Leading in real time

An investigation of the impact of real-time business on strategy and management.

SURVEY FINDINGS

Leading the real-time organisation
Written by The Economist Intelligence Unit

A new study by The Economist Intelligence Unit reveals
how real-time data is reshaping businesses – and the
challenges it presents to leaders.

I

n the early 1970s, the Chilean government
established an ambitious project to run the country’s
economy by computer. Dubbed ‘Project Cybersyn,’
the concept relied on real-time information sources
and a decision support system to act upon the data as
quickly as it came in.
In the operations room, planners would review analysis
of real-time factory data and even measures of citizen
well-being. Further screens presented simulations
of the future of the Chilean economy under various
conditions: tweak prices or production quotas and
you could simulate the results. The hope was that the
country could largely run itself.
The project turned out to be too ambitious for the
technological capabilities of the time. But today,
for many businesses, this once-ambitious vision is

becoming reality.

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A new study by The Economist Intelligence Unit,
sponsored by Cisco, investigates how companies are
using real-time information, and how it affects the
way in which they are managed and led. Based on a
survey of executives in the healthcare, manufacturing,
retail, transport and energy sectors, the study reveals
that real-time information is accelerating the pace
of business, boosting operations management and
customer service, and giving rise to new products and
services.

But it is also forcing organisations to rethink their
business models and confront difficult questions
about how reliant they should be on automation.
Company leaders face some tough choices ahead
as they navigate the growing use of real-time data in
business.

More information at


The growing breadth of real-time business
The vast majority of companies are using real-time information in some capacity
today, the survey reveals. Nine out of ten (92%) respondents say they make at

least ‘limited’ use of such information.
However, the extent and sophistication of realtime information usage varies drastically between
companies and industries. While one in five (20%)
make only limited use today, 31% are developing or
implementing a real-time data strategy, and 41%
have successfully incorporated real-time information
into their business practices (see chart 1).

monitoring their own stock in real-time, many
are now also tracing up to the minute consumer
trends via social media. Fashion e-commerce site
Missguided, for example, updates its stock every
single day in response to what customers are talking
about online.

By contrast, only 20% of respondents
from the manufacturing sector
have made it beyond the planning
stages of their real-time information
initiatives.

Its use is most widespread in the transport sector,
where real-time monitoring of vehicles is an
established practice. Six out of ten (62%) transport
executives surveyed say they have successfully
incorporated it into some or all business practices.
For transport companies, real-time information
and automation has long been a crucial part of
operations, and urban transit operators and logistics
companies alike continue to innovate. The hotly

anticipated advent of driverless cars will only
intensify the use of real-time information in this
industry, as remote monitoring becomes increasingly
vital.

This may come as a surprise, given the ample
opportunities for managing and monitoring
manufacturing processes in real-time.
But pioneers within the industry, such as BASF and
Proctor & Gamble, are feeding up-to-the-minute
information from the market, such as consumer
opinion and macroeconomic data, back into their
supply chain and production processes to ensure
they are producing the right products at the right
quality.

The retail sector is also leading the way in its use of
real-time data; 50% of respondents from the sector
say they have incorporated it into up to half or more
of their business practices. Not only are retailers

How would you describe the extent to which your organisation incorporates
real-time information into its operations?
% of the respondents
We have successfully incorporated real-time information into
over half of our business practices

19%

We have successfully incorporated real-time information into

up to half of our business practices

22%

We have recently started to implement our real-time business
strategy

18%

13%

We are developing a real-time business strategy
We make limited use of real-time information but we have no
overarching strategy

20%

8%

Not at all but we plan to do so in future

0%

Not at all and we have no plans to do so

% of the respondents
0%

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2%

4%

6%

8%

10%

12%

More information at

14%

16%

18%

20%

22%


Which of the following are the biggest challenges your organisation faces in
using real-time information
% of the respondents

Incorporating real-time information into existing business
processes

37%

Incorporating the analysis of real-time information in strategic
decision-making

38%
36%

Having the skills to analyse and interpret real-time information
Designing new business processes around real-time
information

35%
32%

Collecting relevant real-time information
Choosing which decisions based on real-time information
should be automated and which should be taken by employees

