Automating management

Author: Unknown. Link to original: (English).

Translations of this material:

into Russian: Автоматизация управления. 7% translated in draft.
Submitted for translation by spuf 27.03.2011


YOU can't accuse Gary Reiner of being verbose. Ask General Electric's chief information officer a question, and you get an answer that is right to the point And he regularly checks whether his listeners are still following: "Are you getting what you need?"

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

Information technology is speeding up business decision-making and creating a real-time economy, says Ludwig Siegele

GE's aim is to monitor everything in real time, Mr Reiner explains, calling up a special spreadsheet on his PC: a "digital dashboard" with green, yellow and red colours that signal the status of programs that are critical to GE's business. If one of them stays red or even yellow for too long, Mr Reiner gets the system to email the people in charge via the network. 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. Now all GE's senior managers have them. The principle is always the same: the dashboard compares how certain measurements, such as response times or sales or margins, perform against goals, and alerts managers (in real time) if they need to take action.

GE, which estimates that its digitisation efforts saved it $1.6 billion in just one year, has a long history of innovative business management. 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 up and connect to form networks with their business partners, they make the entire economy more and more real time, creating not so much a "new" but a "now" economy.

Instant gratification

But the real-time enterprise is not simply about speeding up information flow. It is also about being able to monitor a business continuously and react when conditions change. Today, businesses "are mostly shooting in the dark", says Michael Maoz, of Gartner, an IT consultancy. Real-time technology, he predicts, will give firms a window into their business they never had before.

Mr Maoz also emphasises the third main benefit of a real-time enterprise: using newly available information to offer new products and services. New hardware, such as wireless sensors, makes it possible to gather ever more information and enter it into a company's computer systems. By themselves, these data would just contribute to the increasing information overload. But they also present a new business opportunity: to develop software that analyses them and suggests ways of optimising the supply chain, or even automates the response to certain kinds of new information.

How much will all this change the company and the economy as we know it? IT will probably not spell the death of big firms. But real-time technology will have an impact on the workings of companies. It is also likely to make economies more fluid, and perhaps more volatile. The financial markets have already shown that putting even parts of the economy on autopilot can lead to accidents. The stock market crash of 1987 was caused in large part by automated program trading. Perhaps, one day, the "now economy" will have to have circuit breakers installed.