Manage Business Data to Eliminate The Information Technology Problem
Information Technology is one of the top 10 problems of 20th century management!
Information Technology incorporates a wide variety of unsolvable problems
Information Technology (IT) employed today has many inherent problems that many expensive solutions have never been able to solve:
- Information technology is managed as technology, rather than as capital preventing integration with the business
- Information technology employs large monolithic information systems that are laid over the business, instead of information processing solutions that are utilized by the business
- Information Technology defines different architectures to define and align the business, systems, hardware and networks, and data and information, rather than integrating each with the business
- Different categories of information capital are mixed in many systems using different entity names and definitions producing information complexity and preventing proper information capital management
- Since the business is not organized, information systems manage information related to structures laid over the business and do not capture, process, or report actual business data or report actual business management information
- Information Technology is difficult to manage because it mixes business, facility, and management capital that require diverse management and operating capabilities
- It is difficult to manage return on IT investments since the investments are lumped together and do not produce direct measured business improvements
- Information Technology has grown into a large expensive empire that involves much unnecessary processing, extensive overheads, and unsolvable problems
These problems can never be solved with 20th century management that tries to improve the enterprise by laying new or improved structures over the business.
Information Technology problems disappear when organizing the business for 21st century business management
The only way to eliminate the Information Technology problems is by organizing the business with to enable 21st century business management. Information technology must be integrated in the business as capital defined as specific solutions utilized to produce specific business results. Business management enables the following measures to eliminate the unsolvable Information Technology problem:
- The actual business is organized as specific capital solutions, including IT solutions, utilized in performance to produce specific business results
- Information system solutions are defined and integrated with the business process as modules to produce a specific result or a chain of results
- Information systems focus on managing actual business data in result value and quality, performance cost and effectiveness, capital worth, and return on capital investments that is not processed today
- Information Technology is defined and organized as capital, with other capital of the same category, for proper capital management by those with the professional capability
- Information capital is defined and managed as business data, human knowledge, facility records, and management intelligence to produce information solutions needed by the business
- Enterprise information is integrated by capital solution utilized, result produced, supplier, customer, time period, business transaction, etc in an enterprise Business Information Base for one set of complete and accurate business information
- Information systems and processing devoted to managing arbitrary structures laid over the business and special systems to address problems in data reconciliation, information integration and extraction, and management reporting are discontinued, if not directly needed by the business
- New information system implementation integrates business and information processing with other capital solutions to produce specific output results needed by the business
- The business is organized for a new generation of 21st century business management systems and business-information process modules, to process the actual business result by result, and provide one set of consistently-defined management information
Managing information technology as capital utilized by the actual business eliminates the unsolvable IT problems in business alignment, information complexity, data reconciliation, unknown costs and value, unknown capital worth and returns, CIO and IT management capabilities, data integration and control, and on and on.
The Information Technology Problem
Enterprise information systems include a wide variety of systems that are laid over the business
Since the business is not organized, different management structures must by laid over the business to manage the enterprise. Information systems are another set of overlaid structures that process and report the system structure, plus data captured by overlaid organization, business process, account, administrative, cost, quality, performance, and other structures. Each enterprise structure defines the enterprise with a different set of data entities, producing the information and business complexity problems. Information systems do not directly manage the business to capture actual business data and report one consistent set of complete and accurate business management information.
Enterprise information systems include material control, production control and manufacturing resource planning systems, supply chain and customer relationship management systems, cost and quality management, operational management information, and other systems that support revenue result management. Capital result management systems include human resource management, financial management, general ledger, accounts payable and receivable, asset management, IT architecture management, inventory, purchasing, strategic planning, executive information, and other administration systems. Investment result management systems include investment analysis and planning, project management, portfolio management, shareholder management, etc. Each system is laid over the business, rather that being utilized as a solution by the business to produce the managed revenue, capital, or investment results.
