Re-define Business Processes as Manageable Result Value-quality Chains
The enterprise today has many unsolvable management problems
Today’s 20th century enterprises have always had management problems, because they never managed the business “the activity of providing goods and services”. Instead, they laid organization, system, accounting, reporting, and other structures over the business. The business changes, while the overlaid structures remain rigid, creating problems with interfacing, communications, and generally managing the enterprise. The organization structure created silos, which interrupted the flow of goods and services across the enterprise. The solution to the problem was to re-engineer business processes to facilitate the flow of goods and services across the organization units involved.
Business process re-engineering solved some problems, but created others
Business Process Re-engineering (BPR) put in business processes leading to one output at the end of the process. BPR generally sped up the production of the final output, but introduced another set of problems. Results, capital utilized, and performance are not defined and are mixed together within the process. Quality management focused on performance quality. The process crosses organization units, which are expected to manage performance and performance quality to produce a final output result to go to the customer. This made it difficult to manage value and quality of the results produced within the process leading to the final output. The main problem was that BPR did not address the fundamental problem that the enterprise did not manage the business. Instead BPR introduced another overlay on the business and increased business complexity. Enterprises needed further change management services to address the symptoms of the problems created by business process re-engineering.
The business process is monolithic in that it mixed various categories of capital together
The reengineered business process produces a monolithic process that is governed by the process flow across organization units. The idea is to break down the walls between the organizations involved in producing the process output. But, BPR propagates the problem of mixing results. capital, and performance together under the label performance.
With the business process, it is hard to determine value, since value is now hidden in the results somewhere in the process. The other problem is that the process mixes business capital, the capital that produces a result in the process, together with other capital like people, equipment, management policies, etc. Often, those implementing BPR do not understand IT, so enterprise information systems are excluded from BPR, creating another set of problems.
The business process makes capital management difficult and manages results and performance backwards
One particular problem is the capital management in the process. The capital is under administrators, who do not see their role as managing capital. The process team sees their role as producing the process output. The capital in the process is mixed together and not managed as specific solutions, and IT, which is a fundamental part of the process, is kept outside. The organization units are expected to manage performance and performance quality and the process team is managing a result. This puts responsibilities backwards; we should be managing the results in the organization units to produce each result leading to a final result and we should be managing performance across the process in the capital solutions utilized to produce results.
The problems with business process management show the need for 21st century business management
We can only address the problems with BPR and other structures laid over the business by directly organizing and managing the business. The business is organized in one business structure that replaces structures now laid over the business. The business structure organizes results into result value-quality chains.
21st century business management provides one integrated management method, based on organizing and managing the activity of providing goods and services. Business activity is managed through the utilization of capital in business performance. Goods and services are managed through economic output results produced by the utilization of capital in performance. Results are defined across the business and business processes are redefined as result value-quality chains. The business process is one type of capital solution used to produce each result in the chain.
We should be building and managing result value chains rather than business processes
Instead of thinking of processes, we should be thinking of result chains, which define the results produced across the process. Only essential high-value results, for which a customer is willing to pay, should be in the chain. The flow should be determined by the relationship between the results. The process is the performance across the chain for utilization of separately managed business, human, facility, and management capital solutions to produce each result in the chain.
Input results to the chain, results in the chain, and the final output result, have customers who are willing to pay to determine the value of each result. The total result value cannot exceed the value of the final output result. Performance consumes capital and incurs costs. The cost of performance in capital solutions utilized totals up to the cost of the result. Therefore, each result has a value added, which contributes to the value-added of the final set-result produced by the chain. The final set result goes to the customer as an input result to his value-quality chain.
Result quality replaces performance quality, but depends on performance effectiveness and the qualifications of solutions utilized. A low-quality result is identified quickly in the chain. If the problem was in the input result, this can be quickly determined. If the problem is the performance producing the result, the problem can be addressed and solved.
Manage value, quality, cost, effectiveness, goals, and expectations in result value-quality chains
So instead of confusing our value, quality, costs, responsibilities, etc. in a business process, we need to clarify the attributes of results, capital solutions, and performance in a result value chain.
Instead of managing business processes, we must organize the business and manage the three entities that define the business; results, capital solutions, and performance in the utilization of solutions to produce results. The method to replace business processes is with result value-quality chains for 21st century business management is Result-performance Management (R-pM).
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. 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. R-pM and business management are supported 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.
