Archive for the 'Outsourcing Management' topic

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...].

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...]

Business collaboration is a 20^th century management problem

Business collaboration and outsourcing is recognized as a major problem today. Businesses cannot collaborate if the actual business of each partner is not organized or managed. There is need to organize the business of each partner, to integrate suppliers and customers with the enterprise business, to integrate business partners and outsource providers in value chains, and to consolidate business operations. There is a need to know the specific business requirements of customers. There is a need to know the costs incurred and value created by partners in a value chain.

Business collaboration solutions require expensive IT investments

The solutions proposed for 20^th century business collaboration involve heavy investments in common information technology to capture and report consistent information across partners, or to reconcile and recast inconsistent data maintained by partners. Often another structure is laid over the business for activities to capture known costs or contrived “value chains’ to estimate values. Even with these investments, no method has been found for real flexible and accurate business collaboration, since the business is not organized or managed.

Rule No. 9 of 21^st century business management: Collaborate to maximize shared value and minimize shared costs

Business collaboration and integration is an important requirement of 21^st century business management. [more...].

Rule no. 2 of 21^st century business management: Generate profits from a chain of managed value and quality

21^st century business management manages economic outputs from the business as results, manages investments in the business as specific capital solutions, and separately manages performance in the utilization of specific capital solutions to produce specific results. Separating results and capital from performance enables the enterprise business “the activity of providing goods and services” to be managed directly.

Goods and services are final results that go to the customer and have value in the customer willingness to pay and must be of the quality to satisfy the customer. The final goods and services results are produced by a chain of results of value starting from input results from the supplier. Business activity is the utilization of human and other capital in performance to produce a given result. So the business in “the activity of providing goods and services” must be managed by managing the performance producing each result of managed value and quality in a chain of results from supplier input results, through internal result transformation, to the final customer results. The result value-added in excess of performance costs across the chain contributes to the profit result.

20^th century management manages performance across processes and information systems

20^th century enterprise management, used by all enterprises today, does not recognize or manage output results from the business as a business entity. Results or accomplishments are managed as a component of “performance” along with the business activity in utilizing capital in performance to produce the result. [more...].

There are many confusing uses of the term outsourcing

What is outsourcing? The top search engine entries say taking internal functions and paying an outside firm to handle them, and migration of service to an external provider. The definitions generally make it sound like when the enterprise out-sources a function or service, it is completely separate, and the enterprise no longer has responsibility. We hear of many problems with outsourcing, particularly the alignment of outsourced business processes, information system application services, back office processing, and other performance solutions with enterprise operations.

21^st Century Management provides the structure for managing outsourcing and outsourced solution alignment

Result-performance Management (R-pM) organizes the business for 21^st century management. R-pM handles outsourced solutions like business processes, application systems, and back office processing as a part of the enterprise result-performance business structure.

The R-pM definition of outsourcing is having another enterprise or outsourced solution provider provide one or more performance solutions in the enterprise performance structure to transform an input result from the enterprise result structure into an output result that is also in the result structure. All outsourced and internal solutions are aligned with enterprise results in the result structure.

All results are under result management responsibility and all performance solutions, including those outsourced, are under performance management responsibility. This provides the structure to manage and align outsourced solutions through Result-performance Management.< [more...]>

Conventional enterprises develop arbitrary organization structures that are overlaid on their businesses. Then, the enterprises overlay structures on the organization for strategy development, planning and budgeting, performance management, business processes, costing, quality management, management reporting, accounting, corporate governance compliance, etc. Each of these methods uses its own set of entities and definitions, which must be interfaced with the entities and definitions used by other methods. These overlays complicate the business and prevent transparent management of the business.

There is a big need for one method that replaces all the methods that management now uses, and provides a simple and clear definition to organize and manage the business.

Result-performance Management (R-pM) organizes the business for 21^st Century Management

Result-performance Management (R-pM) is now launched to provide one simple integrated management method. R-pM organizes the actual business results produced and performance solutions utilized. R-pM standardizes the definitions of five basic entities to manage the business directly, as summarized in the R-pM community download “R-pM Explained”.

The corporation overlays organization structures, strategic plans, chart of accounts, performance management reports, and other methods on the business

We see the problem every day, when we cannot relate what we are doing directly to our strategy, our information reporting to organizational responsibilities, our money and costs to what our money and costs are producing, our symptoms of poor performance to the actual poor performance, the cost of improvement to the benefit of the improvement, etc. We see the unsolvable alignment problems between our systems and the business, outsourced solutions and internal solutions, capital development and operations, etc. [more...]

