Christopher Meyer once described his job as "shining the headlights a little farther down the road," meaning that, as vice president and director of Cap Gemini Ernst & Young's Center for Business Innovation in Cambridge, Mass., he is focused on what lies ahead for business. His work, informed by research and an international network of leading thinkers, is shared with clients and more than 500 executives who visit the center each year.
Clearly in sight now: the increasing connectedness of the economy, and the implications that has for how companies are organized, operated and managed. Everything moves faster, and companies are inexorably propelled toward "real time"little if any delay between an event and a response, between a customer order, its shipment and the restocking of inventory, for example.
That's good, but connectivity and speed also introduce volatility. Consider the recent increase in business failures, stock market gyrations and unpredictable corporate results. To survive, companies must learn to adapt and evolve amid uncertainty. So profound is this new order of things that Meyer often invokes nature as a model. Deputy Editor Terry A. Kirkpatrick talked with Meyer about the event-driven enterprise, how it can be beneficial, where it can be scary and why it is unavoidable. An edited version of Meyer's remarks follows.
Look at any trend in business, and the direction is clear: Response times are going down. The response time that an individual will tolerate for a Web page to load. The response time a catalog customer will tolerate for receiving an order. Six weeks to deliver? Don't bother.
Acceleration is a fact of economic life, and the real-time enterprise is unavoidable. Real time means that a company can sense and respond faster than changes in a relevant feature of the environment. The response is just a little faster than is needed. For example, since you never know when you're going to want current financial information, the continuous closing of the books that Cisco Systems talks about is real time in that case. With an airline reservations system, real time means that it's fast enough that nobody reserves a seat that isn't there because the system didn't reflect somebody else's action.
The trends are showing us the way, and we have the choice of letting it happen to us or riding the front of the wave. It's happening because we're making the world more connected and more responsive through autonomous agentssoftware and other technology that senses an event and is capable of making decisions in response to it. Agents don't have to be fancy; a thermostat is an autonomous agent. The time between some signal being generateda customer order or a stock achieving a certain price or a seismic register of an earthquakeand the response to it is getting shorter and shorter.
Red Lobster, for example, subscribes to Landsat satellite data, because they want to know the temperature of the Gulf of Mexico. Why? Because the temperature affects the rate at which shrimp breed, which in turn affects the size of the catch, which then affects the price. If they can sense this variable, they can reduce their costs, because they will know when to go into the market and when to stay out. Multiply that on the order of a billion times, and you have businesses all over the economic map sensing and responding in close to real time.
This article was originally published on 11-02-2002