Archive for the 'Business Transformation' topic

Result-performance Management (R-pM) is the conventional way to organize the business for 21^st century business management. Business management provides a common business structure for business organization, business operations and development, business collaboration, business learning and education, common business services that can be applied to any enterprise, and common business software and solutions that any enterprise can utilize.

An adjunct to the development of business management is the development of 21^st century management conventions and standards. 21^st century management is one consistent and clearly-defined set of business organization and management descriptions, conventions, standards, coding structures, and definitions that eliminate the contradictions, inconsistencies, and unsolvable problems of 20^th century management. R-pM and business management adhere to 21^st century management conventions and standards.

21^st century management is documented in the Business Management Toolkit

Business management is documented in the Business Management Toolkit, your 21^st Century Management Manual. 21^st century management descriptions, conventions, standards, and definitions are also documented in the Toolkit. The Business Management Toolkit is under continuing development. The Toolkit already contains the fundamental documentation needed to begin learning, implementing, and utilizing business mManagement. Those downloading the Toolkit today receive a subscription to all future Business Management and 21^st Century Management advances and documentation as updates to the Toolkit.< [more...]

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

The enterprise organization structure is the fatal error of 20^th century enterprise management

Why do we have to reorganize every few years? Why not organize just once and reorganize gradually as the business changes?

There are many 20^th century business organization theories and methods. Hundreds of books have been written on how to organize the enterprise, organization development, and organization change. There are many so-called business organization methods and structures, but these structures organize the enterprise and are laid over the business. The structures do not organize the actual business, causing the unsolvable reorganization problem. If the business is not organized the business cannot be managed. Additional management structures must be laid over the business to manage the enterprise. This is why the enterprise organization structure is the fatal error of 20^th century enterprise management.

Organizes the business for one business organization structure used for all business management

The business enterprise is defined commonly as “the activity of providing goods and services“. [more...]

Capital Development Project Management is one of the top 10 problems of 20^th century enterprise management

20^th century enterprise management cannot plan, manage, or repay capital development projects

Capital development projects for internal management or business improvement today tend to be ad-hoc and conducted separate from the business. We have unsolvable problems in 20^th century capital development project planning, management, and return on the project investment, so we cannot:

• Plan and manage operations and development as an integrated continuum that is part of the business
• Itemize, plan, and achieve specific benefits from development projects
• Clearly and systemically understand what we must be implementing from projects as part of the business for ongoing management and return on investment
• Scope the project as part of the enterprise business to define specific results to add or improve and specific capital solutions to acquire, develop, or improve
• Plan the output results to be produced from the project in specific capital items to be implemented and utilized by the business
• Utilize users and administrative staff in proper roles in the project
• Utilize contractors and consultants as solutions in an enterprise-managed project
• Document and record the project so that all capital developed is fully documented and that knowledge required for use is created
• Manage the capital to be consumed and utilized in the project
• Manage the capital development project as a subsidiary business
• Record accurate development costs by capital item developed
• Implement project results as capital items for direct utilization by the business
• Measure the actual return of capital development investments overall and by capital solution utilized

The unsolvable 20^th century enterprise management problems hamper project management, particularly for enterprise internal capital development and management improvement.

Manage results to drive capital development and gain the return in result value created

Business management provides new breakthroughs for planning and managing enterprise capital development and planning and managing the capital development project.

Capital development develops two things:

• The capital to be utilized as solutions that incur costs
• The results to be produced by the developed capital to provide benefit and return

When we plan and manage a capital development project, we must plan and manage two things:

• The results to be produced by project performance
• The capital to be consumed and performance solutions to be utilized to perform the project

Business management utilizes Result-performance-Management knowledge and procedures to do both. [more...]

Over the past three months, the Business Change Forum published a series of articles on the “Ten Rules to Organize the Business for 21st Century Management” to guide business organization for competitive 21^st century business management.

The ten rules of 21^st century business management are:

1. Organize and manage the business
2. Generate revenues from a chain of known value and quality
3. Organize and manage capital for high utilization and return
4. Keep accurate financial and non-financial records on the full business cycle in operations and development
5. Operate to optimize operations, result value-added, and the profit result
6. Plan and govern the transition from today’s value to approved strategic value
7. Manage all capital investments to gain a planned return through results
8. Manage human personnel, capability, and knowledge capital to increase human worth
9. Collaborate to maximize shared value and minimize shared costs
10. Employ 21^st century business management conventions and standards

The ten rules are described in the linked article and under the forum “Ten Rules for Business Management”. [more...]

The enterprise organization structure prevents management of your company business today

All enterprises employ 20^th century enterprise management, which lays organization and management structures over the business to manage the enterprise. Once an enterprise organization structure is laid over the business, the business can never be managed. The enterprise organization structure is rigid while the business changes. This produces the reorganization problem. If the business is organized, the organization changes with business change eliminating the reorganization and change management problems.

Your company business consists of five important areas that must be managed for value, cost, and profits

The company business is defined as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. In order to manage the business, five important areas must be managed.

