The Real-Time Imperative

IT organizations are changing business processes to wring the most value from their information
OUTLOOK 2005Establishing processes that support real-time information is a top business priority for many IT organizations in 2005.

United Parcel Service Inc. has invested about $600 million in establishing and using real-time data and processes, says Jack Levis, portfolio manager of UPS's industrial engineering group. UPS ships more than 13 million packages each day throughout the world via a fleet of about 88,000 motor vehicles and more than 575 jets, and up-to-the-minute data is critical for managing such an expansive operation. In 2005, UPS will expand its real-time package-flow technologies; the improvements will cut the distance UPS delivery vehicles travel by more than 100 million miles each year and are expected to save the company 14 million gallons of fuel annually, Levis says.

More IT organizations are changing business processes to maximize the value of their information, says ARC Advisory Group analyst Steve Banker. To gain real-time visibility, some companies are switching to a single integrated enterprise-resource-planning system instead of running multiple systems, Banker says. Others are deploying portals, supply-chain event-management software, EDI, middleware integration tools, voice recognition, and emerging technologies such as radio-frequency identification. "It takes a variety of these IT tools to make real-time information work," Banker says. Other emerging practices include the use of dashboards and scoreboards to support performance management, hourly operational reporting, and real-time data warehousing, Forrester Research analyst Philip Russom says.

UPS leverages data synchronization to support the real-time exchange of accurate information across enterprise systems so information gets to the desired destination before the shipment. UPS has a distributed network architecture within its package-delivery centers, where servers exchange information with the company's two main data centers in Atlanta and Mahwah, N.J. In a typical scenario, after a customer uploads shipping data to UPS's online site, it runs through the company's main data centers, gets passed on in real time to the package centers, and ultimately ends up in the drivers' handheld computers.

Companies already have spent a lot of energy, effort, and money optimizing and automating specific operations such as supply-chain execution and warehouse management, says John Moore, VP and general manager of enterprise services at ARC Advisory Group. But many are still struggling to isolate processes that need real-time treatment and tie together the requisite systems that affect those processes.

"Companies have to be careful about how far they take this because they can't be real time with everything," AMR Research analyst Erik Keller says. "It's not just one technology that's going to enable the process. It's a combination of successfully pulling the data together from all the systems already existent within companies."

Compliance issues such as the Sarbanes-Oxley Act also have overshadowed real-time projects, analysts say. Moore says companies have a long way to go before they can serve up all the right information in a timely fashion.

Illustration by Gordon Studer