Overlaid information systems define the enterprise with different entities that must be integrated
Each of the systems defines the enterprise with different data entities creating a large information cross-referencing and integration problem. Systems manage such enterprise entities as department, center, station, responsibility, unit, function, process, object, activity, etc, instead of specific business results. The enterprise is left with a large problem to sort out the information, integrate like information, and relate information to the business. The problem is addressed to some degree by implementing an enterprise application architecture from a single vendor. Most enterprises still must make additional investments in information integration and data reconciliation systems for performance management, management and executive reporting, and strategic enterprise management. Even with all this such actual business data as result value and quality, performance costs and effectiveness, capital worth and utilization, investment utilization and return, etc cannot be captured and processed.
Business process re-engineering often creates a gap between information systems and the business
Business process re-engineering tended to create a gap between business processing and information processing. Instead of integrating the processing, Enterprise Resource Planning (ERP) systems were laid over the business process. The selling point was that best practices incorporated in the ERP system would automatically solve the problem. But this proved difficult to do in practice, since best practices need to integrate all the solutions utilized in the complete business.
Enterprises have difficulty defining business requirements for information systems
Since the business is not managed, it is difficult for the enterprise to identify how to gain specific benefit from information systems. Most enterprise information systems are sold by vendors who promise many benefits. Few enterprises really understand how to gain from the system. Enterprise system implementation is a large undertaking. Invariably, system implementation is restricted to putting the system into operation as a monolithic structure laid over the existing business. Even if the objective of system acquisition was business improvement, the objective usually gets redefined to “implement the system”. The enterprise is left on its own to make changes to gain benefits from the system.
Information system implementation consultants usually employ a methodology to implement systems over the existing business
Most implementation consultants employ a methodology that allows them to implement systems with staff that do not need to understand the enterprise business. The emphasis is on “doing what the customer wants” and satisfying “user requirements”, which is difficult to argue against. The administrative department is defined as the user, rather than revenue result users, who use the system to produce results or face the customer. Usually, the main requirement of the administrative department is “no change”. These users often benefit from existing methods, and cannot visualize advanced ways to utilize systems to benefit other users. To minimize problems and delays in implementation, methodologies convert existing practices and utilities convert existing data. Utilization to achieve benefit is “up to the users” meaning revenue result users. Training covers system operation rather than using the system for business benefit.
Information systems are managed by Information Technology that does not take responsibility for business benefit
Many enterprises view system business performance as a responsibility of Information Technology. But, IT will take responsibility only for the internal operational performance of the system as it is set up. Problems exist because neither IT, nor anyone else, was ever made responsible for the business benefit provided by the system. Enterprises often try to solve the lack-of-business-benefit problem with new more-complicated systems, rather than solving the IT and business problems and improving the utilization of existing systems.
Most information system implementations are cost projects that provide marginal benefit
Most enterprise system implementations are “cost projects”. Implementation itself provides little benefit to the real users and limited return on the investment. Enterprise performance problems are converted to the new system, in effect casting the problems in concrete, making change much more difficult, and escalating the cost of future performance improvement. IT investments are lumped, rather than defining and implementing the specific business, human, facility, and management solutions that must be utilized by the business to provide the return. The business that utilizes IT is not defined to enable measurement of the value added to the business by IT investments.
Information systems, hardware, and strategy are managed as technology rather than capital to be utilized for benefit
These problems are topped off by the problems of managing information as technology rather than as capital. This keeps information processing and business data separate from the business organization and processing. Data, knowledge, records, and intelligence are not managed by the proper human capability, and are not integrated to deliver solutions to be utilized by the business. IT facilities are operated separate from other facility equipment capital such as telephone networks, and the enterprise equipment infrastructure. IT strategies are planned and managed separate from other enterprise strategies creating future alignment problems.
The Information Technology Solution
Result-performance Management (R-pM) provides the knowledge and procedures needed to organize and manage the actual business as “investments in capital as solutions of worth utilized for cost and effectiveness of performance to produce value and quality in results”. Business management addresses the many problems in information system investments and the utilization of information technology to produce benefit.
Manage information technology as business, facility, and management capital
Investment in enterprise systems and technology must be to enable significant result and performance improvement and not be an end in itself. Information system utilization is a result management responsibility to utilize the system to achieve business result value-added. Information system performance is the responsibility of specific capital management to provide the IT infrastructure and deliver accurate data, knowledge, records, and intelligence solutions to support achieving results at an acceptable cost. The analysis, processing, and data parts of IT are business capital and is managed with other business capital. The enterprise service architecture, hardware, software, and networks are facilities that must be managed with other facility capital. IT strategies are integrated with other capital development and management strategies to produce strategic results as management strategy capital. Other information capital must be managed as human knowledge, facility records, and management intelligence.
