Debunking the Top 3 Myths

Ali Kutay Interview 

Today there are many misperceptions surrounding the “real-time” enterprise. While most companies recognize the benefits to operating in real time, many also believe that it is either costly or technically difficult to achieve. But the roadblocks to real-time business operations may not be so impenetrable, thereby making the real-time enterprise more attainable than imagined. The following interview sets out to debunk a few of the commonly perceived myths surrounding the cost and complexity of implementing and operating in “real time,” regardless of industry.

 

Ali Kutay is president and CEO of GoldenGate Software, a company helping the world’s largest global organizations, and some smaller ones too, make the move to real time. While the concept of real-time information is still viewed as almost “cutting edge”, GoldenGate has actually been providing real-time capabilities to large organizations around the world for over a decade. Talking with Mr. Kutay, we set out to explore the myths of achieving real-time business operations and share a little reality for those wondering if real time is for them, and more importantly, how to get started.

 

Q) How does GoldenGate and the industry at large define real time?
 

That’s a good place to start, and a fairly straight-forward question but with a more complex answer. In fact, real time can mean anything from the delivery of information instantly, to sub-second latency, to a delay of several seconds or minutes. People throw around the term real time in different contexts, which has eroded its meaning and contributed to the confusion out there.

 

Never before has real time been more relevant. The truth is, we all live in a world of instant gratification and around-the-clock consumer transactions and consumption, and because of this “always open” global economy, real time means NOW, IMMEDIATE, ON DEMAND! Take a look at any business today, regardless of the type of industry they are in, most find the need to offer up real-time answers to consumer’s questions. Online retailers, banks, financial services, airline and travel providers all need to provide answers to their customers in a fast and efficient manner.

 

Today’s consumer has come to expect an almost instantaneous answer. It is the data feeds behind the scenes here where GoldenGate comes in. We are in the business of providing ongoing access to the various users and consumers of this data – from sales to marketing and operations to customer service.

 

Therefore, GoldenGate’s definition of real time means that once the transaction is committed on the source operational database system, it is made immediately available to those who need that data within the enterprise. From an infrastructure standpoint, this is what GoldenGate does. Many other industry providers claim that they deliver real-time capabilities, but a few hours old or a day old is just not real time.

 

I speak with executives every day who struggle to make sense of separating the hype from the reality and it’s important to make this clear distinction. You will probably have heard of the term “right-time” and the truth is – that term refers more to how the business consumes the information. It is true that not every aspect of the business needs data with sub-second latency. However, you can commit to providing access to the freshest data, and then let the business users decide how and when they need to use it. Why would you not choose real-time if it were the same price or cheaper? It would be like choosing the Skoda over the Cadillac – just because! It makes no sense. 

 

Q) Why is real time getting a lot of attention lately?

 

The concept of real time is nothing new; in fact it’s been in discussion among IT and business groups for well over a decade. But in the current business climate, real time has become a driving and competitive force. Real-time Business Intelligence is no longer the realm of ‘pie in the sky’ board room discussions, but has taken on a sense of urgency from the executive team all the way to the data center, as everyone in the organization tries to figure how to access information about the business faster in order to drive better decision making and all without breaking the bank.

 

Real time is already a reality for us in our daily lives as consumers – shopping, banking, communications, education – but many organizations are still trying to catch up. Across a wide range of sectors, businesses recognize that the “freshness” of their business data is a critical factor toward generating revenue and maintaining competitiveness. In recent years, real time has become a cross-industry discussion; beyond e-commerce and pure-play web businesses, healthcare institutions, banks, telecommunications companies and traditional retailers are joining the conversation, giving real time increased visibility, which is also why we are beginning to hear more about it.

