Archive for the 'Business Process Management' topic

Some enterprises take pride in their business complexity

When you talk to a company manager about employing a standard solution the response is often “Our business is too complex for a standard solution”. This is said with a measure of pride in being associated with a complex business. Is a complex business something to strive for or to be proud of? What is the alternative to a standard solution? Do non-standard solutions simplify the business? What is better, simplify the business to use standard solutions, or continue to develop non-standard solutions that compound existing complexity?

Business complexity is eliminated by organizing only the business essentials

Enterprises today introduce business complexity as soon a they implement an organization structure that is laid over the business. Since the business is not organized, they must lay more structures for strategy, accounts, business processes, performance management, etc over the business in order to manage the enterprise. Each additional structure introduces more entities with conflicting definitions to be managed and increases business and information complexity.

Business complexity is a misnomer. The business is not complex; enterprise management through rigid structures laid over the changing business is complex. The answer is to clear away contrived overlaid structures and organize the business for simplified 21^st century business management. All business organization, planning, direction, control, reporting, and governance employs the current and strategic business structures and only the essential business data entities.

Business complexity is accepted as normal in today’s enterprise

Business complexity is built in to 20^th century enterprise management methods, so business complexity is accepted as normal. We have no straightforward method to identify and root out business complexity and then to prevent future business complexity. [more...].

20^th century enterprise management lays structures over the business to direct the enterprise

The day to day operations of the enterprise today are directed through a variety of structures laid over the business. These structures focus on enterprise performance, which mixes the actions of performance together with the results accomplished. The main structures used to direct the enterprise are:

• Processes, which define the flow of performance across the enterprise
• Functions, which define activities performed by the enterprise
• Information systems, which provide the flow of information processing
• Work assignments and tasks, to perform ad-hoc activities
• Projects, to perform one-time enterprise endeavors

These structures are used to direct performance of the enterprise and to produce results as separate entities, such as products, services, sales, and revenue.

None of the overlaid structures directs the actual business

The actual business consists of results produced, capital available in performance solutions, and performance to utilize solutions to produce each result. None of the overlaid structures direct the utilization of capital solutions to produce results. Most enterprise direction is up to the experience and capability of the manager to make decisions and take actions without a business framework.

Structures used to direct the enterprise do not relate to other management structures

The structures used to direct the enterprise do not relate directly to the structures used to organize, plan, control, and report the enterprise. A prior article showed that certain structures are used to plan the enterprise in strategic maps and corporate plans, financial plans and budgets, information technology plans and architectures, investment and capital development plans, and operational plans. The structures used to direct the enterprise are not connected to or do not necessarily refer to the structures that plan the enterprise. Enterprise direction and management is disconnected among a wide variety of structures that can be contrived and laid over any business, such as business process, administrative function, risk management, performance management, and information system structures.< [more...].

20^th century enterprise management problems are caused by rigid structures laid over the business

The generally accepted “business enterprise” definition is the activity of providing goods and services. The failure of 20^th century management to organize and manage the business enterprise in the activity of providing goods and services creates unsolvable management, business, and performance problems.

The fatal error of 20^th century management, employed by all companies, corporations, and other enterprises today, is laying a rigid enterprise organization structure over the business, rather than organizing the business. Since the business is not organized, the business cannot be managed. Therefore, rigid enterprise management structures for planning, processes, systems, financial and cost accounts, quality, administration, performance, reporting, etc must be contrived and laid over the business. Structures laid over the business conflict with the actual business, restrict business flexibility, move out of “alignment” as the business changes, prevent direct business data capture and management, and do not provide the direct management information needed to manage the business.

20^th century enterprise management improvements can never solve unsolvable problems

We continue to teach 20^th century enterprise management, contrive new 20^th century structures and “business solutions” to lay over the business, and write more 20^th century management books, but we have never solved the top ten problems of 20^th century enterprise management.

