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`Forget return on investments, it's return on minutes'

Vivek Ranadive, who is widely credited with digitising Wall Street, bets on 'predictive business'

Vivek Ranadive, CEO of TIBCO

HOW FAST, is fast enough in the business world? At the turn of the 20th century, Vivek Ranadive, recognised as a visionary of business integration, evangelised real time technology — what he called the "Power of Now.'' His company — TIBCO — named for its first product, The Information Bus — startled tradition-bound brick-and-mortar financial institutions in Wall Street with a strident new mantra: "Speed is God, Time is the Devil... Forget Return on Investment (ROI), it's all about Return on Minutes.''

Mr. Ranadive, an MBA from Harvard Business School and a Masters from Massachusetts Institute of Technology, found his first convert in investment banker Goldman Sachs. The tool he sold them to make all their operations a closely integrated mesh of real time operations, was so successful that it was eventually bought out by Reuters.

TIBCO moved on to create customised real time solutions for iconic financial telecom and logistics players all over the U.S. It created the solution that enabled FedEx to sharply outpace the competition by a simple but compelling service: It allowed individual customers to track their consignments on the Internet all the way from collection to delivery — across continents. Today this is standard practice with logistics companies.

But Mr. Ranadive soon realised that it was not enough to do things faster, in order to stay on top. You had to do things that you could not do before.

He called it Predictive Business. His new book, The Power to Predict is just out in India (Tata McGraw Hill), while the international edition has already made it to the U.S. best seller lists. (www.powertopredict.com) In New Delhi last week to address TiEcon, the annual convention of The Indus Entrepreneurs, an international network of Indian business, Mr. Ranadive took time off to share with The Hindu his vision of what it will take — technology wise — for corporates to remain competitive in arenas like telecom and financial services.

"The philosophy of the supply chain was: `Build it and the customers will come.' The demand chain mastered so well by companies like Dell, meant `Build what is required, when it is required.' But both of these are inadequate today. What is needed is what I like to call `Eager networks': `Build what I know they will want!,'' he explained. Such agility demands that companies look back, to go forward — use the valuable data in their archives to understand the customers' needs even better.

Predictive business means, catching the pattern before it becomes a problem. In a truly predictive situation, an energy utility of a city will study the medium range weather forecasts to learn if sudden surges in demand can be expected. If so, it will alert the producers — of electricity or petrol — to increase their output so that demand can match the spike in supply when it occurs.

At a lighter level, such techniques allowed a U.S. supermarket giant to stock up with a lot of beer (in addition to other more practical items) whenever a hurricane warning was issued in an area. Some of the most compelling tools in real time and predictive management have been crafted by TIBCO's 500 strong Pune-based development centre of which perhaps the most complete realisation is a Master Data Management solution used worldwide.

In his keynote address at TiEcon, Mr Ranadive pulled no punches when he dismissed most of the database-based business processes of today as "architectures of extortion.''

"They are silos of information. What is the use of knowing you have lost a customer? You want to know you are about to lose him — so that you can win him back in time.'' That was as good a definition as they come, of what predictive business was all about.

ANAND PARTHASARATHY

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