Abolish excessive Information Technology overheads

IT has become an enormous unmanageable overhead that creates business problems

In most corporations, Information Technology (IT) has grown into a large IT organization and overhead that carries out its own agenda, rather than managing capital to provide the solutions for users to produce results of value.

The following basic problems are inherent in IT today:

• Information systems do not manage the actual business, as one simplified and integrated business system, but manage management structures laid over the business by implementing many complex enterprise systems
• Information systems do not capture actual business data or provide consistent, complete, or accurate business management information
• IT administers diverse capital as technology and prevents proper capital management
• IT administers information as technology preventing proper information capital solutions

So, instead of spending thousands of dollars for the simple information systems needed to manage the actual business, corporations spend millions of dollars administering information technology and monolithic enterprise management systems.

IT systems do not manage the business, but manage structures laid over the business

20^th century management evolved long before IT existed to manage the actual business. Actual business data is produced by the utilization of invested capital as specific capital solutions in performance that incur costs to produce economic outputs as specific business results that create value. It is difficult to capture and manage actual business data on the range of capital solutions and costs and the range of results and value manually, without information technology. So, the enterprise was managed, instead of the business, by laying separately contrived enterprise structures for organization, corporate planning, working methods and processes, accounts, administration, performance management, etc. over the actual business. Capital investments utilized by the business were never identified as specific capital solutions, but were lumped together as tangible or intangible assets. Economic output results produced across the business were never identified as a set to be managed, but were sporadically defined as various separate entities, such as product, order, revenue, etc.

When IT evolved, no one applied IT to manage the actual business or capture actual business data. IT was applied, instead, to convert overlaid enterprise structures to the computer. IT enabled each separate overlaid structure to become more complex, until we have today’s complex business processes and information system structures, like SCM, MRP, ERP, CRM, etc., that hide the actual business and prevent actual business management.

Each overlaid structure describes the enterprise differently creating the information complexity problem

Each overlaid structure contrives its own separate set of duplicating and conflicting information entities that describe the enterprise and not the business (department, section, responsibility, target group, station, center, agency, business unit, etc.). Most of these contrived entities are irrelevant to the actual business, but are recorded by IT systems producing the enormous business and information complexity problems faced by corporations today. Much of the IT expenditure today is not on the processing, needed by users, but is on the systems, hardware, and specialists needed to manage the duplication and complexity of overlaid IT systems and to reconcile the massive irrelevant information maintained. The actual business and actual business data are not managed directly by any 20^th century enterprise information system. Many unsolvable management information problems continue with the lack of business information on actual and complete business costs, business value creation along value chains, business value-added, capital worth (asset value), return on actual capital investments, output result volumes, capital solution utilization, and on and on.

IT administers diverse capital as technology, preventing proper capital management

We have well known problems today in the administration of diverse capital under the label Information Technology. Prior articles discussed the CIO problem. Application system processing and business data is administered as technology, instead of being managed as business capital. The information system hardware, operating software, networks, and other facilities are administered as technology, instead of being managed with other infrastructure as facility capital. Information Technology strategies and planning are separated from management strategy capital, hampering integrated strategic business planning.

IT administers information as technology, preventing proper information capital solutions

Much of today’s data, intelligence, and other information are administered as Information Technology preventing proper information capital management and solution development. Responsibility for information capital is confused between IT and administration, so that information capital is not developed and supported by professionals as separate data, knowledge, records, and intelligence.

We must manage information technology through 21^st century business management

Result-performance Management (R-pM) provides the knowledge and guidance to organize the business for 21^st century management, to eliminate the Information Technology problem, through the following measures:

• Manage the actual business as capital investments in capital solutions of worth utilized in performance to incur costs and to produce value in results. The actual business can be managed by a simple Business Management System to manage one base of actual business data such as performance costs, result value, result value-added, and capital worth. The business is managed through six consistently-defined data entities
• Manage other simplified application programs or redefine applicable enterprise systems as capital solutions integrated with the business process, where needed, to produce a specific result or set of results
• Organize all capital, including that administered as IT today, to be managed by professionals with the specific capability needed as business, human, facility, and management capital
• Reference all information produced in or entering the business, including emails, Internet search results and downloads, and transmitted files to a business entity for inclusion in one integrated Business Information Base.
• Organize information capital separately as business data, human knowledge, facility records, and management intelligence to apply proper support and solution development capabilities
• Develop information solutions to manage business entities like result and capital solution and integrate as information capital to enable users to utilize specific capital solutions to produce specific business results.

21^st century business management simplifies information systems, eliminates duplication and complexity, and abolishes the unneeded 20^th century IT overhead. This eliminates excessive costs and reduces the complete IT problem, so that there is no need for an separate IT organization. There is still need for IT capabilities, but they are placed where than can be effective as part of normal business operations and development. Information Technology is integrated with like capital to be properly managed and utilized as capital solutions to produce the results needed to create strategic value and ensure the success of the enterprise.

Result-performance Management (R-pM) provides the knowledge for actual business management

Result-performance Management (R-pM) is the only source of knowledge and expertise on how to manage the actual business. Forward-looking enterprises are now using R-pM guidance to organize and manage their business to gain breakthrough advantages over competitors burdened by unsolvable 20^th century management problems. Business management is explained and documented in the Business Management Toolkit. The Toolkit provides procedures for actual business management and maintains emerging 21^st century management conventions, definitions, and standards. Management consultants who base 21^st century business management services on R-pM knowledge are licensed to help enterprises learn, organize, and manage the actual business. Business management knowledge and the Business Management Toolkit are available and supported today at result-performance-management.com.

The Solution to the Economic Crisis is explained in free downloads

Three free white papers explain the dead-end 20^th century management problems, such as the failure to plan, account for, and manage the actual business, that caused the economic crisis, the way to eliminate the problems, and a government program to address the crisis by stimulating the economy, solving the problems, building a structure for financial and economic management, and organizing local businesses to flourish in the eventual recovery.

• How to Eliminate Problems that caused the Economic Crisis explains the major unsolvable 20^th century management problems and the solution to eliminate the problems
• Business management; the only Solution to the Economic Crisis explains how to plan and manage the business to capture business data and provide management the information needed for actual business, corporation, industry, and economic management
• A Government Business Management Program to Answer the Economic Crisis outlines a government program to encourage business management, stimulate the economy, restore confidence, organize businesses to flourish in the recovery, and manage economic cycles to prevent future crisis

These three white paper downloads are available to R-pM Community Members at result-performance-management.com. There is no cost or obligation to join the R-pM Community. Join by entering your email address and personal password. Your email address is protected and used only for download problems, product updates, and occasional R-pM Member news and white papers.