• Value and quality in results: Economic output results needed for business success must be managed to produce interrelated outputs across the business and manage the value added to the profit result
• Capital investments in the business:  All capital investments must be managed to acquire, develop, and implement capital solutions needed to produce specific results, to plan the value added to results, to plan the worth of solutions, to know the cost of investments, and to justify the return of investment
• Implementation and maintenance of capital as solutions: Capital utilized by the business must be supported and managed as specific solutions implemented to produce results and provide the actual result value-added return on investment
• Costs and effectiveness of performance: Business performance must be managed to utilize capital solutions cost-effectively to produce value-quality output results
• Strategic result value creation: Business performance must be managed over time to create value in results and develop new solutions needed against strategic business plans

The company business must be managed as one current in operation business structure and the planned strategic business structure. Once the business is organized; organization, planning, accounting, performance management, reporting, and other structures used today to manage the enterprise are no longer needed.

Manage the value and quality of all results produced by your company business along the full revenue-generation chain

The objective of every company business is to produce products and services and other economic output results in a chain of results that lead to the revenue and profit results. [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...].

All capital development should develop capital, plus business results for return on investment

Every business enterprise must produce output results that lead to goods and service results to create value. An expanding enterprise must produce new results of increasing value. The enterprise needs additional capital in order to produce new results as part of the business. The capital must be acquired or developed, implemented as specific capital solutions, and then utilized to produce improved or new results of increased value. The value added to new business results must justify the capital expenditure to acquire or develop needed solutions and provide the return on investment.

All capital development is really result and capital development to develop capital as solutions to be utilized to create additional value in output results produced by the business. The additional value of output results provides the return on the capital development investment. If the capital solutions utilized and the results produced by business performance are not managed, result and capital development cannot be managed properly and the return on investment cannot be measured. Even physical capital development, like a new building, produces capital solutions to produce results, be it the enterprise office facility solution or a facility solution to produce lease or rental income results.

20^th century enterprise management does not organize or manage results or capital as sets

20^th century management used today does not manage the enterprise business, defined as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. [more...].

We have been indoctrinated to accept contrived 20^th century enterprise management as the way that things are done

All existing business methods, all business school teachings, all new business and management solutions, and all management books produced today propagate contrived 20^th century enterprise management, which manages the enterprise by laying organization, account, process, activity, and other management structures over the business. Here at the Business Change Forum we have hundreds of articles that explain the fatal flaws and fundamental unsolvable problems with obsolete and outdated 20^th century enterprise management. We explain the alternative for natural 21^st century business management to manage the business directly as one business structure.

Even with all their flaws, 20^th century business organization and management structures are generally-accepted. People do not want to think and analyze to solve problems; they want a ready-made proscribed solution based on familiar methods. But since 20^th century management is a very costly and flawed way to manage, all we do is propagate bad management, high costs, and unsolvable problems.

Problems are unsolvable, when our mind is closed to solutions

The biggest obstacle to solving business management problems is not finding the solution, but opening our minds so that we can see the solution. Even if the solution is right in front of us and should be obvious, we are blinded by a mind that is closed to the solution. Many experts and analysts are looking for a solution to prevent future economic crisis. The obvious solution, manage the business, cannot be seen. [more...].

Business transformation has a bad name today because of past problems and failures

20^th century business transformation was a big thing over the past twenty years. But did it transform the actual business and solve fundamental problems with a sound structure for business success; or did it simply rearrange the 20^th century management structures and methods that are the cause of business problems? We see the problems suffered by financial institutions that cannot manage “asset value”, corporations that are unable to manage their businesses, and limited and inaccurate accounting that cause the financial crisis and economic recession.

20^th century transformation did not transform the actual business or provide expected benefits

20^th century business transformation changes the organization structure, strategy structure, business process structure, performance management structures, account structures, information technology architectures, management information structures, and other structures that are laid over the business, rather than organizing and managing the actual business. Conventional 20^th century enterprise organization theories never organized the business. If the business is organized, routine business change updates the business organization continually, instead of having separate business change and transformation projects.

The business changes with every business decision, not every few years when management decides it is time for business change. The only reason that business transformation is needed is because the business is not organized and managed. Conventional business change and transformation is not change to the business, but change to the structures laid over the business. Many 20^th century business transformation methods, like total quality management (TQM), business process reengineering (BPR), and activity-based costing (ABC) laid new contrived structures over the business, and are no longer considered viable today.

Business transformation must organize and manage the business as one structure

Business transformation describes what is needed to learn, organize, and manage the actual business for 21^st century business management. [more...].

The Economic Recession provides opportunity for corporations and governments

All nations and economies are suffering from the economic recession. But, every economic downturn or financial crisis is an opportunity for those with the proper viewpoint. Will corporations use people and resources made available to organize and manage their real business? Will governments take advantage of the downturn through a program to eliminate the fundamental business management problems that cause the crisis; to restore and build confidence, stimulate the economy, and prepare local businesses to flourish in the upcoming recovery? Or will governments throw money at the obvious symptoms and fail to understand the fundamental problems, as always in the past?

We cannot continue to use dead-end 20^th century management

This financial, corporate governance, and economic crisis and all past crises are caused by one fundamental problem; failure to manage the corporate business. Since the beginning, all business, financial, corporate governance, and economic crises and problems have arisen because businesses are not managed, finances are not managed as capital solutions utilized by businesses; and corporations, industries, and economies are not managed as one interrelated whole, comprised of the businesses involved. The problems are fundamental to 20^th century management still used today to manage enterprises, finances and financial institutions, and economies.

Dead-end 20^th century management lays organization and management structures over the business that conflict with the actual business and cause many well-known, but unsolvable, management problems. The problems can never be solved by added or improved 20^th century management structures. [more...].