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Real-time businesses — organizations that can respond immediately to opportunities and challenges by executing key business processes — have several advantages. They are better able to satisfy customers’ and employees’ preferences for getting answers right away rather than waiting a few days. And making data readily available and giving product teams the tools to iterate quickly helps enterprises stay on top of market trends and a step ahead of the competition.
A recent brief from the MIT Center for Information Systems Research highlights the benefits of operating as a real-time business. An MIT CISR and Insight Partners study of nearly 260 companies found that those ranked in the top 25% for their real-time business operations had 62% higher revenue growth and 97% higher profit margins than those ranked in the bottom 25% of real-time operations. More specifically, the study found that companies in the top quartile were 22% better at operational efficiency, 20% better at innovation, and 17% better at risk management compared with the bottom quartile.
For the study, CISR chairman and senior research scientist United Airlines chief information officer Jason Birnbaum, and researchers Elizabeth van den Berg and Maxime de Planta looked at how United Airlines implemented real-time business operations that have resulted in customer experience ratings nearly twice the industry average.
They identified four capabilities that drive real-time business operations.
Real-time data for decision-making, whether for automated systems or employees, makes it possible to track key performance indicators and enables real-time risk management. By consolidating its data sources into a single hub, United can plan more effective flight routes, understand reasons for delays, improve fuel efficiency, and help passengers make connecting flights.
Companies ranked in the top 25% for real-time business operations had 97% higher profit margins than those in the bottom quartile.
An integrated customer experience helps buyers navigate their journey, complete with product recommendations, self-service support, and real-time fulfillment. United focused on its mobile app, which 85% of customers use to book and rebook flights, check in, track bags, and chat with agents. Looking ahead, the company hopes to build predictive tools to anticipate customers’ needs and proactively offer them options such as real-time booking changes.
Business agility helps leadership react to opportunities or threats without the need for layers of approvals or bureaucratic change management processes. For a large project to modernize its legacy ticketing system, United has broken down the process into small modules that can be approved in hour-long meetings. This eliminates the need for a big governance mechanism to allocate capital, and a lengthy approval processes than can slow things down.
A high-quality employee experience is made possible thanks to the automation of repetitive tasks, which leaves workers more time to focus on process improvements and make individual contributions to company performance. Having learned through data analysis that real-time responses resonate with fliers better than compensation after they experience a problem, United created an application that helps flight attendants address customer complaints in the air.
The authors noted that the ability to create and consolidate real-time data is the foundation for a real-time business. Given that any innovation can be daunting, they recommended that business leaders begin with “just enough” data to support an integrated customer experience, business agility, and a high-quality employee experience. As value is generated, the organization will be more confident in taking on large-scale initiatives that drive performance improvement.
Read the research brief: Top Performers are Becoming Real-Time Businesses
