Archive for 'R-pM Solutions'

Many methods have been put forth for cost accounting and control and value management. The main cost accounting methods charge costs to center and activity. Financial accounting charges some costs as expenditures to objects. Value management methods used today do not manage actual business value creation, but provide arbitrary methods to calculate numbers called value.

Cost accounting and value management are prevented by the organization of today’s enterprise

Conventional cost management is restricted by problems with “intangible assets”, “unknown costs”, and confusion over where to charge costs. We also want to manage value, but we have no viable method for value management. We need a method to get rid of intangible assets and unknown costs and to charge our costs to the meaningful things. We also need a method to manage value as part of our business.

Result-performance Management provides the answer by organizing the business for 21^st Century Management

Result-performance Management (R-pM) is a breakthrough for actual business cost and value management. Result-performance Management (R-pM) is available today to organize and manage the business by all tangible and intangible capital utilized as solutions in performance to incur performance costs to produce economic output value in results over planned time periods. [more...]

Redefining BPM: Why Results and Performance Must Be Separated

The June 2008 issue of BPM Business Performance Management Magazine carries a lead article explaining the business organization and management breakthrough with Result-performance Management (R-pM). The article, “Redefining BPM: Why Results and Performance must Be Separated”, explains the superiority of R-pM over 20^th century management methods like BPM, be it business performance management or business process management. The article explains problems with 20^th century management and why R-pM as the only way to organize the business for 21^st Century Management to eliminate 20^th century management structures laid over the business.

20^th century definition of performance prevents business organization and management

One of the main problems of 20^th century management methods like business performance management (BPM) is the definition of performance to include both the utilization of capital in actions executed and results accomplished. Performance management methods and Key Performance Indicators (KPI) mix together capital utilized, performance at an ongoing level, and results produced as economic outputs in a time period. Business Performance Management (BPM) does not identify or manage results, capital, and performance as entities and sets of items to be managed. This prevents the business, which the article defines as “the utilization of capital of worth in performance to incur costs and produce value in results” from being managed.

Results and performance must be separated to organize and manage the business

Result-performance Management manages results separate from capital, and the utilization of capital in performance. [more...].

20^th century management used today lays various plans over the business

20^th century management cannot plan the business directly because the business is not organized. The enterprise is planned through various structures laid over the business. These overlaid planning structures include:

• Strategic plans using such structures as maps and corporate plans
• Financial plan and budget structures
• Information technology plans and enterprise architectures
• Capital development plans and investment analysis structures
• Operational plan structures

Each of these planning structures uses its own set of entities to describe the enterprise, uses different information systems, and requires its own support staff. Each plan must be maintained and updated with actual progress against the planned entities, and reported. The plans plan the enterprise in various ways depending on the particular structures implemented. It is difficult to understand and manage the actual business from these plans.

None of the overlaid plans plan the actual business

Since the business is not organized, the business cannot be planned. The results produced by the business cannot be planned as an interrelated set. Some results may be planned in isolation as separate entities such as product sold and revenue received. The plans are usually created from estimates rather than a period by period build up from the existing business. [more...].

The typical corporation has enormous IT overheads, but still has no system to manage the business

The typical corporation spends enormous sums on Information Technology and has a large IT overhead with many complex information systems. But with all this, the corporation still does not have the one information system really needed to manage the actual business. Information systems lay additional structures over the business or manage other structures laid over the business. This produces enormous business and information complexity. Corporations invest in additional systems for data reconciliation and information management, rather than simplifying information to one consistent set that reports the actual business.

The corporation has much capital administered as Information Technology instead of being managed for corporate benefit, and has much information administered as technology instead of being managed to provide information solutions for business and management results. There are no unifying business entities to be referenced to control all information in, entering, or leaving the enterprise, including emails, Internet downloads, and file transmissions.

Result-performance Management (R-pM) manages the business as one integrated information system

Result-performance Management (R-pM) uses IT to manage the actual business as one simplified Result-performance Management System. R-pM manages other simplified application programs as performance solutions integrated with the business process, where needed, to produce a specific result.

