Solve the Chief Information Officer (CIO) problem by organizing capital properly
Our Chief Information Officers (CIOs) have a problem, since one person is required to have many capabilities to manage diverse capital. The CIO has to have professional capabilities with management strategy, technology, equipment and network operations, information system logic, business organizations, and business processes. The CIO also needs to have capabilities with all types of enterprise information capital data, knowledge, records, and intelligence.The solution to the CIO problem lies in the organization of corporate capital to define capital as specific capital solutions, apply the distinct human capabilities needed to manage, develop, and support the capital solutions, and to manage the performance of capital solutions in utilization. The solution is provided by Result-performance Management (R-pM).
The CIO and IT manage diverse capital as technology
The CIO problem extends down from the CIO into the Information Technology (IT) function. IT has to have capabilities with the various capital as well. All the enterprises have problems somewhere or another, because organization and management structures are laid over the business, and IT does not have the capability to handle all of its capital support responsibilities.
We have such examples as:
- Many organization and management structures such as maps and plans, processes, accounts, activities, projects, functions, and scorecards are laid over the business requiring excessive IT resources to process
- Application systems are managed as technology and laid over the business rather than being integrated with the business process as part of the business
- Much high worth capital is labeled as “intangible assets” and is not defined or managed at all
- Each information system defines the enterprise differently creating information complexity and producing much conflicting information on enterprise operations and development
- The information complexity problems is addressed by more IT investments in data reconciliation, enterprise information management, and IT architectures
- The analysis of business improvement needs is separated from the business into IT, and needs are satisfied by technology rather than precisely-defined business improvements
- Business change is then often stuck in the technical IT backlog
- Users assistance is restricted to how to use technology per se and is no help in using technology to solve business problems
- Information is managed as technology, not as capital to be utilized
- Stress on data and records with little support capability for knowledge or intelligence
- System utilization is managed as availability or a service level, rather than supporting utilization of the system to create value
So, how do we solve the CIO problem and the problems faced by IT?
We now propose a Chief Technology Officer (CTO) to handle information and communication technology needs. The idea of splitting out management of our capital based on professional capabilities required is valid, but we must do it right.
We must organize capital by the human capability required
The root of the CIO problem goes back to the beginning of IT. Our business processing used to be managed by each business unit with support from an enterprise organization and methods kind of unit. Then we started employing computer technology in our business processing that required special professional capabilities, so we set up data processing to develop the programs and to operate the expensive centralized technology. So then, diverse capital such as business processing and data and computer equipment and networks were brought together under the data processing to provide a variety of computer skills. We began to process data separate from the business. Then data processing expanded into the Information Technology units of today. So now, we manage information as technology, rather than as capital. As IT expanded, it became more difficult to manage, so we appointed a czar in the CIO.
But, what happened to the rationale that set up data processing? We no longer need much programming capabilities, since we are using packages. The systems are much more pervasive and familiar, so everyone in the enterprise has basic capabilities. More and more of our computer power is operated by the users, with IT handling the connecting architecture and network.
It is time that we rethink IT and all of our capital using the basic premise. “What professional capabilities are required to manage and support our capital”? We also need to rethink the meaning of capital utilization. We think of utilization as being used. We need to think of utilization as being employed for measured benefit that provides the return on the investment in capital. For years, IT has provided equipment or a service, and nobody managed how IT was utilized to benefit the business and to gain the return on IT investments.
R-pM organizes capital to be supported and utilized as part of the business
The answer is provided by Result-performance Management (R-pM), a new management breakthrough now being launched. R-pM organizes the three components of the business into one business structure.
- Results: Economic outputs of quality and value produced by business performance
- Capital: Investments in solutions of worth to be utilized in business performance
- Performance: Each specific solution deployed to a performance domain to be utilized in performance to produce a specific result
The business structure can be viewed as a matrix, like a spreadsheet, with results organized across the columns, capital solutions down the rows, and performance domains in cells where a capital solution is deployed with rules to incur costs and provide effectiveness needed to produce the result. All solutions down one result column add up to total result costs to produce the volume and value of the result and provide a measured value-added when deducted from the result value. One solution utilized across a row to produce many results adds up to the total operating cost or amortized development cost for the solution.