1. Reorganization: The business changes while the organization structure remains rigid, causing upheavals to lay a new rigid organization structure over the business and repeat the cycle
2. Accounting and Financial Management: Historic legacies focus on cash control and prevent professional records management and modern capital management of the actual business increasing financial risk and preventing accurate business management information
3. Investment Analysis and Development Project Management: Investments and projects are managed separate from the business, rather than itemizing, planning, and managing the costs, benefits, and return of capital development investments, as part of the business
4. Administration: Performing functions, while leaving tangible and intangible capital utilization and improvement unmanaged
5. Performance Management: “Performance” definitions mix actions executed with the result accomplished, so business processes, performance management, and KPIs mix results and performance and manage “performance quality”
6. Business Complexity: Each organization, plan, processes, system, administration, or other structure is defined separately with different definitions creating business and information complexity and preventing business collaboration and common solutions applicable to any business
7. Information Technology: Business systems, data, information solutions, networks, and architectures are designed to process overlaid structures and managed as technology, not capital, creating costly IT infrastructures and continuing capital management problems
8. Change Management: Change management addresses the conflicts between structures laid over the business and the actual business to change structures, while the business remains undefined and unmanaged
9. Corporate Governance: Problems are addressed from the governance side to restrict and control management, rather than organizing the business to be governed by management on the corporate side
10. Alignment: Rigid overlaid structures go out of alignment as the business changes requiring continual changes to the structures to align closer to the business

These and other unsolvable 20^th century enterprise management problems are discussed, in detail, here at the Business Change Forum.

Solutions to he top 10 management, business, and performance problems of 20^th century enterprise management are described in a referenced article.

The top 10 problems are eliminated by 21^st century business management

20^th century enterprise management problems are unsolvable, because they can never be solved by laying new or improved structures over the business. [more...].

Performance Management is one of the top 10 problems of 20^th century management!

The definition of performance and performance management is a fundamental 20^th century enterprise management problem

Since the 15^th century, performance has been defined as both the capital utilized in action executed and the results accomplished. The definition prevents management of results separate from performance and restricts enterprise management to one confused performance dimension. Performance management is a big part of 20^th century management, with a variety of structures like processes, dashboards, and scorecards laid over the business. Key performance indicators (KPI) mix result volumes, capital utilized, and performance levels. Business process re-engineering focuses on business process management and performance quality to produce a process output. Many performance and productivity methods and consultants redefine costs out of the process and into other capital utilized in the business.

Separate results and capital from performance to enable 21^st century business management

The performance management problem is eliminated by separating results and capital solutions from performance to organize the enterprise business in results produced, capital solutioins utilized, and the performance of a solution to produce a result. The enterprise business changes each time management decides to produce a new result, close a finished result, or utilize a different capital solution. Capital management acquires, develops, improves, and supports capital solution investments that have the potential and are qualified to produce results. [more...]

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

Business complexity is the opposite of business simplicity. The business is simplified by organizing and managing the business.

Business complexity is caused by 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) provides the knowledge to organize and manage one business structure

Result-performance Management (R-pM) provides the concepts and procedures for 21^st century business management to organize 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...]

Information Technology is one of the top 10 problems of 20^th century management!

Information Technology incorporates a wide variety of unsolvable problems

Information Technology (IT) employed today has many inherent problems that many expensive solutions have never been able to solve:

• Information technology is managed as technology, rather than as capital preventing integration with the business
• Information technology employs large monolithic information systems that are laid over the business, instead of information processing solutions that are utilized by the business
• Information Technology defines different architectures to define and align the business, systems, hardware and networks, and data and information, rather than integrating each with the business
• Different categories of information capital are mixed in many systems using different entity names and definitions producing information complexity and preventing proper information capital management
• Since the business is not organized, information systems manage information related to structures laid over the business and do not capture, process, or report actual business data or report actual business management information
• Information Technology is difficult to manage because it mixes business, facility, and management capital that require diverse management and operating capabilities
• It is difficult to manage return on IT investments since the investments are lumped together and do not produce direct measured business improvements
• Information Technology has grown into a large expensive empire that involves much unnecessary processing, extensive overheads, and unsolvable problems

These problems can never be solved with 20^th century management that tries to improve the enterprise by laying new or improved structures over the business.

Information Technology problems disappear when organizing the business for 21^st century business management

The only way to eliminate the Information Technology problems is by organizing the business with to enable 21^st century business management. Information technology must be integrated in the business as capital defined as specific solutions utilized to produce specific business results. Business management enables the following measures to eliminate the unsolvable Information Technology problem:

