Blog: Richard Hackathorn

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Becoming a Real-Time Enterprise: Is the Book worth It?

Prof. Behnam Tabrizi of Stanford University has published a book whose title intrigued me. He has an impressive resume, having studied over 100 companies worldwide with McKinsey and written many publications, one of which received a scholarly award from Administrative Science Quarterly. Since I have researched the business value of low-latency data, I had high expectations that his book would give me insights into how real-time generates that value.

Prof. Tabrizi defines the Real-Time Enterprise (RTE) as based upon: getting the right data about the right processes to the right people at the right cost and at the right time to create and sustain competitive advantage. His thesis is that RTE failures are caused in three areas:

- Strategy: creating competitive advantage, reducing uncertainty and complexity
- Planning: achieving desired ROI, resolving critical discontinuities and latencies
- Implementation: capturing, monitoring, analyzing, interpreting data

He then divides the RTE into five modules: ERP, SCM, CRM, ERM (Employee) and PLM (Project Lifecycle). He illustrates his points with dozens of case sketches (mini-studies) from notable companies in a variety of industries.

I was disappointed with the book overall because I did not find those expected insights. In particular, I was concerned about:

First, the use of the term ‘right’ five times in RTE definition begs for more detail. What is ‘right’ is a subjective judgment that is left as an exercise for the reader.

Second, competitive advantage is overused giving the impression that RTE is one that is constantly looking over one’s shoulders at what competitors are doing. This looking backward, rather than forward, gives the wrong message that innovation only comes from competitive threats.

Third, the five modules for RTE systems seem passé by oversimplifying and even fragmenting the enterprise into silo applications.

One glimmer of insights was contained in Table 2-1, which expanded on the factors for reducing complexity and uncertainty.

In summary, the case sketches are worth the price of the book, but lower your expectations for receiving insights into the mechanisms of real-time to deliver business value.

Posted by Richard Hackathorn on Monday, 27 August 2007 | Permalink