirable outcomes.' In Chapter 4 on `excellence in financial services,' the author emphasises that the value of customer data increases exponentially when `amalgamated to create a single view of the customer.' Racy reading for investors are sections on shaving off milliseconds when sending messages to the market computers, and algorithmic trading.

Essential inputs are in the discussion on how predictive business can improve transportation and delivery. "Supply chain logistics costs range from 5 to 50 per cent of a product's delivered cost," informs Ranadivé.

RFID or radio frequency identification tags will revolutionise retail, predicts the author. "Instead of supplier pushing product to the customer, consumer pulls from store shelves will trigger inventory replenishment." RFID is alive and active! For, at the time of writing this, WTN News speaks of how RFID system helps hospitals in tracking assets; and ZDNet.com.au alerts about `RFID to track prisoners'!

The final chapter forecasts the survival of the predictive. These are the businesses that will be "able to raise the bar on service levels, boost the quality of their products and manage risk better and faster than their competitors." Ranadivé declares we are in interesting times. "Rest assured, those who can run a half step ahead will win."

A book that underwrites the future for you.

http://BookPeek.blogspot.com

D. Murali