The Logic of a Business Solution Structure
Business Solutions are specific capital items that are utilized to produce specific business results.
Business solutions are the specific items of capital that are supported and are utilized to produce specific results. Business solutions are broken down to provide the specific management support capabilities needed, and to integrate with other solutions utilized to produce a specific result. The set of solutions is organized in the business solution structure. This means that the business solutions must be structured into two dimensions.
- The capital management and support dimension so that solutions can be supported by the proper human capability solutions
- The result management and utilization dimension to group like solutions that must be integrated to work together to produce a result
In the capital management support dimension, solutions should be categorized by the kind of human capability capital needed to develop, support, and provide cost-effective business solutions. In the result management and utilization dimension solutions should be classified by the way capital is organized to actually produce results.
Today, some capital is administered by functions, but most is undefined and unmanaged
In today’s enterprise, most capital is administered in different categories. Human capital is separated as human resource administration. Tangible facilities like financial and fixed assets and accounting records fall under finance and accounting or an administration department. Consumable cash and other supplies come under finance and purchasing, Some tangible facilities for information system architectures are normally separated out under Information technology. The business capital that directly produces a result may be under an organization and methods or business process management unit. Business capital for information processing, systems development, and data administration is usually under Information Technology. Management capital is under corporate planning, internal audit, legal, and other management support units. Some management information capital may be placed under management accounting.
This capital may be defined loosely as employees, assets, system, etc. for purposes of administration. Much capital is not specifically identified or managed. Much is labeled as intangible assets. Very little capital is defined as business solutions to know performance costs and manage utilization and improvement.
Business solutions must be organized to be supported and improved by those with the needed capability
A continual problem is the administration of capital by those who do not have the inherent capability to administer the capital. Examples can be seen in real management accounting and business and information capital administered as information technology. The principle is applied to some degree with human resources, financial facilities, and facility supplies.
It is important to manage capital by the specific capabilities needed to support it. It requires some analysis to determine the human capabilities required. One way to do it is to start from basic human capabilities. You know from your own work and experience that different people are good at different things and have different ways of getting things done. Basic capabilities used to do something tend categorized human capital as:
- Expert: The expert uses his background and training to do it. Experts are used when the problem is very specific and requires someone who has seen the precise problem before to apply a known solution. Experts are good for very technical or industry/function specific needs. Experts are used when there is a need for someone who has experience and needs to repeat the experience. Experts are required to support facility capital
- Researcher: The researcher finds out what other people know and how others do it. Researchers are used when data or information is used to understand and solve a problem. Researchers are good for customer or market problems. Researchers find out what is going on and provide intelligence. Researchers are needed to support management capital
- Analyst: The analyst figures it out for himself. Analysts are used where the problem is imprecise or where an original solution must be devised. Analysts are good for processing or approach problems. Analysts are used to solve problems and design new solutions. Analysts are needed to support business capital
- Coach: The coach gets other people to do it. The coach is used when people must be handled and developed. The coach is good at understanding human needs and solutions from the human perspective to help humans work. Use coaches when you need to help people apply a solution. Coaches are needed to support human capital
If assigned a problem to solve, the expert will apply a solution he has had experience with, the researcher will find a reference or person to explain the solution, the analyst will work it out himself, and the coach will help someone else solve it.
Business solutions are logically organized in four categories for capital management and support
Capital must be managed as capital by those who have the specific capability to develop, improve, and support the capital to provide qualified business solutions needed to produce specific results. Capital is logically organized in the Business Solution Structure in four categories:
- Business capital: Business capital is that capital which is specific to produce a particular result and generally cannot be used for other results. Business capital includes the organization to produce a result, the process followed, and the data about the business transaction that affects or updates the result
- Human capital: Human capital is the people involved in producing a result. Human capital includes personnel that must be maintained ready to produce results, the human capability required to produce a high-quality result, and the knowledge needed to use solutions and produce results
- Facility capital: Facility capital is the common tangible assets for the infrastructure to produce and document results. Facility capital includes reusable financial and equipment facilities, consumable cash and supplies, and accounting and other records
- Management capital: Management capital is the capital that plans and controls results. Management capital includes strategy and plans for results, the tactics to produce good results, and the intelligence to know the right results and results against plans
The business solution structure by capital category provides the organization for capital management.
Much capital, organized for obsolete historic reasons, must be logically organized today.
Some capital has been historically managed separately for reasons that may have been valid at one time but are not logically valid today. Financial management separated financial assets from other assets to protect the cash and funds. Today much financial control is automated, while other high-worth facility capital remains neglected. Financial strategies must be integrated into one enterprise strategic business structure. Financial facilities must be managed logically with other facilities. Financial investments must be managed as reusable assets with other facility equipment. Consumable working capital and cash must be managed as facility supply. Accounting records must be included with other facility records for professional records management.
Information technology was separated from the business users in the early days of data processing to provide the new emerging knowledge and central processing required. This has evolved to IT and CIOs, while much of the processing and support has gone back to the business users. IT and CIO’s have problems managing the various categories of facility, business, and management capital placed under IT. The IT systems and network operation and infrastructure are facilities like the telephone networks that must be integrated into the digital utility, as facility equipment. IT application systems processing and support and data management are business capital that should not be administered as technology. IT strategies and plans and assessments are not technology, but must be management capital for integrated management strategy and tactics.
Business solutions must be structured by the way they are utilized to produce results
The business solution structure also must structure solutions by the way they are utilized in practice to product results. An analysis of the way people produce results shows that they tend to organize capital into three logical classes:
- Readiness capital: The organization, people, work place and equipment. and plans to be ready to produce the first result or a set of results
- Production capital: The manual and computer process, human skills and capabilities, supplies, and directives needed to produce a specific result
- Information capital: The data concerning the result or business transaction, the knowledge for instructions, records to document the result, and intelligence to know the right result or rationale for the result
Business solution users by nature organize and integrate their solutions by these capital classes.
Business solutions must be structured by three classes within each category
The business solution structure organizes solutions by the way they are utilized to product results. Capital should be integrated with business capital to produce results. The business solution structure has three logical classes:
- Readiness capital: Business organization, human personnel, facility equipment, and management strategy
- Production capital: Business process, human capability, facility supply, and management tactics
- Information capital: Business data, human knowledge, facility records, and management intelligence
The business solution structure by capital class provides the specific solutions that result management can integrate with business capital and utilize to produce results.
The business solution structure includes twelve solution types
The business solution structure includes four capital categories broken down by three capital classes to give twelve solution types:
- Business capital: Business organization, business process, business data
- Human capital: Human personnel, human capability, human knowledge
- Facility capital: Facility equipment, facility supply, facility records
- Management capital: Management strategy, management tactics, management intelligence
The business solution structure by capital category organizes solutions for capital management to provide qualified solutions to produce specific results.
The business solution structure organizes solutions by category for capital management and by class for result management
The business solution structure is defined logically as the structure of the set of enterprise business solutions by capital category for capital management and support and by capital class for result management and utilization to produce results