• The actual business is organized as specific capital solutions, including IT solutions, utilized in performance to produce specific business results
• Information system solutions are defined and integrated with the business process as modules to produce a specific result or a chain of results
• Information systems focus on managing actual business data in result value and quality, performance cost and effectiveness, capital worth, and return on capital investments that is not processed today
• Information Technology is defined and organized as capital, with other capital of the same category, for proper capital management by those with the professional capability
• Information capital is defined and managed as business data, human knowledge, facility records, and management intelligence to produce information solutions needed by the business
• Enterprise information is integrated by capital solution utilized, result produced, supplier, customer, time period, business transaction, etc in an enterprise Business Information Base for one set of complete and accurate business information
• Information systems and processing devoted to managing arbitrary structures laid over the business and special systems to address problems in data reconciliation, information integration and extraction, and management reporting are discontinued, if not directly needed by the business
• New information system implementation integrates business and information processing with other capital solutions to produce specific output results needed by the business
• The business is organized for a new generation of 21^st century business management systems and business-information process modules, to process the actual business result by result, and provide one set of consistently-defined management information

Managing information technology as capital utilized by the actual business eliminates the unsolvable IT problems in business alignment, information complexity, data reconciliation, unknown costs and value, unknown capital worth and returns, CIO and IT management capabilities, data integration and control, and on and on.

The Information Technology Problem

Enterprise information systems include a wide variety of systems that are laid over the business

Since the business is not organized, different management structures must by laid over the business to manage the enterprise. [more...]

20^th century enterprise management cannot define and organize real value chains

Much is written about the theory of value chains and various structures have been contrived to lay value chains over the business. But, value chains cannot be defined and organized today, because 20^th century enterprise management organizes and manages the enterprise, but does not define or organize the actual business. The actual business is defined as “investments in capital as solutions of worth utilized for cost and effectiveness of performance to produce value and quality in results”. A value chain consists of a chain of results of value produced in sequence to provide a final result of value to an enterprise customer. In order to build a value chain results, capital solutions that produce results, and the performance of each solution to produce each result must be defined and organized as a sets.

21^st century business management organizes the business to provide natural value chains

Result-performance Management (R-pM) provides the knowledge, concepts, and procedures for 21^st century business management. We cannot build natural value chains, until we organize and manage the business. Business management organizes results as the links in the chain, capital solutions to deploy and implement the capital solutions needed to produce each result, and performance in the utilization of one solution to produce one result. Each link in the chain consists of one result and the capital solutions utilized in performance to produce the result. Result relationships link results in sequence and manage the complete chain.< [more...]>

Alignment is one of the top 10 problems of 20^th century enterprise management!

Alignment covers many problems arising from conflicts between the actual business and overlaid structures

We keep hearing about alignment problems. Alignment problems are caused because the business is not organized. Alignment problems arise from actual business change in results produced and capital utilized as solutions in performance, which remain undefined and unorganized. Instead, the enterprise is organized, planned, directed, controlled, and reported through separate and distinct structures laid over the business. With every business change, rigid overlaid structures go out of alignment with the business. Many solutions are available supposedly to enable alignment. Many books have proposed alignment solutions. However, in spite of all of these solutions and books, alignment problems remain. The alignment solutions attempt to align organization and management structures with each other with nothing to align against. [more...]

The enterprise today has many unsolvable management problems

Today’s 20^th century enterprises have always had management problems, because they never managed the business “the activity of providing goods and services”. Instead, they laid 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 enterprise. 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, capital utilized, and performance are not defined and are mixed together within the process. 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. [more...].

The Enterprise Performance Problem

Enterprises developed conventional ways of operations and administration over the years to arrive at the 20^th century enterprise management used today.

Enterprise performance structures are laid over the business

Business performance used today is a misnomer. It is really enterprise performance and is unrelated to actual business performance. The fundamental problem is that today’s enterprise performance structures are laid over the business, rather than directly managing business performance in the capital solutions utilized to produce business results.

The generally-accepted definition of performance includes not only capital solutions utilized in the actions executed in performance, but also the output results accomplished from the performance. Results produced, capital utilized, and performance in the utilization of capital to produce results are defined together as performance and are not separately defined or managed in business processes, performance management methods, resource planning systems, and key performance indicators (KPI).

Business processes are re-engineered to improve enterprise performance and “performance quality”. Business process management lays a process structure over the business to produce an output result from the process, but does not organize the business to utilize capital solutions in performance to produce output results, within the process. Business process management manages quality checkpoints or other contrived methods to manage performance quality, but does not manage the cost-effectiveness of specific capital utilized in performance to manage result value and quality along the chain of results.

Enterprise systems are laid over the business for system processing

Enterprise information systems are implemented through conversions as additional overlays on the business, without positive business change. [more...].