1.3 Business Agility Is Becoming a Competitive Requirement
The ultimate goal of the real-time enterprise is business agilitythe ability to rapidly adapt to change. Business is changing and the rate of change is accelerating. It is becoming clear that maintaining the status quo is no longer adequate. Companies must adapt to change or perish. The real-time enterprise is becoming a strategic initiative because it enables companies to respond rapidly to rapidly changing business conditions. In an audience poll of an ebizQ Web cast (Gold-Bernstein and White 2003), "Critical Success Factors for the Real-Time Enterprise," 76% responded that becoming a real-time enterprise was a current strategic business initiative, showing that real time is becoming an essential goal for organizations.
One company that has been successful as a real-time enterprise is Wal-Mart. As the world's largest business, Wal-Mart has done extremely well in operational efficiency, managing growth, and scaling its business. The Chief Information Officer (CIO) established three philosophies in the development of its systems that embody its approach to the real-time enterprise. Details are given in Case Study 1.3 (Lundberg, 2002).
Sidebar 1.3. Wal-Mart: Philosophies of a World-Class, Real-Time Enterprise
What do you think of when you hear the word Wal-Mart? The largest business in the world, an amazing success story, operational efficiency, or a global retail chain that is the best in the business? All of this has been said of Wal-Mart in the past. Managing the information systems for one of the largest distributed enterprises in the world requires discipline and flexibility. The IT organization in Wal-Mart has three basic philosophies that have made it into the world-class organization that it is today:
Distributed environment, centralized information systems
Common systems, common platforms
Merchants first, technologists second
Wal-Mart's IT organization has been able to manage through phenomenal growth by integrating its distributed empire back into centralized systems in Arkansas. This allows it to have control over its core applications and data while providing the necessary applications to a diversity of locations. Furthermore, Wal-Mart has created in-house teams that focus on integration. These teams do not focus on one product or process, but on the needs of the business. This allows them to have a core competency in their integration needs. These teams form a hub for dispersed networks of people and allow for better interaction between internal and external resources.
Having common systems and platforms allows them to control the infrastructure and train people allowing for more rapid deployment of new capabilities. By having the architecture in place and migrating it over time, the organization is able to build core competencies in its infrastructure enabling better integration.
Lastly, an emphasis on the business means that functionality is driven by the business and the related strategy. This theme is consistent in all world-class organizations that have achieved substantial business results from integration. Since the Internet age began, not one external venture in retail was successful. Almost 70% of these external activities were re-integrated with the parent organization. The rest were shut down.
Wal-Mart represents the kind of company that has been able to develop its own philosophies and core competencies in enterprise integration that make it a world class IT organization. Without this competency organizations will either flounder from a lack of focus and experience or rely entirely on external organizations that cannot understand the business or respond to its needs in the way that Wal-Mart is able to.