Leading in real time An investigation of the impact of real-time business on strategy and management INTRODUCTION Business in a hurry Written by The Economist Intelligence Unit “It is, unfortunately, one of the chief characteristics of modern business to always be in a hurry.” This familiar lament was published in 1884 in a US journal, The Medical Record, showing that the feeling that modern life is accelerating is one of its most reliable constants A t a transactional level, however, it is undeniable that the pace of business is faster today than it has ever been, thanks mainly to digital technology It was the finance industry that first saw transactions reach a speed far beyond what any human being could process Equity trades, which once required a physical exchange of documents, can now be executed electronically in 10 milliseconds or less Today, high-speed, high-frequency transactions are increasingly common in other industries as digital technology becomes more pervasive For example, the advertising industry is applying algorithmic Cisco Technology Radar / trading techniques developed in the financial services industry to create ad exchanges, where digital advertising space is sold to the highest bidder within fractions of a second ASOS, a British online retailer, uses real-time software to monitor blogs, social media, competitor websites and emails as well as press mentions to keep a finger on the pulse of real-time product trends This informs the company’s decision of which products to discount, when, for how long and by how much, as well as informing its buyers and merchandisers which products its shoppers want “right now” More information at https://techradar.cisco.com This assists pricing and range decisions as well as stock control while reducing business inefficiencies Geoff Watts, chief executive of EDITD, a consultancy working with ASOS, says: “All the risk carried by a brand is around having the right product at the right price at the right time.” Maverick Transportation, one of the largest flatbed transport companies in the US, uses real-time analytics to enable fleet managers to supervise around 50 on-the-road drivers Information from vehicle breakdowns and hard-braking incidents to route and location updates are continually transmitted from the drivers and their vehicles, updating in real time on their managers’ software “dashboards” Real-time business This is what is known as real-time business As these examples show, the benefits vary by industry, but there are some common themes Tracking customer buying signals in real time, for example, allows organisations to be responsive to momentary fluctuations in demand Monitoring operations in real time allows issues to be addressed before they inflict any damage, and for processes to be instantly recalibrated in response to events And there are challenges too, of course Many of these are technical—processing and analysing real-time data may require new techniques But others are organisational Real-time transactions require organisations to make decisions in milliseconds This cannot be done by human beings, so must be performed by algorithms—rules and heuristics represented in software Ensuring that these algorithms are properly designed to serve the organisation’s interests, without triggering unintended and potentially damaging consequences, is a new but increasingly vital capability Cisco Technology Radar / Another emerging issue is optimising business models for real-time transactions Printed advertisements are not auctioned through thirdparty exchanges, but the ability to compare bids in less than the time it takes for a web page to render makes that approach viable for digital advertising How might organisations identify and implement new business models for real-time business? More information at https://techradar.cisco.com Similarly, what organisational structures and management practices are optimal for real-time business? Are the ways in which labour is currently divided, and knowledge shared, appropriate for the real-time economy? And what role human employees play when operational decisions are made automatically in an instant? The aim is to allow businesses to share in the experience and analysis of their peers as they seek to prepare their organisations for the impact of real-time business Every generation may feel that the pace of business is accelerating, but for this generation, it is not a feeling they should ignore These are the questions that Leading in real time, a Cisco Technology Radar research project conducted by The Economist Intelligence Unit, will examine In a series of video interviews, executives from organisations that are pursuing real-time business initiatives will share their experiences of how it has affected their organisation, its strategy and the way in which it is managed Meanwhile, a global survey of business and technology leaders will examine the significance of real-time business for companies today, assess how well prepared they are for its impact, and examine how they believe it will influence their future The results of this survey will be analysed in a series of articles focused on the following industries: retail, manufacturing, healthcare, energy and utilities, and transport - Written by The Economist Intelligence Unit Americas Headquarters Cisco Systems, Inc San Jose, CA This article, written by The Economist Intelligence Unit and sponsored by Cisco, examines global organisations’ use of real-time information and its impact on strategy and management It is based on a global survey of 268 executives, just under one-third of whom hold positions in the IT department, while 47% are members of the C-suite Respondents were drawn from companies in the healthcare, transport, retail, healthcare, manufacturing and energy sectors, 49% of which have annual revenue over US$500m Asia Pacific Headquarters Cisco Systems (USA) Pte Ltd Singapore Europe Headquarters Cisco Systems International BV Amsterdam The Netherlands Cisco has more than 200 offices worldwide Addresses, phone numbers, and fax numbers are listed on the Cisco Website at www.cisco.com/go/offices Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S and other countries To view a list of Cisco trademarks go to this URL: www.cisco.com/go/trademarks Third party trademarks mentioned are the property of their respective owners The use of the word partner does not imply a partnership relationship between Cisco and any other company (1110R) CISCO TECHNOLOGY RADAR ... economy? And what role human employees play when operational decisions are made automatically in an instant? The aim is to allow businesses to share in the experience and analysis of their peers as... course Many of these are technical—processing and analysing real-time data may require new techniques But others are organisational Real-time transactions require organisations to make decisions in. .. Similarly, what organisational structures and management practices are optimal for real-time business? Are the ways in which labour is currently divided, and knowledge shared, appropriate for the real-time