31%
28%

Responding rapidly to real-time information
25%

Justifying the investment required


% of the respondents
0%

5%

Most companies use real-time data to help
manage their operations: 62% of respondents
say that it already plays a major role in operations
management. But it also plays a major role in
customer service for 50% of respondents. Real-time
information access is an important component of an
engaging customer experience. Currency exchange
provider Travelex, for example, has built real-time
account information into its customer app to enrich
the experience.
And new applications are unfolding as digital
components and communications networks become
increasingly ubiquitous. One quarter of respondents
expect to be using real-time data in product design
and development within the next three years,
reflecting the potential for sensors embedded into
products to reveal unprecedented insight into how
they are used and how well they perform. GE’s wind
turbine manufacturing practice, for example, uses
real-time sensor data to build highly detailed virtual
models of its products, allowing it to optimise their
performance and future development.
Of course, the use of real-time data is not without
its challenges (see chart 2). The survey reveals that
industries encounter different issues depending on

the extent and maturity of their real-time data use.
In the manufacturing sector, which is in the early
stages of adoption, the most common challenge
is collecting relevant real-time information (44%).
This is most likely a reflection of the age and
heterogeneity of their production plant, and the fact
that they may not have direct access to customer

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10%

15%

20%

25%

30%

35%

data. Their second-most common challenge
was developing the skills to analyse and interpret
real-time information (41%). In other words,
manufacturing companies are still building the
technical and organisational resources that real-time
business requires.

In the transport sector, meanwhile, companies are
wrestling with more sophisticated concerns, such
as the role of automation within the organisation.
Automation goes hand in hand with the use of realtime data. If companies wish to react to split-second
updates as they occur, some degree of automation
will almost always feature.
More than three quarters (76%) of companies in the
transport sector say they have automated business
processes in order to respond instantly to real-time
data. As a result, their most common challenge is
choosing which decisions should be automated and
which should be taken by employees, as identified by
48%.
At Transport for London, the UK capital’s public
transport operator, this question applies to how much
railway signaling should be automated. According
to Shashi Verma, the organisation’s director of
customer experience, this is mostly a matter of
complexity, with simpler signaling decisions being
automated and more complex ones left up to human
operators.

More information at


The impact on workers and leaders
As this discussion reveals, the use of real-time information is sure to have
an impact on workers. For one thing, it intensifies the need for analytical and
data management skills – 38% of respondents have hired experts in real-time
information (see chart 3) and 45% expect to within the next three years.


Chemicals manufacturer BASF is increasingly using
real-time data from outside the organisation to
better understand its business environment and so
plan production more effectively. This requires new
analytical capabilities not conventionally associated
with manufacturers. “Translating a real-world
problem into a mathematical model, hypothesis
building, interactive exploration, and so on require
new skills and capabilities,” says Dr Robert
Blackburn, BASF’s president of information services
and supply chain operations.

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Meanwhile, real-time information will remove
the need for some other workers. Some 45% of
respondents agree that certain job roles have
been eliminated as a result of their use of realtime information. In the transport sector, where the
use of real-time data is most advanced, 63% of
respondents agree.
This upheaval will not be limited to the lower ranks
of the organisation, however. As organisation’s
become increasingly automated and driven by real-

More information at



What measures has your company taken as a result of
its use of real-time information?
% of the respondents
Automate business processes in order to respond instantly to
real-time information

50%
45%

Invest substantially in the acquisition of real-time information
Change your company’s strategy in light of real-time
capabilities

41%

Substantially change your company’s business model in order

39%

Hire experts in real-time information

38%

Launch products and / or services that are only made possible
by the use of real-time information

38%
37%

Form new partnerships in order to acquire real-time information

Acquire one or more companies in order to boost your
real-time capabilities

24%
% of the respondents
0%

5%

time trends, they will require strategic leadership
that is responsive to real-time trends. This is already
proving problematic: 38% of respondents identify
incorporating the analysis of real-time information
into strategic decision-making as one of the biggest
challenges associated with its use – more than any
other option.
Company bosses who are used to setting strategy
on a quarterly or yearly cycle could soon become a
competitive disadvantage.
The EIU survey shows that use of real-time data is
expanding across industries and business functions.
As the use of real-time information grows, it forces
companies to be more agile and more automated.
This influence will challenge conventional modes of
working, all the way from the shop floor to the board
room.

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10%

15%

20%

25%

30%

35%

40%

45%

50%

Business leaders who wish to profit from this trend
must ensure they have the capabilities – both
organisationally and individually – to act at the speed
of real-time data.

This article, written by The Economist Intelligence Unit
and sponsored by Cisco, examines global organisations’
use of real-time information and its impact on strategy
and management. It is based on a global survey of 268
executives, just under one-third of whom hold positions
in the IT department, while 47% are members of the

C-suite. Respondents were drawn from companies in the
healthcare, transport, retail, healthcare, manufacturing
and energy sectors, 49% of which have annual revenue
over US$500m.

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