Innovatech

How much would you pay for today’s issue of the Wall Street Journal?
50 cents? Maybe a few dollars if you really needed it?

How much would you pay for yesterday’s issue?
Nothing, right? Old news is no news at all.

Now how much would you pay for tomorrow’s issue?
As they say in the commercials… ”priceless.”

That’s the promise of predictive business—an exciting new way of doing business that lets companies anticipate customers’ needs, create opportunities and avoid potential problems. It may sound far-fetched, but it’s closer than you might think, and TIBCO is making it a reality.

Predictive business is the next step in the evolution of business, and its foundation is one of the most exciting and talked about trends in business today—real-time business. TIBCO pioneered real-time business in the mid 1980s when it digitized the financial markets, and has delivered the value of real-time business to over 2,500 customers in a wide range of industries

Today TIBCO is focused on developing and delivering the software that will help companies incorporate predictive business into their operations. This paper introduces the concept of predictive business and explains how TIBCO’s current offering focused on real-time business helps companies put in place the foundation for predictive business.

Where We Are Today: Real-Time Business

When you need to know how this quarter’s sales are tracking against forecast, you want timely and accurate information—and you want it now. When a warehouse accident wipes out a quarter of your inventory in the northwest region, you need to be able to respond now. When customers want the status of a service request, they want it now.

The world runs in real-time, and in order to be successful companies have to keep up. Even for companies that measure activities in days, weeks or months, the ability to obtain and adapt to accurate and up-to-date information from throughout their operations is necessary to achieve maximum efficiency, adaptability, and success. Especially when events occur that don’t meet typical expectations or constraints, organizations need to be able to sense and respond so they can best serve their customers and make money.

This ability is called real-time business, and it gives companies what TIBCO calls The Power of Now®. By providing innovative software for over 20 years, TIBCO has helped over 2,500 companies in a variety of industries incorporate real-time business into their operations. The Power of Now refers to a company’s ability to always know what’s happening within its organization and in its market, to quickly recognize opportunities and identify the course of action that will make the most of them and to immediately adapt their operations in order to seize the opportunity.

Real-time business is the act of doing business in such a way that:

Information is available wherever and whenever it’s needed so that all applications and people are basing their activities and decisions on current and accurate information.
As many business activities as possible are automated, and people are given the information and tools they need to perform value-added tasks such as making decisions, responding to changes in supply and demand, and resolving operational inefficiencies.
The execution of business activities and allocation of resources can be changed immediately so companies can respond to problems and opportunities as they arise.

The Next Step: Predictive Business

The ability to incorporate current and complete information into business decisions and activities is critical to success in today’s fast moving marketplace, but it is just the beginning. For over 20 years, TIBCO has been inventing and delivering software that helps companies sense and respond to problems and opportunities as quickly as possible.

Today TIBCO is developing innovative software that enables enterprises to anticipate those problems and pportunities and act before they occur.

What Is Driving the Need for Predictive Business

The goal of real-time business is to enable companies to recognize situations as soon as possible and respond to solve the problem or take advantage of the opportunity. Many business operations follow patterns that if identified would allow companies to proactively address problems or opportunities literally as they arise. As more and more companies achieve the operational advantages of real-time business, leading companies will need to take the next step to differentiate themselves and sustain their competitive advantage.

Real-time business is about doing things faster. Predictive business is about doing things you could not do before. For example:

With real-time business, the goal is to respond to problems faster than competitors.
With predictive business, the goal is to avoid problems altogether.
Where real-time business lets companies spring into action to resolve a customer need, predictive business helps them anticipate the need and address it as soon as the customer voices that need, or perhaps before the customer even has a chance to do so.
Where real-time business helps companies move quickly to capture an opportunity before competitors, predictive business helps them create entirely new opportunities in terms of ways to serve existing customers or open new markets.

Examples of the Value of Predictive Business

Predictive business builds on real-time business’ core value of identify a situation, make a quick decision and take action. The difference is that the identification of the problem or opportunity can occur before the event that results in that problem or opportunity even occurs. This is a path that will start simply and get increasingly more sophisticated, but the implications on future business are staggering. Here are a few simple examples of ways in which predictive business could help companies improve their ability to service customers and drive profits.

Orders from a major customer are trending down during peak season. Are we in danger of losing them? Predictive business can help a company identify patterns such as a major customer’s orders trending down during a typically busy period. This might trigger a process to investigate possible reasons, or to automatically take action to stimulate some customer buying behavior.
Based on trends, this customer will need more bandwidth in one week. What will be the optimal point for us to upsell them? In this example predictive business helps the company anticipate customer demand before the customer even calls with the request. Based on similar customer usage, trending information, and real-time data, the system can recommend and even provide a telemarketing script with customer specifics inserted to upsell the customer proactively.
We’re trending towards SLA thresholds. How can we reallocate resources to ensure continued compliance? This is a common service agreement scenario where risk management must be applied to compare fixed costs of support with costs of SLA penalties to determine how an SLA violation may affect the business and what might be the best course of action to take. These are relatively simple examples of ways in which the tracking and correlation of events or patterns of events could initiate proactive actions to seize opportunities or avoid problems.

Requirements for Predictive Business

Predictive business builds on real-time business. The following requirements must be met on top of the requirements for real-time business in order to achieve predictive business.

Ability of IT personnel to establish business process definitions and supporting IT infrastructure in such a way that process definitions can be automatically assembled and adapted on the fly as the business scenarios play out, new factors are revealed, and business activities are conducted and completed.
Ability of IT infrastructure to automatically track and correlate very large numbers of events so it can automatically recognize patterns and identify potential problems and opportunities. Appropriate IT and business people must be proactively and instantly notified about situations that require their attention so they can initiate the course of action that has the highest probability of delivering maximum value to the company.

Making Predictive Business a Reality

TIBCO is focused on leveraging and extending the capabilities of its software to help companies move toward predictive business. As the basis of the real-time movement of data across the enterprise, TIBCO’s software is uniquely capable of correlating information about a company’s operations and performance with information about expected behavior and business rules so the organization can anticipate and respond to threats and opportunities before they occur.

TIBCO is making predictive business a reality in three key ways:

We continue to invest in expanding and enhancing the capabilities of our currently available software to reduce cost, increase reliability, encourage best practices and generally make it faster and easier to do all forms of integration across all types of resources.
We are substantially advancing our customers’ ability to plan for and implement real-time business through improved visibility vehicles and adaptable business process methodologies.
We are delivering new software products aimed at ever more sophisticated real-time business capabilities, paving the way for predictive business.