• Technology
  • The Economist

The Real-Time Economy: How about Now?

Information technology is increasingly taking the lags out of doing business, in effect creating a real-time economy.

You can’t accuse Gary Reiner of being verbose and inefficient. Ask General Electric’s chief information officer a question, and you get a three-sentence answer that is right to the point. He prefers show-and-tell to lengthy explanations and intellectual tangents. And he regularly checks whether his interlocutor is still following: “Are you getting what you need?”

Anything else would be a disappointment from someone in his position. After all, America’s GE is known for its almost obsessive quest for perfection. And Mr Reiner heads the company’s most important initiative: “digitising” as much of its business as possible. That not only means buying and selling most things online but, more importantly, setting up a digital nervous system that connects anything and everything involved in the company’s business: IT systems, factories and employees, as well as suppliers, customers and products.

GE’s aim is to monitor everything in real time, Mr Reiner explains, calling up a special web page on his PC: a “digital dashboard”. From a distance it looks like a Mondrian canvas in green, yellow and red. A closer look reveals that the colours signal the status of software applications critical to GE’s business. If one of the programs stays red or even yellow for too long, Mr Reiner gets the system to e-mail the people in charge. He can also see when he had to intervene the last time, or how individual applications—such as programs to manage book-keeping or orders—have performed.

As chief information officer, Mr Reiner was the first in the firm to get a dashboard, in early 2001. Now most of GE’s senior managers have such a constantly updated view of their enterprise. Their screens differ according to their particular business, but the principle is the same: the dashboard compares how certain measurements, such as response times or sales or margins, perform against goals, and alerts managers if the deviation becomes large enough for them to have to take action.

GE has a record of keeping ahead of the pack. In years to come, experts predict, many companies will use information technology to become a “real-time enterprise”—an organisation that is able to react instantaneously to changes in its business. And as firms wire themselves up and connect to their business partners, they make the entire economy more and more real-time, slowly but surely creating not so much a “new” but a “now” economy.

The Next Big Thing

Small wonder that the Silicon Valley hype machine has already appropriated the concept of real time. Venture-capital firms, and above all the most prominent among them, Kleiner Perkins Caufield & Byers, are promoting it. Software and networking start-ups are peppering their marketing materials with the term. There is even a new newsletter called Real-Time Report.

Wonderful, one is tempted to say: another buzzword out of Silicon Valley—just what we need in these difficult times. But real time is more real than it appears. The start-ups in this field are leading the counter-revolution to the dotcom mania. They are not about all-too-clever business models and breathless “Internet time” (for which read going public as quickly as possible), but about highly complex enterprise software, often based on serious mathematics, that can yield real savings if deployed and used correctly.


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