The 20^th century enterprise has always had management problems, because we never managed the business “the activity of providing goods and services”. Instead, we overlaid 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 business. 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 and performance within the process are mixed together. 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 problems with business process management show the superiority of Result-performance Management

Result-performance Management (R-pM) addresses the problems with BPR and other structures overlaid on the business by directly organizing and managing the business. Result-performance Management provides one integrated management method, based on organizing and managing the activity of providing goods and services. R-pM manages the activity through performance and goods and services through results. R-pM replaces business processes with result value-quality chains and uses business process as one type of performance solution, as summarized in the R-pM community download “How to Build Result Value-quality chains”.

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 propagated the problem of mixing results 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 produced a result in the process, together with other capital like people, equipment, management policies, etc. Often, those implementing BPR did not understand IT, so enterprise information systems were 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 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 a final result and we should be managing performance across the process.

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 results for separately managed business, human, facility, and management capital.

Result quality replaces performance quality, but depends on performance effectiveness. 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 solutions utilized totals up to the cost of the result. Therefore, each result has a value added. 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.

Use R-pM to know value, quality, cost, effectiveness, and responsibilities for 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 and performance in a result value chain.

Instead of managing business processes, we must organize the business and manage the two entities that define the business, results and performance solutions. The method to replace business processes is with result value-quality chains for 21^st Century Management is Result-performance Management (R-pM).

Review the articles under Learn the Basics of R-pm or click on the R-pM banner to download information to learn more about R-pM.

21^st Century Management eliminates 20^th century problems

Result-performance Management (R-pM) eliminates the business process problem and other costly 20^th century problems. Slash costs, simplify business management, and boost competitive advantage through R-pM, the conventional method for 21^st Century Management.

Download your 21^st Century Management Manual today

Your 21^st Century Management Manual, The R-pM Toolkit, is available today and is under continual development to expand and refine 21^st Century Management. Get your R-pM Toolkit, and future updates, at result-performance-management.com.

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This entry was posted on Monday, February 12th, 2007 at 15:41 and is filed under:
Forums: Business Change Methods
Topics: Business Process Management, Value-chain Management, Business Transformation, Best Practice Management, How to Implement Change, Measuremant and Standards
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