Archive for the 'Measuremant and Standards' 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...]

The business utilizes capital in performance to produce results

The 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”. Every business in the world invests in capital and expects a return on the capital investment. The capital must be organized as specific solutions that have worth in order to be of benefit to the business. Capital solutions are utilized in performance and incur performance costs for the direct costs or amortization of the solution. Utilization of capital effectively in performance produces output results of quality. Each business result has a customer who wants the result produced and is willing to pay a value for the result. The result value created provides the return on investment to date and the future capital worth over the remaining life of the solution. The three components of the business are capital solutions, performance domains utilizing a solution to produce a result, and the results produced.

The objective of every business is to produce results

Results are the outputs of value that must be produced across the business for success. Revenue management results include products, services, customer contacts, sales orders, revenues, and profits. [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...]>

Methods like Total Quality Management, Six Sigma, and ISO 9000 Standards do not provide the quality management needed

We have had structures like Total Quality Management (TQM) and the ISO quality system for ISO 9000 standards and certification, which were found lacking as a management method. We also reengineered our business process with BPR, specifically to help us manage performance quality. But, performance quality proved difficult to comprehend and manage. Six Sigma provides another structure for our final production quality. Now we have business process and performance management (BPM) to manage the quality of our processes and performance. Even with all this, we still have not found a way to manage quality as the business routine of everyone in the enterprise.

Customer-determined quality is managed result by result by managing the businss

Quality must be managed as part of the managed business defined as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. By definition, in the business, value and quality are attributes of results, the economic outputs produced across a managed business. Result-performance Management (R-pM) provides the knowledge and procedures to organize the business by organizing results produced across the business as one-off results or as result chains and by organizing the capital utilized as solutions in business performance to produce each result. With an organized business, the company can manage quality as an attribute of results, not performance, and can manage real quality for any result, not just final results from production. [more...].

20^th century enterprise management has no consistent conventions, definitions, and standards

20^th century enterprise management, used by all enterprises today, lays a wide variety of organization and management structures over the business, and, therefore, cannot manage the business. A different set of conventions, definitions, and standards is used for each of the structures laid over the business. The many 20^th century enterprise management books contain different conventions, definitions, and standards. The many different business processes, information systems, IT architectures, costing and accounting, performance reporting, and administration structures each have their own set. The enterprise employs a wide variety of conventions, definitions, and standards to manage the enterprise, rather than one limited and consistent set to manage the business.

20^th century management does not support common solutions, collaboration, or measurement across enterprises

The lack of consistent conventions, definitions, and standards prevents business collaboration and integration, common solutions that any enterprise can use, business measurement for comparison across enterprises, common learning that can be applied to any business, educated and trained personnel that can fit into any business, and other long-unfulfilled business needs.

Rule No 10: Employ 21^st century business management conventions and standards

Rule No. 10 of 21^st century business management eliminates the problems of conflicting and confusing business conventions, definitions, and standards by providing one set related to directly organizing and managing the actual business. Terminology that is not related to the actual business and conventions and standards established to maintain structures laid over the business are not continued.

21^st century business management provides one set of consistent conventions, definitions, and standards for the actual business

21^st century business management is documented in the knowledge and procedures provided by Result-performance Management (R-pM). [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...].

Rule No. 5 of the ten rules of 21^st century business management is Operate to optimize operations, result value-added, and the profit result. This rule requires that the capital solutions utilized to produce each result are optimized to be cost-effective and produce a high value-quality result, so that all business operations are optimized.

21^st century business management organizes the performance producing each result

Business operations cannot be optimized unless the business is organized in order to manage the specific performance that produces a specific result. The 21^st century business is organized using Result-performance Management (R-pM) knowledge and procedures, so the business can be optimized, by ensuring that capital solutions are deployed or implemented to produce the proper results and are integrated to employ the most cost-effective performance to produce the highest value-quality result.

21^st century business management organizes capital investments as specific solutions

21^st century business management organizes the capital the enterprise invests in as specific capital solutions that are implemented to be utilized to produce one or more specific results. This allows the enterprise to capture the cost of developing or improving the capital and to assess the:

• Cost of consumption of the capital in operations
• Performance costs generated as solution worth declines over the solution life
• Effectiveness of the capital to produce a high-quality result
• Capacity of the capital to produce a volume of results
• Uncertainty of the performance of the capital and the risk of a poor result
• Return provided on the investment in the capital from the share of result value added to date
• Level of performance of the capital against expectations
• Worth of the capital assessed from result values to be produced over the remaining life

Capital solutions are categorized as business, human, facility, or management capital so that a performance manager with specific capabilities can be responsible for providing qualified solutions. Within each category, solutions are classified as one of three classes; as readiness solutions to prepare an organization responsible for a set of results, as production solutions to be used or consumed in producing each actual result, and as information solutions to support or document results. Capital solutions are integrated by capital class for utilization to produce a result.

