Archive for the 'IT Organization and Delivery' topic

Do cost accounting methods capture all costs or charge the costs against the proper entity?

There are many methods of cash expenditure and cost accounting. We cost objects, processes, activities, stations, products, centers, and other entities. But, is there one entity that we really should be costing in terms of incurring costs and one entity that we should be charging to absorb and manage our costs? Do we really know if we are identifying and capturing all of our costs?

Cost accounting must measure the cost of capital consumed or utilized in performance

We continually make investments to acquire, develop, improve, maintain, and support each capital solution. Costs are incurred through the consumption and utilization of capital in performance. Costs are incurred to reduce the balance invested in the capital utilized to zero over the useful life or planned costing period. So the only entity we should cost is capital consumed or utilized in performance. If we are consuming and utilizing capital, we need to document and manage all the capital that is consumed or utilized, like processes, personnel, capabilities, information, strategies, and equipment. [more...].

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.< [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”. .

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 and 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 using R-pM to organize the business for 21^st Century Management

The only way to eliminate the Information Technology problems is by organizing the business with Result-performance Management (R-pM) to enable 21^st Century Management. R-pM integrates information technology in the business as capital defined as specific performance solutions utilized to produce specific business results. R-pM provides the following measures to eliminate the unsolvable Information Technology problem:

• R-pM organizes the actual business as specific performance solutions, including IT solutions, 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 performance 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 performance solutions to produce specific output results needed by the business
• The business is organized for a new generation of 21^st Century Management systems and business-information process modules, to process the actual business result by result, and provide one set of consistently-defined management information

Using R-pM to manage 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...]

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...].

Chief Information Officers (CIOs) face a difficult situation

Much is written about the “CIO Problem”. Often it written to appear that the problem is with the CIOs, when the problem lies with the organization and management of Information Technology (IT). The main problems with normal corporate IT are:

• Information Technology has become a difficult to manage mixture of capital that is administered as technology, rather than being managed as capital
• The mixture of capital requires many basic human capabilities that no one individual can hope to possess
• Information systems have become very complex and difficult to maintain and manage
• The corporate data base maintains mostly information that is irrelevant to managing the actual business, creating information complexity and management difficulties
• The IT architecture, equipment, and networks are managed separately from other corporate infrastructure and is generally unwieldy
• Information capital in data, knowledge, and intelligence is managed as technology
• Information Technology is separate from the rest of the corporate business creating alignment difficulties
• Information Technology is administered rather than managed as capital to provide the solutions needed to produce other enterprise results
• The “technology” is no longer so specialized, or is sub-specialized in pockets, and is no longer a valid reason to group diverse capital together
• There is no business framework for managing Information Technology, making it difficult to plan and manage the specific results to be produced

These problems make it difficult for anyone as a CIO or Information Technology Manager to manage the scope and environment of information technology today.

Result-performance Management (R-pM) organizes Information Technology as capital

Result-performance Management (R-pM) organizes the business for 21^st Century Management. If you are not familiar with R-pM, review the posts under Learn the Basics of R-pM for the orientation you need.

R-pM has been accused of doing away with IT and the CIO position. R-pM does away with administration and Information Technology Units in order to organize enterprise capital to be properly managed by those with the specific basic capability. CIOs and IT managers accept substantial responsibilities for the management of the capital for which they are best suited.

R-pM organizes the capital involved in 20^th century Information Technology as follows:

• Business systems and data are business capital, used to produce a specific result, that must be organized and managed as business process, and business data capital
• IT architecture, equipment, and networks are facility equipment that must be managed together with communication networks and other enterprise infrastructure
• IT strategy is management strategy capital that must be managed together as a strategic business structure
• Information capital must be separately managed as business data, human knowledge, facility records, and management intelligence to provide needed information solutions to produce results

R-pM organizes business, human, facility, and management capital units to produce capital and performance management results.

Current information systems do not manage the business

Current information systems are large contrived systems that do not manage the actual business. [more...].

“Information Complexity” increases with each structure laid over the business

Information complexity is a common outgrowth of contrived organization and management structures laid over the business. The organization structure creates entities for unit, postiton, job, function, manager, etc. Management structures create entities for objective, process, center, account, group, activity, responsibility, object, station, and on and on. Each overlaid structure uses different entities and different names for the same entity, preventing information integration and reconciliation.

R-pM organizes and manages any business through five information sets

R-pM is designed to utilize modern information technology to organize the business for 21^st century management. R-pM eliminates information complexity by organizing and managing the business through five information sets to define business results, performance solutions, capital, enterprise interactions, and change over time periods.

Learn more through the article in 21^st Century Management Magazine “Eliminate Information Complexity”.

21^st Century Management eliminates 20^th century problems

Eliminate the information complexity problem and other costly 20^th century problems by organizing your business for 21st Century Management. Slash costs, simplify business management, and boost your competitive advantage through Result-performance Management (R-pM), the conventional method for 21st century management.

Download your 21^st Century Management Manual today

Your 21^st Century Management Manual, The R-pM Toolkit, is available today and is under continual development to expand and refine 21st Century Management Learn more about the R-pM breakthrough for 21^st century management and subscribe to your 21st Century Management Manual, including free updates through 2009, at result-performance-management.com.< [more...]>

Information technology is changing faster than the management of information technology

The organization, processing, and data that produces a specific result used to be integrated business capital processed by human capital and tangible asset facilities. Then computers came along with expensive technology that had to be separated from the business and operated by specialists. We set up data processing, which evolved into information technology or IT. Today we manage information capital and information solutions as technology, rather than information capital to be utilized to produce results.

The solution is provided by Result-performance Management, which integrates application system processing with the business process, integrates hardware, software, and networks with other facility equipment, and manages data, knowledge, records, and intelligence through the capabilities needed for high-worth information solutions. Review the R-pM article “Solve the CIO Problem by Proper Capital Organization and Management” and the R-pM community download “Organizing and Managing Performance” to see how to manage information as capital to be utilized, rather than technology to be administered.

The power of Information Technology can be put back with users

We now have conventional methods of managing Information Technology. But now information technology is changing, so that the power of IT can be put back into the hands of the user. In effect, we can now re-consolidate data processing back with our business capital. [more...].

In an article on 29 January we discussed the Rapid change in technology and slow change in IT. We are finally starting to wake up to the long-standing problems in the way we manage and deliver IT services.

IT has been operating as an exception since its introduction because the technology was so specialized. But now the technology is becoming more common. We have identified the CIO problem where one person does not have the natural aptitude to manage strategy, systems development, and technology operation. We need to split up IT to be managed effectively as capital, within the whole of enterprise capital.

R-pM separates information technology as capital to be supported and utilized

There are two important aspects to managing capital:

1. Managing capital creation, development, and support
2. Managing capital integration and utilization to produce results

Result-performance Management organizes information technology as capital to be developed and utilized. Learn more by clicking the banner to go to result-performance-management.com.

Information Technology is categorized to be developed and supported as capital

IT strategy must be blended in with the enterprise management strategy, not a separate solution, so strategic information system planning is management capital. Systems development must be integrated with the business development and systems processing must be integrated with business processing. Data describes the business, so system development, information processing, and data are business capital. Technology operation is part of our equipment and network solutions the same as our telephone network. So the enterprise service architecture, network, and equipment and operations are facility capital. [more...]