 

Of course there are a wide range of business drivers for real-time data across the enterprise. As you would expect, the business need for a bank is very different to that of a telecommunications or major healthcare provider. Also, it’s important to point out that executives and decision makers sitting on a company’s board articulate their need for access to real-time data using language that talks about the direct benefits to the business. For example, the CEO of a healthcare provider would say, “We need to provide up-to-the-minute electronic access for our doctors, nurses and practitioners  who diagnose our sick patients so that we can administer the best treatment required to improve the health of the patient and get them back to their health as quickly as possible.  On the other hand, an executive for a telco might state, “Our field customer service and support teams need access to customer account information at their fingertips to understand what new products and services to offer to best meet the customer’s needs and increase monthly and quarterly revenue.“ The reality is that underlying these different business statements is the same need to integrate data transactions across enterprise applications so that the business has access to fresh data, at any point in time.

 

Q) You mention there are some false assumptions surrounding real time. What kinds of misperceptions are you seeing in the market?

 

There really is a good deal of confusion in the market which doesn’t help companies who need to determine how to achieve real-time operations. It is a fact of life that most large, global organizations have a lot of legacy applications and systems in addition to some open systems and maybe even some open source environments. The bottom line is that everyone has heterogeneous applications that don’t all communicate with each other.  Integration is probably the single most significant challenge that IT groups face today. Think about a basic task which you try to perform on a PC, such as importing an old version of MS word. But if your application is not backwards compatible, which many are not, then you will experience a great deal of frustration converting the document so you can open it and read it. Multiply this level of frustration, for such a simple task, and you begin to feel the level of pain that a large corporation needs to address.

 

Many organizations today spend a great deal of time and money integrating disparate systems and data, and with that come complexity and cost. At the same time, organizations cannot just shut down and retire valuable applications that may need modernization but they have to understand what is technically possible so they can continue to leverage valuable data for the business.  

 

So, let's focus on the top three issues. We see these myths firmly rooted out there, and need to deconstruct the “barriers” to real time, which are holding some organizations back. They are:

 

1)      Real time is costly;

2)      Real time is complex and difficult to maintain; and

3)      Real time isn’t for everyone.

 

Q) OK let’s run through these “myths” one by one:

 

MYTH #1 is that Real-Time Business Intelligence is costly. But isn't it going to be costly to make the move to real time, when what you’re talking about is significantly speeding up data delivery and analysis?

 

Most new technology comes with a price tag and there is no getting around it. But the widely held “myth” that real time requires a “rip and replace” endeavor is just not true. In fact, businesses may be able to leverage much of what they already have. With the rapid advances in data integration technology, the new capabilities are more affordable and can usually be integrated with existing technologies.

 

A recent industry analyst study looked at data acquisition for analytics and reporting, and found that the software and implementation costs for supporting continuous stream updates (i.e. low-latency data) are highly cost-effective when compared to the more traditional approaches  If your business demands more up to date information and therefore needs low-latency data and then were given the choice between real-time acquisition or updates once or twice a day, and the cost wasn’t prohibitive, wouldn’t you want to get to it faster?

 

Which brings us to the next: MYTH #2 is that Real Time is complex and difficult to maintain. This goes one step beyond the cost and it seems like an important distinction, as more and more companies are coming to recognize real time as a future, if not an immediate, requirement for doing business. Some organizations might feel real time isn't urgent, and put it off for another year or two, especially given the added complexity and maintenance. Why shouldn't they wait?

 

Real time capabilities can really be a business-changing enabler and therefore we assume that with that comes some complexities. While many organizations immediately understand the business value, some stall at implementing either because they feel that once some of their systems operate in real-time, then all the systems will need the same level of service for the business. Our recommended approach is to start out with one area, one project and the business will very quickly find ways to leverage and “consume” this fresh information. In fact, they will then start to demand it.

 

One recent example is a customer created a real-time dashboard for executives to show key daily metrics about the business, for example, revenue today, # of customer service calls and products shipped…and once the consumers of this data started to receive and really use it, they asked for it 7 days a week – not just 5! The IT team usually feels over-burdened and worries about keeping the system highly available once the business comes to rely upon it. However, the same technology that integrates the data can also be leveraged to keep the system highly available.   

