Logic of the Business Structure
The business structure is the fundamental structure used to manage the business in 21st century management. The business structure defines the business organization and is used for all aspects of business management.
The business structure is created by combining the business performance solution structure and the business result structure into one holistic structure that defines the complete business. The business is organized in the business structure when one specific solution in the business performance structure is deployed to produce a result in the business result structure. The business structure changes with each change to a performance solution in the solution structure or change to a result in the result structure.
The business structure is used to record business transactions for the utilization of a solution to produce a result or for progress on a specific result. The business structure is used to optimize the business by managing the performance utilized against the result produced. A strategic business structure defines the strategic and support results planned at the strategic horizon and the existing and new solution development needed to produce the results. A sub-business structure may be used to produce a project or campaign result in the enterprise business structure. Extracts may be made from the enterprise business structure to manage specific result sets for a result organization, product group, region, responsible manager or other attribute of specific results.
The business structure combines the result structure and the solution structure
The last two articles in the Logic of Business Management series discussed the Business Result Structure and the Business Solution Structure. Review these articles if you are not familiar with these structures. The business structure is created by combining the result structure with the solution structure. The business structure can be viewed as a spreadsheet. The result structure is normally depicted across the columns and the business solution structure is depicted down the rows. Combining the structures shows all the results that the enterprise must produce across the columns and all of the business solutions available to produce results down the rows. This defines the entities that make up the business and sets the business to be organized.
The business is organized by deploying solutions to produce results
Once the business results and business solutions are defined, the business is ready to be organized. The business is organized by deploying or assigning a business performance solution to produce a specific result with details on performance expectations, level of utilization, costing methods, etc. When all the solutions are deployed, the result is detailed with result goals, result responsibility, etc. When all solutions are deployed to produce specific results to enterprise is organized, and ready for operations and management to utilize solutions in performance to produce value in results.
The business structure is reorganized with each change to a result or solution
Only two entities can change in business change: the result produced; or the business performance solution utilized to produce results. Business change projects provide the capability to produce new or improved results by developing and implementing new or improved solutions. Every business change is effected by updating the business structure to reorganize the business
The business structure is used to record business transactions
Business transactions record business activity that affects the business structure. Basic business transactions include:
- New solution added to structure
- Unused solution deactivated
- Solution deployed from or to a result
- Update to solution descriptor
- Progress and problems in utilizing a solution
- Utilization of a solution to produce a result
- New result added to structure
- Update to result descriptor
- Progress or problems in producing a result
- Result produced
- Completed or discontinued result deactivated
Each of these transactions changes the business data recorded in the business structure and provides a record of the update to the business structure. This set of basic business transactions can be used to record the complete enterprise business.
The business structure provides the information to optimize the business
Data is maintained on each business solution as indicated in the Logic of a Business Solution and on each business result as indicated in the Logic of a Business Result. This data enables the performance solutions utilized to be managed against the result produced to optimize the business. The enterprise can manage performance capacity used for result volume, performance costs against result value, performance effectiveness for result quality, performance uncertainty to reduce result risk, and performance expectations to reach result goals to optimize the business.
The strategic business structure defines the future business
Just as the current business structure is the only way to define the current business, a strategic business structure is the only way to plan and describe the future business. The strategic business structure shows the business planned for some future point at the strategic horizon. Business results are shown with the value expected from strategic results. Performance solutions are shown with expected solution costs, including new solutions needed with development costs.
The strategic business structure provides a framework for the disciplined analysis and planning of the future business. Estimates of progress against the strategic business structure can be maintained as a tool for good corporate governance.
Sub-business structures are set up for project or campaign results
The enterprise business structure can include completed and closed project or campaign results. The details of the project or campaign are maintained in a sub-business structure, where the project or campaign is the enterprise and the business results to be produced and the business solutions assigned to perform in the project or campaign, shown in the structure. Solutions are deployed to produce specific project or campaign results.
For business change or capital development projects, the project results include the new results and new solutions to implement to complete the project and go into operations with a directly updated enterprise business structure.
Business structure extracts are used to manage a part of the enterprise
The enterprise business structure is organized in an information system to manage results and performance solutions. The enterprise business structure normally will be very large and be managed by business organization capital professionals. Result and performance managers normally will use extracted or sub-defined business structures. Extracted or sub-defined structures organize any combination or part of an enterprise for responsibility, value-chains, regions, product groups, collaborating businesses, or other needs to manage results with the associated performance solutions.
Extracted structures show that portion of the business at the time extracted. Sub-defined business structures show additional information for sub-results and performance solution specifics not managed in the enterprise business structure. All updates and transaction affecting the business are made against the enterprise business structure.
The Business Structure is the most important tool of 21st century management
21st century management manages the enterprise business as one integrated business structure. The enterprise business structure replaces all the 20th century structures laid over the business. The business structure provides one transparent view of the business used for all management and governance. It will be very important to know how to manage business structures as you move into 21st century management.
July 2nd, 2007 at 01:28
[…] The previous post in this series described the Logic of the Business Structure that must be used to organize the business. The business structure defines the business organization and is used for all aspects of business management. The business structure is created by combining the business performance solution structure and the business result structure into one holistic structure that defines the complete business. […]