The Rise of The Intelligent Enterprise

Kemal A. Delic - Umeshwar Dayal

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Evolution towards Intelligent Enterprise 

One may wonder why contemporary enterprises are not already exhibiting these features and what's preventing them from doing so? It is very likely that the uncoordinated development of the above mentioned domains by several fiercely competing vendors each lacking a holistic view  or suitable integration framework (as is IE architecture, for example) are possible causes for US corporations having spent approximately 700 billion dollars (est. between 1995 and 2000) on enterprise software which are not used very effectively today [Financial Times, Dec. 5, 2001]. Two thirds of that amount was spent on "custom-built" programs known as the "bridges".  

Therefore it seems very likely that those who will be able to solve the challenging problems of interoperability, cost-effectiveness and reflectivity (reduced latency) may claim that they have entered into an IE-morphing phase.

Figure 2 : Evolution of the Intelligent Enterprise - Next 15 Years (Click here for full-size version)

In Figure 2 we sketch some possible evolution to the model-corporations illustrating four characteristic phases of the last two technology waves. These corporations have been able to dominate markets by deploying large-scale automation methods (car assembly lines e.g.), integration (huge number of avionics suppliers for several hundred million pieces e.g.) and optimization (clever synchronization of order, supply and assembly chains combined with financial engineering e.g.).

We envision that "adaptation" will be the key characteristic of the fourth phase in which "intelligence density" (widespread use of enterprise KM systems) will enable both: autonomy/self-awareness and dynamic cooperation with partners and suppliers. Connectivity will be nearly total and speed of circulation of information will be much higher.  Problem-solving capacities will enable self-healing and self-management in the hierarchically interconnected systems.

Intelligent enterprise should be able to create and maintain dynamic models of itself and its environment. The first model will be used to monitor internal operations and to maintain the key parameters in optimal range. The second model (external world-model) will reflect the state and change dynamics in the environment, passing variables and plans to the internal model for necessary adjustments. More accurate these models are, more efficient IE will be.

Here again, we may pose the question about the range of changes in analogy to nature-born systems: do we make small changes adjusting parameters to optimize certain parameters and behaviors or we better do the big, structural changes ? It seems that for the reasons of longevity, both ranges should be necessary in order to adapt (fully). So, small changes will adapt behaviors to non-disruptive, stable situations, while big, structural changes are needed when we experience one-of-the kind (tectonic), technology wave change.

Sources of the analogy for the modeling of evolution of Intelligent Enterprise and improved understanding of the possible future scenarios can be sought in the theory and practice of complex, large-scale systems [4], biological systems [5], real-time systems [6] large autonomous computational systems [7][8], large social systems, business phenomenons [9], large financial markets and systems etc.… 

Fifth Technology Wave : Darwinian Model

Making an analogy with natural systems, we may predict that the changes in business climate and environment will force advances toward the Intelligent Enterprise. Moreover, changes and repositioning in the value chains will force re-grouping and repositioning of the entire industry sectors. Picturing future intelligent enterprises playing in different industry sectors, one may wonder what would be the time-frame in which we may see their rise in (a radically changed) global markets. This estimation might be based on the experiences from the previous technological waves as shown in Table 1 [based on The Economist : A Crunch of gears, September 22, 2001]

Table 1 : Five Technology Waves - Last 200 Years
Source : The Economist : September 22, 2001

If we follow the evolution of the key technology waves in the last 200 years we may observe that all of them have had a very large and wide spread impact on which the cost-performance aspect of the entire industry sector was radically changed. It appears also that the typical gold-rush pattern is followed by the over-investments, shake-up and battles in which market leaders kill smaller competitors but then failed to achieve  sufficient margins. This was typically followed by a steep and quick decline at the moment with investors have redirecting their attention to the new set of technologies. Key technologies survive for several generations, but the endeavor no longer exciting nor speculative. Important other players in the markets are financial enterprises, regulatory bodies, governments and stock exchanges. They influence strongly pace and direction of developments and money flows. At the  time of writing, it is not clear which combination of today's known technologies (or some new, disruptive) will make this Fifth Technological Wave, as all key components are known but the winning combination; that makes the Intelligent Enterprise possible is not yet known.

As we may observe a general contraction of the duration of each successive technology wave, we may postulate that the  next 15-20 years might be the time horizon during which the new species of intelligent enterprises (corporation on steroids) will rise, evolve and finally (most-likely) dominate.

This vision of the Intelligent Enterprise represents the magical and compelling challenge of creating large-scale artifacts resembling very closely to nature-born living organisms-very much like the Darwinian picture of the world in which species have been created, evolved and morphed into better forms and superior organization. Some of these species have disappeared and can only be seen today in museums. There is no reason that something similar may not happen to some contemporary enterprises. It seems that the lessons from the Mother Nature should be studied carefully by scientists, technologists business people and dream-driven futurists.

Acknowledgement :

We thank Leo Laverdure for his wise comments, improving the clarity of our arguments.

This article originally appeared in Ubiquity, published online by the Association for Computing Machinery at http://www.acm.org/ubiquity/

References :

[1] Jeff Sutherland and Willem-Jan van den Heuvel ” Enterprise Application Integration and Complex Adaptive Systems ", CACM, Vol.45 No.10, October 2002, pp. 59-64

[2] Developing and Integrating Enterprise Components and Services, Special Issue, Vol.45 No.10, October 2002, pp. 30-87

[3] Aniruddha Gokhale, Douglas C. Schmidt, Balachandran Natarajan, and Nanbor Wang , "Applying Model-Integrated Computing to Component Middleware and Enterprise Applications", Vol.45 No.10, October 2002, pp. 65-70

[4] Graupner, Sven; Kotov, Vadim; Trinks, Holger; Andrzejak, Artur, "Control Architecture for Service Grids in a Federation of Utility Data Centers", http://www.hpl.hp.com/techreports/2002/HPL-2002-235.html

[5] Peter Bentley, Digital Biology, Simon & Schuster, New York, 2001.

[6] Real-Time System Symposium(s), http://www.rtss.org/

[7] Hogg, Tad; Huberman, Bernardo A., "Dynamics of Large Autonomous Computational Systems ", http://www.hpl.hp.com/techreports/2002/HPL-2002-77.html

[8] Kotov, Vadim, "System Factory: Integrating Tools for System Integration", http://www.hpl.hp.com/techreports/2002/HPL-1999/HPL-1999-118.html

[9] Jamshid Gharajedaghi, System Thinking : Managing Chaos and Complexity, Butterworth-Heinemann, Boston, 1999.