 

With recent technology advances, real-time data can be used across the organization without the need for batch outage windows. Because business applications increasingly serve users on a worldwide basis, new transactions are continuously being made and therefore it becomes impractical to impose any outage or interruption in the overall process. For critical and revenue-generating data, batch loading that data nightly or even several times a day is no longer efficient –data transactions, once committed on the source system need to be integrated seconds or minutes later to any target system that “needs to know.” We find that once a business moves to real-time operations, it will rarely or never go back to batch processing.   

 

The last and probably most important point on this note of complexity is that it’s possible to do all this with very low overhead and burden on the source system. Many large organizations have very stringent rules around what touches their most critical applications and so it is critical that there is no intrusiveness on the production system.  Also, real-time continuous data streams eliminate a middle tier, offering a simpler architecture and fewer points of failure – not to mention the cost factor again. Surprisingly, real time is actually less complex than a batch processing method and also easier to implement, customize and maintain.

 

MYTH #3 is that Real Time isn’t for everyone. Is real time something that every industry can take advantage of?  Is it a fit for businesses without an online presence?  Isn’t nightly batch processing good enough in most cases?

 

It’s a dangerous myth, albeit widely held, that real time is only critical for companies doing business online. But let’s face it, most businesses today do have an online presence. Whether commerce-enabled or not – a business will probably have some degree of commerce and transactions happening in the very near future. That said, many internal business processes require real-time information access. I can give you typical examples for, say, a cable satellite provider or a telco where customers call a support hotline and the customer service rep at the other end of the phone needs to know, in most cases, what happened just a few minutes before. Having accurate, up-to-date information not only impresses the customer but means a rep can efficiently service them and move on to the next. Today’s consumer is extremely fickle and the competition is just one phone call or email away. There is no business that could not benefit from the value that real time delivers in data speed, integrity and availability.

 

Real-time data not only speeds up business processes, but can change their value altogether. By providing a real-time view and understanding of events, customers and information, businesses can make adjustments and decisions in an instant. With fresh data available for analysis, any business can operate to its full potential and impact revenue and profitability.

 

I can think of many more use-case examples where real-time information is almost a requirement to get the job done. Let’s look at the travel industry – you no longer call your travel agent, leave a message and get a call back the next day. Now you go onto Travelocity, Orbitz or Expedia and browse for the best deal at that moment. Also, modern consumerism means credit information is often shared over the phone or online, making real-time card authorization critical to fraud prevention in all areas of retail. We are already witnessing real-time operations and data integration becoming a standard in many industries.

 

Q) How are companies using real-time reporting and analytics today? Are there some shining examples already out there to follow?

 

Many companies have successfully taken steps to embrace real time, citing benefits like deeper understanding of customer needs and preferences and providing the ability to act on better information, faster. E-commerce leaders are paving the way, given the competitive requirements and nature of the online marketplace, but innovative and critical business processes driven by real-time data are emerging from banking to financial services to healthcare, where real-time data can literally mean the difference between life and death.

 

Leaders across industries have already recognized the value of sharing information in real time – Dell, Bank of America, Travelocity and Overstock.com, to name a few well-known brands leveraging real-time information for better intelligence and to gain a competitive edge.

 

So to summarize, real time is not as costly or complex as many perceive it to be, and I think we all agree that real time information provides better insight and decision-making across the organization. Businesses are discovering that real-time data can create new levels of intelligence, customer service, and sales success. Data is constantly changing in today’s organization and the business needs to know. When a customer decides to move on to the competition, would it not be ideal if sales and marketing know immediately when that happens or perhaps, even before that event happens.  Saving a loyal, happy, “high profile” customer should be a key focus for the business and not knowing as things happen could be detrimental. With the rising importance of operational applications linked to the data warehouse, the freshness of business data is more critical than ever and business requirements for real-time data will only continue to increase.  

 

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At the upcoming GoldenGate user conference, taking place in Las Vegas from June 4-8, industry leaders will gather to discuss the issues and trends in real time. For more information or to register, visit www.goldengate.com/conference.

Disclosure: I'm the VP Marketing at Blue Lane Technologies, a recent recipient of Best of Interop (security) and InfoWorld's Technology of the Year in security.