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November 20, 2009

The Coming Real Time Revolution

[originally posted on Get Real, January 19, 2005]

[These are the prepared notes for my introductory remarks for yesterday's Get Real Show, largely derived form a report I wrote for Cutter a few years ago, called Time to Get Real: Growing the Real Time Enterprise (still seems fresh though).]

To imagine a zero latency organization – with near frictionless communication between applications and people – you have to grapple with an even more difficult idea: a network of companies, linked through a cascade of commercial transactions and communications, which all together represents a real time meta-enterprise.

Truly, no company can become real time enabled in isolation. And as individual companies seek to improve their operations through the operational application of real time techniques and technology, they will find that the biggest payoffs come from the touch points with partners, suppliers, and customers. The net effect of these thousands or millions of partial solutions is a social transformation, as the business economy moves from traditional, slow-time operational models, to a revolutionary real time footing.

The real time organization is not a starry-eyed quest for the unattainable, even though squeezing out the last iota of latency in every business process and interaction is an unachievable goal. It’s an adjustment to a new economic context, where new survival strategies will need to be tested, refined, and applied, and where much of what worked before will not only become obsolete, but dangerous. Business processes and market positioning based on the premises of even a few years ago could spell disaster today, in many sectors. The economics of real time business will require a reassessment of sources of value, and areas of risk.

What are some of the features of this new real time landscape? Even without introducing the more esoteric, controversial, and complex elements of my rants from the past few years, I can enumerate a short list of principles driving the move toward the real time enterprise:

1. Today’s performance enhancements will largely come from cross-enterprise communication improvements, rather than the internal improvements of the past decades. Companies have invested billions to soup up internal processes, but they will need to revisit those processes again.

2. Real time communication is not just slow-time communication sped up. Linking applications and people around the concept of zero latency means that processes and applications will have to be rethought, rebuilt, or — in some cases — jettisoned. There is a qualitative shift in how things work when they’re moved to a real time basis, independent of the quantitative benefits of doing things faster.

3. Real time principles are applicable in all contexts. Analysts who suggest that companies that don’t compete “on speed” are missing the point. There is a qualitative change in all operations of a company when it’s organized around real time principles, not just a quantitative one. Even those who compete on customer intimacy or engineering excellence can cut costs, increase customer satisfaction, and increase innovation through the ‘side effects’ of applying real time techniques and technologies.

4. Real time organizations will be much more tightly linked to their commercial ecosystems to reduce the risks associated with market volatility, and to gain better information about market trends. Connectedness has its dark side, since tighter links means more volatility because of synchronization across the ecosystem: we have to relearn how to react in such a brave new world.

5. There will be much more communication going on in the real time organization, but fewer wasted communication, and less store-and-forward mechanisms. Many researchers suggest that as much as 40% of all business phone calls lead to voice mail, for example. This is a glaring waste of time and money. Likewise, we will see much less e-mail, nightly batch files, and weekly inventory updates, but more direct, synchronous communication between applications and between people. We will soon look back on today’s style of business communication and wonder how it ever worked at all.

6. Perhaps the most disruptive factor of the real time revolution is presence, the Siamese twin of instant messaging. Instant messaging has exploded upon the world, growing to more than half a billion users. It is, however, still considered a teenager’s toy by many in the IT community, which is both silly and pointless. As Ed Simnett of Microsoft pointed out, those teenagers are entering the workforce today with the assumption that instant messaging is productive, cheap, and ubiquitous, not a novelty to be analyzed, but simply a tool to be used. The idea of presence – the ability to know if an agent is available to communicate – is being carried forward into group and corporate scope and past the ‘buddy list’ of today’s consumer IM networks, and will change business communication almost beyond recognition as presence is threaded into everything – every app, every phone, every device, every part on the warehouse shelf.

7. The Internet has become the Petri dish in which we’re creating a new business culture, and we’re entering the exponential tail of the value curve due to the connectedness that modern information technologies offer to business. The real time Internet that is emerging through several key technologies – higher bandwidth, wireless connectivity, voice-over-IP, and instant messaging/presence – that are amplifying the potential for creating more and richer social groups.

8. The value of the network has risen exponentially, and extracting that value requires mobilizing around real time Internet technologies. The means to tap the exponential value growth of the real time revolution is through real time communities – social groups linked through real time technologies. Integration of legacy applications or processes, even across enterprises linked together in complex value chains, will only yield linear returns on investment. This is a course that has been followed for years, and while the results are positive, they are limited. However, exponential value growth comes from the reorganization of cross-enterprise operations around support for real time communities – social groups organized around specific activities or functions. Rethinking applications and processes to support the needs of these meta-enterprise social groups will be the path to achieving and tapping this exponential value.

9. All this means a new model for enterprise architecture. Enterprise architecture has been approached in recent years as a means to automate the business processes within a company, and perhaps to integrate with the business processes of other companies. The new model for enterprise architecture will be driven by the goal of supporting social processes across the meta-enterprise, which will require not only new technologies (such as web services, mobile connectivity, and instant messaging), but a radical departure in how we architect systems. The platforms being rolled out by the companies on our panel today will form the basis of future real time enterprise architecture, but global services – global identity authentication and presence services, for example – will be threaded into every company’s architecture as well, so that social groups can be formed in real time, on demand, allowing teams of companies to respond collectively to real time events on the fly.

10. Operating in the new real time economy will be in many ways an extension of what we already know, but will also require the adoption of a new mindset, and a new set of management principles. In the past 10 years, we have witnessed a decision-making shift from “the center” or “the top” (centralized management) to “the edge” or “the bottom” (front-line managers and team members). This trend will accelerate as real time technologies come online and disrupt the corporate reporting topology. As such, senior management’s role will increasingly shift from time-based decision making (responsive decision making in the face of opportunities or threats) toward space-based decision making. By space here, I’m speaking figuratively, as in choosing the markets or market niches in which to operate, the bases upon which to compete, the alliances to structure, and so on. But space is not just an externally focused, macro-economic dimension; it also has an internal side. The other critical role for management is inward-focused: supporting the capacity of the organization to support rich social groups; to, in essence, create an environment in which the organization can monitor and respond to threats and opportunities effectively. And “effectively” will come to quickly mean “in real time.” The mechanism of monitoring and response will be much more fluid social groups, created in some cases on the fly to respond to real time events. This will be the end of the organization chart as we have known it. The lessons of successful online communities will change the way organizations work and how cross-enterprise work is accomplished. Management is being shown the path to a better way to manage for the real-time era we are entering.

[I dug this out of the archives to respond to Marc Benioff's comments at the Techcrunch Real-Time Crunchup, today.]

Posted at 03:28 PM in Theories, Writings | Permalink

Technorati Tags: marc benioff, real-time enterprise, techcrunch real time crunchup

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