Once upon a time, there seemed no end in sight to the magic that the Internet could work on public markets. Then came the dot-com crash of 2000, where over an 18-month period almost $3.5 trillion evaporated as financial markets imploded. Many concluded that the Internet era was over. Others, like GEs legendary CEO, Jack Welch, concluded that the impact of the Internet on business had just begun, for the Internet wasnt about a Web site or an IPO; it was all about a major business transformation.
That transformation is still in its early stages and is now being led by a couple of new three-letter acronyms: RTE (real-time enterprise) and BPM (business process management). Theres lots of hype, but under the hype of these buzzwords, a new world of gaining and sustaining competitive advantage is unfolding. The impact of the Internet doesnt mean a change in what goods and services a company provides, nor does it mean the invention of new industries or phantom dot-com business models. Instead, universal connectivity signals a change in how companies deliver goods and services. Sound boring? Its not. Operational transformation—the use of emerging business process management techniques to exploit ubiquitous and real-time Internet connectivity—is the next frontier of competitive advantage. The process-managed, real-time enterprise is a formidable new kind of competitor springing up in almost every industry.
We are on the cusp of a new opportunity for achieving business advantage that GE management described two years ago as "the greatest growth opportunity our company has ever seen. GE is in the midst of an incredible transformation brought on by the Internet explosion. Our pursuit of digitization will rapidly change our dealings with our vendors, partners, and most of all, our customers." During the mid-1990s, many companies were concerned that their industries might get "Amazoned"—that a dot-com might turn their industries upside down. Now, companies in all industries better be worried about becoming "GEd." General Electrics digitization initiative is transforming as many business processes as possible, especially those with which customers interact.
GE is not alone. JetBlue Airways, Wal-Mart, Virgin Mobile, Toyota, Progressive insurance and other companies have transformed the business game in their industries by becoming process-managed, real-time enterprises. Companies must transform the way they conduct business, or rivals that reinvent the way they operate will run circles around them. Thats the reality behind the real-time enterprise.
Peter Fingar, executive partner in the digital strategy company Greystone Group, is co-author of "The Real-Time Enterprise: Competing on Time," recently released, and "Business Process Management: The Third Wave" (available at www.mkpress.com). Free Spectrum is a forum for the IT community and welcomes submissions. Send contributions to email@example.com.