Organizations Operating in Real Time (Real-Time Enterprise) and the Role of IT as a Tool Supporting Their Management Systems

Organizations Operating in Real Time (Real-Time Enterprise) and the Role of IT as a Tool Supporting Their Management Systems

Jerzy Kisielnicki (Faculty of Management, University of Warsaw, Poland) and Marek Michal Markowski (Faculty of Management, University of Warsaw, Poland)
DOI: 10.4018/978-1-7998-3473-1.ch043
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Abstract

Constant changes in the market and increased competition make it necessary to dynamically adapt the way of running a business. The pressure of constant changes implies the emergence of requirements for information technology, which is the basic tool for information processing in organizations. The necessity of immediate reaction to business changes, reduction of time of business processes realization, immediate retrieval of information and its sharing, became the foundation of the idea of a company processing real-time information (Real Time Enterprise, RTE). RTE provides real-time information to employees, customers, suppliers, and other business partners, ensuring timeliness and consistency across all IT systems. The possibilities of RTE implementation thus become an important element of the IT operation and the entire enterprise. It seems to be advisable to find determinants of designing a proper IT system supporting the operation of an enterprise that processes information in real time (RTE).
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Introduction

An RTE is an enterprise processing information in real time – an organization focused on quick response to the needs of the market and client, fast decision making, transparency and immediate information sharing among internal groups (Borg 2011, Šibalija, 2018).

Competition within this time-frame has become crucial for many businesses and quick response is the key element of success in face of critical events minimizing costs and maintaining perfect quality of activities (Cundius & Alt, 2017). Specifically, there is the necessity to apply tools enabling access to critical information in proper time and place (Karnouskos & Colombo, 2011), which allows for quicker decision making (Olofson & Morris, 2013).

The functioning of RTE without support from IT technologies seems impossible. Yet, a number of organisational changes need to be conducted within the enterprise which will be ‘solidified’ by IT. The aim is, among others, to focus on the activities which produce a bigger value (Hongren et al., 2015) and allow for optimation of business processes (based, among others, on Lean), defining goals and preparing analysis of the time courses (Kyte 2004; Brand, 2012), as well as modification of some specialists’ qualifications (Vasarhelyi, 2010).

On the basic level IT solutions for RTE should enable:

  • 1.

    Monitoring of the enterprises and its surroundings in real time,

  • 2.

    Access to information in real time,

  • 3.

    Acceleration of business processes.

The main objective of this chapter is to shed some light in the determinants of IT systems for RTE. First, the basic RTE areas will be analyzed. Second, the IT requirements for these areas will be presented, including sets of proposed determinants. Finally, conclusions and future research will be proposed.

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Background

The constant changes in the market and the increase in competition make it necessary to dynamically adapt the way of running a business (Wirtz et al., 2007). Enterprises must develop business flexibility by adapting new business models (Sikri, 2015) and implementing effective innovations (Grauer et al., 2010; Zhou et al., 2018). Technological progress changes the way enterprises conduct business (Vasarhelyi & Alles, 2008), requiring the use of tools that provide access to critical information at the right time and the right place, supporting rapid decision-making (Azvine at al., 2005). The reduction of time delays becomes the goal and way to implement the real-time system (Kejariwal & Orsini, 2018).

Therefore, the competitive advantage of real time enterprises (RTE) results from responding faster than the others the changing business conditions and opportunities.

Real time economy already exists (Vasarhelyi, 2010) and regards numerous industries, from fashion (Luskham, 2011), through finance (Kekwaletswe & Lesole, 2016), to software production (Martínez-Fernández, 2018). Processing information in real time – i.e. RTE – is also the core of Smart Factory in the Industry 4.0 concept (Herrmann, 2018).

Key Terms in this Chapter

Determinant: Factor that resolutely controls or affects what happens in a particular situation.

Real Time: Receiving and processing of source data by the system immediately at the time of their creation

RTE: Real Time Enterprise, enterprise which processes information in real time.

CRM: Customer Relationship Management, IT system which manages customer relations, used at sale, marketing, customer service and contacts center.

SCM: Supply Chain Management, IT system which encompasses all activities related to flow of goods and services.

Industry 4.0: Trend towards automation and data exchange in manufacturing technologies and processes. It encompasses the internet of things (IoT), cyber-physical systems (CPS), artificial intelligence (AI), cloud computing and cognitive computing. A concept related to RTE, in the field of data processing in real time and the fastest possible business processes

ERP: Enterprise Resource System, encompasses the whole of internal processes in the enterprise, for example, finance accounting, controlling, purchases, production, distribution.

Smart Factory: Manufacturing based on computer-integrated manufacturing, interoperable systems, digital information technology, high levels of adaptability and rapid design changes (f.e. on demand), optimization of the supply chain.

SCADA: System Control And Data Acquisition, IT system which serves for visualization, supervision and control of complicated technological lines, industrial processes, machines and equipment.

MES: Manufacturing Execution System, IT system which provides information needed for optimization of production activities.

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