Business adaptation
November 24, 2009 by Paul M.. Filed under Adaptation research.
In our collective experience at NICTA, one of the challenges we see in industry is the ability of a (usually large) business to respond to ‘unusual’ changes in its environment in real-time. By ‘unusual’ I don’t mean that the changes are necessarily uncommon or rare. What I’m referring to are those threats or opportunities to which an organisation is not ‘engineered’ to deal with quickly. They may be occurrences that take place on a seasonal, perhaps even weekly or daily basis. But because the company is not built to respond to them, they go left unanswered until the threat or opportunity has passed.
In many cases, the inability to respond to a single such event is not significant enough to damage the company. But over a period of time, a lack of responsiveness will eventually erode the competitiveness of the organisation and it will be forced to change –either for the better, or by shifting focus to a different market, or by disappearing altogether.
When Mark Hurd was the CEO of NCR Teradata (he now heads up HP), I once heard him speak about how their technology helped Walmart respond to an overwhelming surge in demand for American flags on September 11, 2001. Every flag on every supermarket shelf in the US was sold that day, but it is what happened on September 12 that is interesting in demonstrating business agility. Apparently the responsiveness of Walmart’s data warehouse software and their business processes allowed them to spot the need and restock faster than any other retailer. They quickly ordered all remaining stocks from suppliers and had them on Walmart shelves the next morning. The only places you could buy an American flag on Sept 12 2001 were Walmart stores and they sold out again – this time twice as many as they sold on Sept 11.
This is a somewhat simplified example but, while one could argue that Sept 11 was definitely a rare event, I would imagine that for big retailers unexpected surges and drops in demand for different products happen very frequently (if not as dramatically). They might even respond to these changes as best they can by riding through them and adjusting their supplier orders on a rather routine cycle. But I bet they don’t have a perfectly-matched response. Similarly, most other business types, whether they are moving physical products or providing a service, won’t have a real-time sense-and-respond information infrastructure that would drastically reduce this form of friction.
We know that there are vendors and technologies out there now that address parts of this problem, but certainly many of the questions are still unanswered. NICTA’s Business Adaptation researchers are working now on some of these challenges, focussing on how to bake automated, real-time responsiveness into existing business processes and systems. To progress this research, we’re on the look-out for relevant industry challenges that we can apply our prototypes to in the lab, before preparing them for productisation. Please let us know if you can help!
Tags: adaptation, NICTA
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