In a study with Insight Partners, MIT researchers found that companies operating in the top quartile versus the bottom quartile of “real-time-ness” had more than 50 percent higher revenue growth and net margins—a huge premium. The top-quartile companies automated processes and enabled fast decisions by employees at all levels using trusted and easily accessible data. Real-time decision-making enables digital customer journeys that are more seamless, empowered employee experiences, and increased business agility.
The study explores the next step for companies that have gone through a digital business transformation and describes what it takes to become a Real-Time Business (RTB). A case study of United Airlines, Inc. (United) helped illustrate this journey. The findings were based on a survey of C-suite leaders at 259 global companies in multiple industries with an average revenue of $10 billion and in-depth interviews at three companies.
“There is no longer time to pass decisions up and down the traditional hierarchy to receive permissions or approvals,” said Peter Weill, the report’s co-author, MIT Sloan School of Management senior research scientist, and chairman at MIT CISR. “Operating in real time helps companies sense and respond to changes in an increasingly volatile business environment—and customers and employees are more likely to be satisfied by immediate action.”
Real-time data for decision-making: At the foundation of an RTB is having easy access to trusted real-time data for use as inputs to automated decision-making and in decision-making by employees and systems, tracking company performance on key metrics, and real-time governance and risk management.
Integrated customer experience: Real-time decision-making enables digital customer journeys that are more seamless, provides self-service, and supports customers in accessing and easily combining assorted company products to fill specific needs.
Business agility: An RTB’s distinguishing attribute is the ability to sense a threat or opportunity and change direction without getting multiple approvals or undergoing a reorganization. The combination of real-time data and simplified governance empowers people at all levels of the company to identify opportunities and issues.
High-quality employee experience: RTBs use real-time data to create a better employee experience and transform jobs. Automating tasks allows people to spend far less time doing repetitive and often paper-intensive work and instead focus on improving processes and innovating. Using real-time data in dashboards enables employees to better understand how the company is doing and how they contribute to the company’s performance.
According to the authors, a mindset change is required to become a top-quartile real-time business. “Most companies need to move from relying on gut feelings and experiences to evidence-based decision-making, with high levels of trust in and empowerment of employees, along with increasing automation and the use of AI, such as by alerting customers to a potentially fraudulent banking transaction,” the report says.
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Source: MIT CISR