R-pM organizes capital into solutions by capital category for support and improvement and by capital class to be integrated with other solutions in the same class and then to be utilized in performance to produce results.
R-pM manages capital for support and utilization as part of the business
R-pM solves the CIO and IT problem as a by-product of proper capital management. R-pM structures all of our capital to satisfy important needs:
- Identify all capital, including intangible assets, as specific solutions to be managed
- Categorize capital to apply the professional capabilities needed to produce capital management results
- Produce capital management results to operate, support, and develop the specific category of capital
- Classify capital, including information, as capital solutions so that they can be integrated and utilized by the business to produce results
- Manage the performance of capital, so that it is utilized properly to produce results and provide the return on investment
- Manage information systems and information as capital to be utilized, not as technology to be administered
R-pM manages capital by producing specific capital management results. The performance solution that has the most impact on whether we produce a good or defective result is human capability. A basic principle of R-pM is to match the human capabilities required in the business process to the capability deployed to produce the result.
Four basic capabilities are required for capital management
R-pM organizes capital in four categories that require the same capabilities to be professionally managed:
- Business: Capital developed to be directly utilized to produce specific results, including enterprise application system processing and data, which requires business knowledge and analytical capability
- Human: Human personnel and capabilities and knowledge to produce a result, which requires human handling and development capabilities
- Facility: Tangible capital, including the IT service architecture, that supports results, which requires expertise to maintain and administer
- Management: Capital that plans and directs results, which requires research and management judgment
All capital investments are broken down into solutions in one of these four categories for professional development, improvement, and support. Each category provides performance management to ensure that qualified solutions are deployed and then utilized properly by result management to produce results.
R-pM organizes capital within each category by three capital classes for integration to produce results
Capital solutions must also be integrated and utilized in performance to produce results. Capital solutions are organized into three classes for integration and utilization by result management.
- Readiness capital to provide the capital solutions required as part of a business organization unit to produce the first result in business organization, human personnel, facility equipment, and management strategy
- Production capital to provide the capital solutions directly required to produce a specific result in business process, human capability, facility supply, and management tactics
- Information capital to provide the information solutions to produce specific results and to document results produced in business data, human knowledge, facility records, and management intelligence
Capital solutions within each class are integrated as able with the business solution for common access and utilization to produce a specific result.
Capital solutions are managed for development and support and for utilization by solution type
When capital solutions are organized by four categories for support and three classes for utilization, there are 12 capital solution types to be managed.
- Business organization for the developed business structure, units, roles, and relationships
- Business processes for developed system and work flow processing
- Business data for current access to and updating of basic business data entities
- Human personnel for all internal and external individuals in utilized in operation to produce a set of results
- Human capability for developed capabilities needed to follow a business process to produce a result
- Human knowledge for developed knowledge leveraged by personnel to utilize solutions and produce results
- Facility equipment for all reusable and depreciated tangible assets
- Facility supply for the current costs for all consumable assets
- Facility records for financial and non-financial recording of business transactions and developed solutions
- Management strategy for the developed strategic business structure and management plan solutions
- Management tactics for evaluations and assessments and developed management action solutions
- Management intelligence for internal analysis and external research to develop management information solutions
When we examine our capital to define it, structure it, and manage it properly, we will automatically solve the problems of mismanaged capital and the organization of IT. Application systems and data are business capital, the network is facility equipment, and the IT strategy is management capital. Information is no longer technology, but capital to be integrated and utilized to produce results.
Result-performance Management (R-pM) provides professional capital management
Result-performance Management (R-pM) manages tangible and intangible assets as specific performance solutions both by capital category to support and improve solutions, and by capital class to deploy and ensure proper utilization of solutions to produce results.
With R-pM, the CIO is no longer be one individual expected to do everything. There are separate professionals with capabilities to manage each category of capital (business analyst, human handler, facility expert, and management researcher). With R-pM, capital is managed and supported by professionals, who have the capabilities required to manage, support, and utilize the capital. Learn how easy it is to implement and utilize R-pM for breakthrough competitive advantage, and obtain The R-pM Toolkit for complete details and continuing updates at result-performance-management.com.