In an article on 18 January 2006, we discussed managing the impact of competition and collaboration from around the world. We said that the Internet has had major impact on how we conduct business.

Corporations and companies worldwide must organize the business to be more flexible to take advantages of the opportunities and to meet the competition from the Internet. The Internet opens opportunities for business information and collaboration. Enterprise need a method to standardize output results and performance costs to simplify the business and enable collaboration. The answer is Result-performance Management (R-pM) which organizes the business for flexibility and collaboration, and explained in R-pM community downloads like “R-pM Applications to Improve your Enterprise Today”

R-pM organizes Corporations for Internet impact to gain competitive advantage through opportunities and to thwart competitive threats

Customers, collaborators, and competition can come from anywhere in the world. With the Internet, we must deal with enterprises around the world with differing organizations, standards, and ideas on how business is done. We must be able to anticipate and react quickly to change. We must be able to produce products to meet precise customer needs. Those of us in this situation, have problems leveraging the Internet and handling threats from the Internet. [more...]

People refer to outsourcing in many contexts. Many say outsourcing when they mean off shoring operations to another country.

There are many confusing uses of the term outsourcing

What is outsourcing? The top search engine entries say taking internal functions and paying an outside firm to handle them, and migration of service to an external provider. The definitions generally make it sound like when the enterprise outsources a function or service, it is completely separate, and the enterprise no longer has responsibility. We hear of many problems with outsourcing, particularly the alignment of outsourced business processes, information system application services, back office processing, and other performance solutions.

Result-performance Management (R-pM) provides the structure for outsourcing and outsourced service alignment

The R-pM definition of outsourcing is having another enterprise or outsourced solution provider provide one or more performance solutions in the enterprise performance structure transform an input result from the enterprise result structure into an output result that goes into the result structure. All results are under result management responsibility and all performance solutions, including those outsourced, are under performance management responsibility. This provides the structure to manage and align outsourced solutions through Result-performance Management. Visit the R-pM website for R-pm community downloads that explain Result-performance Management.

Outsourcing uses another enterprise performance solutions to transform enterprise results

Some enterprises have others execute their functions rather than doing it themselves. [more...]

The 20^th century enterprise has no structure for solution alignment

In an article on 8 May 2006, we asked Why have we never solved the alignment problem?, we discussed problems aligning strategy with operations, enterprise application architecture and information systems with the business processes, the organization with business operations, customer needs with product and service development, outsourced services with internal operations, tangible assets with intangible assets, etc. Despite all the books and methods contrived, the alignment problem remains unsolved.

The R-pM result-performance structure aligns solutions with results

Conventional methods align performance with performance and solutions with solutions. This is futile! We can only align performance solutions against their input and output results, to align solutions producing the same result. The secret to alignment is Result-performance Management (R-pM), to organize the business through results produced by the business and aligning performance solutions with the results produced. Review the R-pM downloads including “Organize your Business with R-pM” to solve your alignment problems.

We need something fixed in place to align our performance and solutions against

We said that we need something fixed in place to align our organization, strategy, business, information systems, customer relationship methods, outsourced services, tangible and intangible assets, and internal operating methods against. Once all of these things are aligned against something fixed in place then they are aligned with each other. Every enterprise has what is needed for alignment, but it has never been defined or managed. [more...].

How many books have been written without solving the alignment problem?

We keep hearing about problems with solution alignment. Books are written and methods proposed for aligning strategy with operations, information systems with the business, customer needs with product and service development, outsourced services with internal operations, tangible assets and intangible assets, etc. Despite all this, the alignment problem remains. Every time that I have looked into an alignment solution, I found a bunch of contrived rules or guidelines to alleviate the symptoms of misalignment rather than something to align against that is fixed and related to solutions.

We cannot align performance solutions with performance solutions

The problem will never be solved as long as we keep trying to align performance with performance and solutions with solutions. We need something that is fixed in place to align strategies, solutions, operations, outsourced services, tangible and tangible assets, information systems, etc. against. Once all of these solutions are aligned against something fixed in place then they are aligned with each other.

Result-performance Management (R-pM) shows how to align solutions with input and output results

Now there is Result-performance Management (R-pM), which shows how to solve the alignment problem by aligning solutions with results. [more...]>