21^st century business management organizes the outputs from business performance as specific results

21^st century business management organizes the inputs incorporated and outputs produced by the enterprise as results. [more...]

20^th century enterprise management cannot capture and report essential business management information

20^th century enterprise management lays separate structures over the business for management organization, planning, direction, control, and reporting, such as:

• Organization charts, reporting relationships, and job descriptions for organization
• Strategy, corporate plan, investment, and budget structures for planning
• Work flow, function, project, process, and system structures for direction
• Financial and statistical accounting, activity and project costing, and quality structures for control
• Financial statements, performance management, and strategic enterprise management structures for reporting

Each structure defines inconsistent and conflicting entities like business unit, department, center, function, activity, project, responsibility, etc. The overlaid structures can produce enormous amounts of information producing business and information complexity. But 20^th century management cannot capture essential business data and report actual financial and non-financial business management information.

20^th century enterprise management does not define the entities that contain cost, value, worth, and return

In order to capture data and report information about an entity, the entity must be defined and recorded. 20^th century management attempts to report cost, value, worth, and return without defining the entities that contain cost, value, worth, and return.

Costs are attributed to some known tangible assets and collected against contrived entities like activity, project, and accounts that were not produced by the costs. Numbers for value are produced by certain contrived methods and formulas to lay value chains over the business, without defining and managing the entity that contains value. Worth is defined by arbitrary depreciation formulas for fixed assets, but ignored for human and other capital. Much high-worth capital is labeled as “intangible assets” and not accounted for or managed. Capital worth is usually mislabeled as “asset value” today. [more...].

Governments are looking for a unifying architecture for best business management and market, financial, and economic management

Governments will be meeting to construct an international response to the financial crisis. They will discuss new best business management practices to solve problems that caused the crisis, and new architectures for the financial system and economic management to prevent future crises. Again, as always in the past, they likely will fail to comprehend and address the unsolvable 20^th century management problems that cause the crisis and will add new practices and architectures on top of existing dead-end 20^th century management structures, and claim to have solved the problem. In order to make real progress, those involved must set current structures aside and take a completely new look at what comprises a business and how businesses relate to industries, markets, financial systems, and economies.

R-pM is the only solution available to eliminate unsolvable problems that caused the crisis

Result-performance Management (R-pM) organizes the actual business as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. 20^th century management structures are replaced by one business structure to eliminate unsolvable problems in unknown capital solution investments in the business, unknown economic output results produced in chains across the business, unknown value of results from the business, unknown costs to produce results, unknown value-added to manage value and quality, unknown returns on capital investments from the added value to results, unknown capital worth in future output and disposal result value-added, and on and on. R-pM captures actual business data to manage all corporations, financial institutions, and other enterprises properly and report on the actual business to regulators.

R-pM is the only unifying architecture to integrate businesses, markets, industries, and financial and economic management to prevent future crises

R-pM builds up from the business structure to provide actual business architectures by industry or economic area or sector to consolidate actual business data. Data can be consolidated by market for business input and output results and capital solution utilization. Industries, such as the financial industry, can be managed for the value and quality of results and the utilization of financial and other capital solutions. [more...].

20^th century management used today cannot manage business risk as part of the business because the business is not organized or managed. 20^th century risk management is separate from the business and concentrates on areas of proven risk, but does not cover the normal risk that is present and should be managed in everything the enterprise does.

Risk is inherent in every business and must be managed as part of the business. But, risk can be managed as part of the business only by using Result-performance Management (R-pM) to organize and manage the actual business.

Risk tends to be managed by a risk management process

Most enterprises say they manage risk. Many have risk management functions or processes to prove it. Risk is managed by risk management structures laid over the business.

There are specialists and companies devoted to risk management. Many books have been written on risk management. But, do they point us in the right direction or tell us what we really should be doing to manage day-to-day risks we face in our businesses?

Risk is an inherent part of the business

We all face the risk that things we want done or to happen will not be done or happen as wanted. [more...]