Information capital today does not provide solutions to produce business results and to integrate business information
Enterprises are not able to properly develop, support, integrate, and apply information capital today. A wide variety of data is captured against organization, account, activity, process, performance management, and other structures laid over the business. But, since the business is not managed, actual business data is not captured. Mountains of reports can be produced against the overlaid structures, but management receives no consistent or complete information on the actual business.
Enterprises have much to gain by properly organizing and leveraging information to provide value. Information is not managed properly for support and utilization in today’s enterprise due to several major problems:
- Each management structure and information system laid over the business defines and describes the enterprise with its own set of data entities and entity definitions
- The business is not organized and managed to capture information produced directly by the business and to apply information directly to the business
- There is no specific organization set up to properly support each category of information capital and provide information solutions to produce results
- There are no integrating business data entities to integrate information from the various systems into an business information base for management information and effective collaboration
- Much essential financial and statistical business data on result value and quality, capital worth and utilization, and performance cost and effectiveness is never captured or reported
- Many potential information solutions for operations and management that can help produce high value-quality results are never provided
The enterprise today works around the information complexity problem and suffers from the lack of complete, consistent, and accurate information that can be solved only by eliminating these problems.
Business management manages and utilizes information capital as an integrated Business Information Base
The answer is to organize and manage the actual business, to organize information to be managed professionally as business data, human knowledge, facility records, and management intelligence and to integrate information capital by specific business entities to be delivered as information solutions to produce results. Business management focuses information technology utilization on actual business details and eliminates excessive information technology utilization for structures laid over the business.
Information capital is supported by professionals with the proper capabilities
The fact is that different kinds of information require different professional capabilities to manage and support. Much of our traditional information handling is based on this. Data is managed different from accounting records and knowledge. Problems arise when the wrong capabilities are applied, such as having accountants provide management intelligence. From the management perspective, we have four types of information that must be managed separately: data, knowledge, records, and intelligence.
Each type of data requires the proper capabilities to capture, create, and maintain information, and to provide information solutions, The capabilities are provided through four capital result units:
- Business Data Unit: to manage and support business data entities and solutions and to integrate or provide access to knowledge, records, and intelligence
- Human Knowledge Unit: Manage and support the development and provision of knowledge solutions to enable human capital to utilize solutions and produce results
- Facility Records Unit: Manage and support financial and non-financial records from planned and actual business transactions and provide record solutions on business status for management and governance
- Management Intelligence Unit: Capture external intelligence and derive intelligence from data, knowledge, and records for management information beyond the business status
Data requires business understanding and analytical ability, knowledge requires human development and education skills, records require administrative ability, and intelligence requires research and management analysis ability.
Information must be captured directly from the business and applied directly to the business
Conventional information systems do not capture data directly on the specific economic output results produced by the business and the specific invested capital utilized to incur costs and create the value in the results.
By now, you should be familiar with business management to directly organize and manage the business, which is generally defined today as “the activity of providing goods and services”. The business of any enterprise is made up of three components:
- Results: The economic outputs produced by the business. Subsidiary information is maintained on individually-managed results like products, services, material, orders, revenue, etc
- Capital solutions: The invested capital utilized by the business to produce results. Subsidiary information is maintained on individually-managed solutions like employees, supplies, equipment, cash, etc
- Performance domains: The utilization of specific capital solutions in business activity to provide specific goods, services, and other results. A performance domain is defined by a result produced and a capital solution utilized
The business is organized as enterprise business structures. Within the enterprise business structure, information is integrated by result and capital solution. Performance domains maintain data and generate transactions on planned and actual business performance. Transactions are generated each time a volume of full or partial results is produced by the business. Transactions update performance domain totals, result totals, capital solution totals, related data entities, and facility records. Related entities provide details on the attributes of certain results and capital solutions. The only other data entities used to manage the business are business descriptors such as industry, region, segment, product group, etc for data entity attributes; time periods used to plan and manage results; and enterprise such as subsidiaries and projects, supplier for input results and acquired solutions, solution provider for external or outsourced solutions, and customers for final results. Other entities may be maintained for data and other information of interest to the business.
Information is integrated in an Business Information Base to produce results and to support management
Today’s information systems are laid over the business and support other overlaid structures for organization, strategic planning, business processes, accounting, performance management, management reporting, etc. Each system defines its own set of data capture and reporting entities like division, objective, process, object, activity, etc. This leads to the business and information complexity problem and requires additional overlaid systems to reconcile, integrate, and drill down various information entities to provide management information. These additional investments have never been able to solve the problems.
Business management integrates information by business data entity for utilization in a seamless Business Information Base. All information is related to and referenced from the proper business data entity, so that it is provided when and where needed. Access to the Business Information Base is controlled as a business data management result. The Business Information Base is supported by professionals and is utilized to add value to results and to provide transparent management information. Business management requires reference from business data entities for all information in any media related to the business entering, within, or leaving the enterprise, including image, video, emails, Internet postings and downloads, file transmissions, and off-line documents.
The Business Information Base employs existing information technology in general ledger systems, existing applications systems, and relational database capabilities. The Business Information Base is built gradually as the actual business is learned and organized and then refined and improved as the business is managed.
Result-performance Management (R-pM) provides the knowledge and procedures for actual business management and reporting
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 20th 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 21st century management conventions, definitions, and standards. Management consultants who base 21st 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 20th 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 20th 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.