R-pM eliminates overlaid 20^th century business information systems and the need for a large IT overhead. [more...].

The typical corporation has enormous IT overheads, but still has no system to manage the business

The typical corporation spends enormous sums on Information Technology and has a large IT overhead with many complex information systems. But with all this, the corporation still does not have the one information system really needed to manage the actual business. Information systems lay additional structures over the business or manage other structures laid over the business. This produces enormous business and information complexity. Corporations invest in additional systems for data reconciliation and information management, rather than simplifying information to one consistent set that reports the actual business.

The corporation has much capital administered as Information Technology instead of being managed for corporate benefit, and has much information administered as technology instead of being managed to provide information solutions for business and management results. There are no unifying business entities to be referenced to control all information in, entering, or leaving the enterprise, including emails, Internet downloads, and file transmissions.

Result-performance Management (R-pM) manages the business as one integrated information system

Result-performance Management (R-pM) uses IT to manage the actual business as one simplified Result-performance Management System. R-pM manages other simplified application programs as performance solutions integrated with the business process, where needed, to produce a specific result.

R-pM eliminates overlaid 20^th century business information systems and the need for a large IT overhead. Information technology capital, support, and capabilities are no longer managed separately as “Information Technology”, but are integrated as part of normal capital management. R-pM references all information to the actual business and integrates all information as capital in one Business Information Base to produce data, knowledge, record, and intelligence solutions needed to produce specific business results.

R-pM enables simplified information systems, integrated capital management, and integrated information capital solutions

Result-performance Management eliminates the Corporate IT Empire and the complex information systems laid over the business by organizing and managing the actual business with one simplified system, by simplifying applications to produce specific results, and by properly managing information technology and capital as capital.

IT capital is organized with similar business, facility, and management capital to be managed by professionals. IT systems needed by the business are integrated with the business process to produce specific results. One set of complete, consistent, and accurate management information is reported against the actual current and strategic business, including measured performance costs, result value and value-added, capital worth, and return on capital investments that cannot be measured today.

IT systems and overheads not needed for the business are eliminated. New IT investments are restricted to Result-performance Management Systems to manage actual business results. IT expenditures and investments are reduced dramatically to only those needed to support and manage the actual business.

Learn more in the article “IT Empires and Systems that do not manage the actual Business“, which explains the problems with 20^th century information systems and the administration of high-worth enterprise capital as “information technology”. .

Structures laid over the business produce enormous information complexity

20^th century management does not manage the actual business, but manages the enterprise using a multitude of organization, process, account, performance, system, administration, etc structures laid over the business. The structures are rigid and do not change with actual business change. No structure captures consistent, complete, and accurate business data. The various structures use different names for the same entity and different definitions for the same part of the enterprise. Information systems computerize the various structures producing enormous amounts of incomplete, inconsistent, and inaccurate information. This causes the exploding information complexity and information management problems enterprises are experiencing today.

Information generally is not organized and managed as capital

Information capital management is not well organized. Accounting is responsible for financial records, information technology may perform data management and record retention, there may be a function for knowledge management, record management, or business or management intelligence. Even with this, there is little management of information for application to improve the business. There is no structure to relate information directly to the business and no data is collected on the actual business as a related set.

The explosion in enterprise information problems and investments demands a basic rethink

These problems are aggravated by the proliferation of IT use for email, Internet information storage and downloads, information exchanges, imaged documents, etc. New corporate governance requirements demand a solution to these problems. [more...]s.

Business Complexity is one of the top ten problems of 20^th century management!

Business complexity is the opposite of business simplicity. The simplest way to organize and manage the business is to organize and manage the business.

Business complexity includes complexity in structures laid over the business and different information in each structure

Instead of organizing and managing the actual business, today’s enterprises lay organization, planning, directing, control, and reporting structures over the business. These rigid structures conflict with each other and the actual changing business creating the business complexity problem. Each structure defines the enterprise differently using inconsistently-defined entities and various information systems, producing the information complexity problem. Different structures used by different enterprises prevent business collaboration and integration.