Implement and utilize information technology to produce value-quality business results
The solution to information system investment is through a managed business to understand and plan significant result and performance improvements using the system as the enabling technology. Result value-added provides the justification and payback for enterprise systems. The results the enterprise must achieve utilizing the system are described and the future result value is planned. Performance problems are analyzed to make beneficial business changes that maximize the value-quality of results produced, improve the functionality of the system, and create an integrated Business Information Base. Application systems are not addressed as isolated capital investments, but as components of business process solutions. The application is first integrated into each business process utilized to produce business output results. The improved business process is then integrated with other needed solutions and implemented to produce higher value-quality results, result by result. Business management consultants use the 21st Century Management Consulting Model and 21st century management conventions, definitions, and standards to help the enterprise integrate and implement the full set of solutions needed to produce high value-quality results across the scope of a system.
Utilize information technology to provide the return on investment
The business is organized and managed to remove overlaid structures and apply information technology for the benefit of the business. Business management provides many features to ensure successful system investments.
- Information is organized and managed as capital, not as technology
- Information system capital is split between business capital for the application logic and processing and data utilization, and facility equipment for the service architecture
- Existing systems and business processes are redefined as solutions to produce specific output results needed by the business
- Systems are never implemented directly, but are implemented as part of an improved business process
- System investments are analyzed and planned as a part of improved business process solutions to produce itemized result value-added benefits
- System utilization to produce result value-added is required by result manager goals and capital performance manager follow up to meet expectations
- Information capital solutions are developed as business data, human knowledge, facility records, and management intelligence solutions and not as technical solutions
- Information systems are implemented to manage results and capital solutions as integrating entities to define the business and utilize information systems to directly manage the business
- All information brought in, produced in, or leaving the business including emails and Internet downloads reference a business data entity for control against the business
- Information is integrated by reference to a business data entity into an Business Information Base to deliver data, knowledge, records, and intelligence as solutions to produce specific results
Business management takes the mystery out of information system investments and provides a disciplined path to gain a documented and planned return.
Result-performance Management (R-pM) provides the knowledge for actual business management
Result-performance Management (R-pM) is the only source of knowledge and expertise on how to manage the actual business. Forward-looking enterprises are now using R-pM guidance to organize and manage their business to gain breakthrough advantages over competitors burdened by unsolvable 20th century management problems. Business management is explained and documented in the Business Management Toolkit. The Toolkit provides procedures for actual business management and maintains emerging 21st century management conventions, definitions, and standards. The Business Management Toolkit guide “How to Build Result Value-quality Chains” describes value chains in detail. Management consultants who base 21st century business management services on R-pM knowledge are licensed to help enterprises learn, organize, and manage the actual business. Business management knowledge and the Business Management Toolkit are available and supported today at result-performance-management.com.
The Solution to the Economic Crisis is explained in free downloads
Three free white papers explain the dead-end 20th century management problems, such as the failure to plan, account for, and manage the actual business, that caused the economic crisis, the way to eliminate the problems, and a government program to address the crisis by stimulating the economy, solving the problems, building a structure for financial and economic management, and organizing local businesses to flourish in the eventual recovery.
- How to Eliminate Problems that caused the Economic Crisis explains the major unsolvable 20th century management problems and the solution to eliminate the problems
- Business management; the only Solution to the Economic Crisis explains how to plan and manage the business to capture business data and provide management the information needed for actual business, corporation, industry, and economic management
- A Government Business Management Program to Answer the Economic Crisis outlines a government program to encourage business management, stimulate the economy, restore confidence, organize businesses to flourish in the recovery, and manage economic cycles to prevent future crisis
These three white paper downloads are available to R-pM Community Members at result-performance-management.com. There is no cost or obligation to join the R-pM Community. Join by entering your email address and personal password. Your email address is protected and used only for download problems, product updates, and occasional R-pM Member news and white papers.
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