SYDNEY (10/02/2003) - Enterprises will see dramatic reductions in time for the implementation of outsourcing contracts over the next five years, as the advent of so called 'real time enterprise' (RTE) takes hold, according to Gartner Inc. vice-president director of research Craig Baty.
"Major outsourcing projects will take only a month or so in five years from now," Baty told the SUGA (SAS Institute Inc. user group) conference in Sydney, saying that the reduction of time in business cycles would be from five to 10-fold.
Baty said enterprises needed to leverage IT and reduce cycle times by around 50 percent a year just to remain competitive, while ensuring that enterprise architecture was robust enough to cope with rapid change.
Gartner defines the RTE as a business that "competes by using up-to-date information to progressively remove delays in managing and exercising its critical business processes."
Put more bluntly, RTEs heavily leverage data and business intelligence capabilities to drastically cut cycle times and production costs, thus effecting a competitive advantage. The continuous reduction in cycle time is core to this assertion.
No Gartner presentation is ever complete without a big new buzzword, and the RTE vision has delivered the "cyclone model", which appears to be based on something very similar to the effects of centrifugal force inside a vortex.
As an orbiting object (enterprise) nears the center, the number of revolutions (cycles) performed over time increase nearly exponentially.
No mention was made of whether critical mass would occur, nor the relative inertia experience within the eye of a cyclone.
Baty told the audience the cyclone idea was born from "the conical model based on a bagless vacuum cleaner", noting that consumers willing to pay a premium for speed and convenience will soon take it for granted.
"Enterprise leaders must deal with time-robbed customers and faster economic pace. This inevitably falls to the CIO and information services," Baty said.
"The RTE must sense what is coming down the line much faster (and) detect events early enough to respond to them within a given tolerance window or face disaster."
Baty said the impetus for rapid uptake of the RTE model would come from start-up enterprises with greenfields IT systems that challenged slower moving incumbents, listing the row between airlines Qantas and Virgin Blue as an example.
Gartner said about 20 percent of global top 2000 corporations were deploying RTE related projects and by 2007 "most enterprises will cite a component of RTE as part of their business."
Gartner recommends that enterprises use a blend of mature and infant technology "to get your enterprise going."