Result-performance Management (R-pM) organizes and manages one business structure

Result-performance Management (R-pM) organizes one business structure for all planning, directing, control, and reporting. Existing capital is organized as part of the business and overlaid structures are left behind. The business structure produces one set of complete, accurate, and consistently-defined business management information, including actual business information on result value, capital worth, performance costs, and result investment returns that are unknown today.< [more...]

R-pM Community members and R-pM Toolkit users ask questions about identifying and defining business results, such as new product or service developed, products produced, product or service sold, services delivered, capital supported, capital developed, projects completed, etc. Specific questions are answered by email, but we summarize common questions in the series of articles on How to Use R-pM.

Defining business results is new, since results produced by the business have never been identified and managed as a set. First, it is important to designate a capable business analyst to lead business organization capital, so that expertise is developed, and a specialist can guide others. Also, use The R-pM Toolkit, which has layouts, guidelines, and the answers to most questions.

Some businesses simply ask managers to define results they produce. This can provide a first cut, but managers need explanations and guidance. Result teams for the whole business or parts of the business should analyze, brainstorm, and define the results to be produced by the future business, to be explained to and reviewed with management.

Identifying and defining results is difficult at first, but gets easier as understanding and experience is gained. Eventually it becomes the business routine. [more...]

The business must be integrated from several perspectives

The business must be integrated for proper organization and management from several perspectives:

• Management phases for organization, planning, directing, and controlling must be integrated to use the same structure and set of information
• Operations and development must be integrated as one continuum to fit development as part of the strategy and to properly utilize developed solutions
• Capital utilized by the business must be integrated as one set to manage the commonalities of all capital utilized, to organize capital for support, and organize capital again for utilization
• Results produced by the business must be integrated as one set to manage the commonalities of all results and to manage relationships between results
• Business processing must be integrated to utilize managed capital in processing to produce managed results in one integrated business structure
• Information must be integrated to capture actual business data and to integrate information capital to produce information solutions and to integrate the information capital solutions to produce results

The business can be properly organized and managed only through one integrated business structure that is utilized for integrated organization, management, operations, and development through all management phases.

20^th century management cannot integrate the business or business entities

The 20^th century business today is not integrated. 20^th century management lays incompatible structures for organization, planning, management, and accounting over the business. These overlaid structures prevent actual business management and business integration.

Therefore, the current 20^th century enterprise is unable to integrate management, operations and development, business processing, capital utilized, results produced, and information capital and solutions. Overlaid organizations, strategies, business processes, information systems, charts of accounts, control panels and scorecards, etc. cannot even be aligned, much less integrated into one consistent structure.

Capital that is labeled as “intangible assets” and is not defined as performance solutions cannot be integrated. Economic output results that are randomly identified as other entities and not managed as results cannot be integrated or inter-related, or integrated with performance to integrate the business. Information that is managed as technology and related to poorly-defined contrived overlaid entities, rather than built up from actual business data, cannot be integrated.< [more...].

Business or Systems analysts work with structures laid over the business

Historically, the business or systems analyst has never had a good business framework for disciplined analysis. The analyst usually works with an isolated problem or set of user requirements and creates a business process or system solution. The solution does not actually manage the business, but is laid over the business. The business tends to change while the solution remains rigid, requiring continuing solution maintenance to align the solution with the changed business.

Most corporations do not understand the role of the business analyst and do not properly organize their business capital. Often the systems analyst is placed in IT, which removes him from the business and provides a computer processing focus, rather than a business requirements focus.

R-pM organizes the Business Structure to provide a framework for analysis

R-pM provides a new environment for the business or systems analyst. R-pM organizes and manages the business, “the activity of providing goods and services”. R-pM organizes the activity as business performance and the goods and services as business results in a simple, easy-to-manage Business Structure defined by only two entities:

• Results: Specific economic outputs that must be produced by business performance
• Performance Solutions: Specific capital that must be utilized in performance to produce specific results

Results are the inputs to and the outputs from performance. A result is a specific accomplishment, like customer order recorded, that can be counted and measured. [more...].