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The Gartner Definition of Real-Time Enterprise
01 October 2002
Alexander Drobik, Mark Raskino, David Flint, Tom Austin, Neil MacDonald, Ken McGee

Document Type:  Commentary
Note Number:  COM-18-3057
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Creating a definition clarifies thinking. Sharing the definition with others can give them a head start in reaching their own understanding.


What You Need to Know

The RTE is not another technology in search of a problem: It is a business improvement concept and we define it as such.

Analysis

The Gartner definition of real-time enterprise (RTE) is:

"The RTE is an enterprise that competes by using up-to-date information to progressively remove delays to the management and execution of its critical business processes."

Those who have tried to craft an agreed definition will know that it can take a great deal of effort to produce something that should be simple and effortless for the reader to understand. Within Gartner Research, the search for the RTE definition involved about twenty analysts from different backgrounds, disciplines and time zones and it took about three months to evolve, resolve and refine. Behind each carefully chosen sub-clause there lies a resolved debate or carefully weighted emphasis.

"The RTE..."

"The RTE" is used rather than "an RTE" to emphasize that this is a relatively abstract thing — a goal to strive toward. It is unlikely that an enterprise will declare itself to have become "an RTE," in the same way as it was irrelevant for an enterprise to ever say, "we are an e-business." Progression is asymptotic — real-world organizations will always remain inefficient in their speed of response. Optimal RTE capability is a moving target — as technology moves on and becomes cheaper to deploy, so we may be able to improve a process further. We note that leading-edge organizations, such as Dell Computer or Ryanair, continue to improve processes by making them faster, through using more-advanced technology.

"...competes..."

Although it is not a complete business strategy, the purpose of pursuing the RTE agenda is to gain competitive advantage, either directly (for example, through faster customer service) or indirectly (offering lower prices as a result of a lower cost base). The enterprise competes for customers if it is a business, or citizen approval if it is in the public sector.

"...by using..."

You may have the best IT systems in the world — moving data as instantaneously as it is possible to achieve. However, technology excellence is useless if that data never has an impact on a person, process or decision. Use of information is a key to the RTE. Prescience must remove decision and process delays to deliver value.

"...up-to-date information..."

We might have used "instantaneous" or "zero latency" here, but we wanted a term that was down-to-earth, meaningful and instantly understood by a wide audience. Real business change comes much more easily if everyone can understand the idea. In a theoretically perfect multi-enterprise technology grid, data would be captured at the point of creation and transmitted almost instantaneously — a true, zero latency architecture. What matters most, is whether it is as up-to-date as necessary, for optimum process operation or decision effectiveness, at the point when it is used. Beyond a certain point, speeding information flow or sensor data reporting frequency ceases to have a meaningful, incremental benefit, while the costs increase disproportionately.

"...to progressively remove delays..."

The RTE is not a six-month project, it is an ongoing program — an endeavor. Also, no complex, end-to-end process cycle time can be reduced from its current state to an optimal state in one single action. Repeated attacks must be made on process cycle times. There are many reasons for this, but perhaps the most important is that competitive advantage is very rarely sustainable in modern economies. If you cut costs and win customers by halving the new product development cycle, your competitors will follow, and you will be forced to halve it again. And, of course, as new technologies (such as photo messaging, radio frequency identification tags and location-based services) appear and mature, you have the opportunity to revisit time-based process improvements.

"...to the management and execution..."

This clause of the RTE definition deals with extent by listing management and execution. The early debate about RTE had a strong tendency to center on operational processes within enterprises, such as supply chains, consumer bank account transactions or contact center response times. However, many enterprises, especially those that have already applied IT to operational processes in the past, will find real and significant benefits by applying the approach to higher-order knowledge worker and managerial processes.

"...of its critical business processes."

Can any enterprise manage to apply time-based transformation to every process, at the same time and with equal vigor? We do not believe so. Indeed, to try would be highly counterproductive. So this definition focuses on critical processes, those of high value and importance, the improvement of which will significantly affect the bottom line. We retain the use of the term "business process" because it is clear and universally understood, although we often refer to "end-to-end cycles," which represent the breadth of span and the event-to-response nature of enterprise-level time-centric change.

But where is the technology?

There is no explicit reference to IT or the Internet in this definition. It is not needed because the only feasible way to leverage real-time principles is to use IT as the enabler. The definition focuses instead on the business purpose and value return.

Key Issue
How will emerging technologies change business operations that in turn will demand new IT planning directions?

This research is part of a set of related research pieces. See AV-18-2919 for an overview.