Eliminate Information Complexity by Managing and Reporting the Business

20^th century management collects data on structures laid over the business

20^th century management used to manage the enterprise today lays organization and management structures over thee business, instead of organizing the business for 21^st Century Management. Each overlaid structure defines a different set of data elements to capture and information entities to report against. The many structures do not define the business or capture actual business data. The structures like organization charts, corporate plans, account charts, and scorecards have become generally-accepted as normal business practice and are never questioned. As more processes, information systems, financial models, and other structures are laid over the business, the problems of business and information complexity grow. 20^th century management stresses providing quantities of management information, not providing quality management information.

Conflicting entities and definitions are used for enterprise management information

Modern information technology can maintain information on a wide variety of overlaid structures and information entities. Information entities are the subjects or topics for which we keep records or information. They could include the corporation, department, product, employee, employer, customer, manager, supplier, responsibility center, line item, division, program, component, supervisor, solution provider, person responsible, inventory item, subsidiary, returned goods, company, unit, contact, partner, section, project, staff member, etc.

Various information systems, functions, processes, industry areas, and technologies have their own entities or use different names to describe the same entities. The examples above are different names for three information entities: organization unit solution, product result, and human capital solution. The structures used often conflict and leave gaps in information reported. The likelihood of information complexity grows with the number of information entities managed. Information complexity hampers or prevents integrated management information, business collaboration, integrated data and communications, etc.

How many different information entities are used to manage your enterprise? Does each information system or business process define its own set of entities? Do your various functions and technologies use their own terminology for what are, in essence, the same entities? Do you have entities that are part of a larger set that are managed as individual entities without managing their commonalities as a set? Do your information systems capture actual business data or report actual business management information?

The modern enterprise reports mountains of management information, but no information on the actual business

Modern information technology and extensive workloads are used to capture data and process information on the many structures laid over the business, creating the information complexity problem. The problems is compounded in attempts at business collaboration and integration with other enterprises that involve more diverse information systems. Corporations have a problem capturing consistent information from the various systems used by divisions and subsidiaries.

Many methods have been developed to work around the problems with executive information, data reconciliation, cross referencing, drill downs, etc. Until now, no one has solved the real problem to organize and manage any business with the minimum common sets of precisely-defined entities.

Even with all this abundance and complexity of information one fundamental problem remains: No data is captured on the actual entities that comprise the business or on actual operation of the business. No actual business management information is reported. This is a major problem that hampers 20^th century management. But it also provides the solution for 21^st Century Management.

R-pM defines any enterprise business through six information sets

R-pM has been developed to employ the power of information technology to organize the business for 21^st century management. R-pM simplifies the business management problem down to managing the actual business directly. R-pM stresses the quality of management information to provide one consistent, complete, and accurate set of actual business management information. Structures laid over the business are discontinued with the workloads and information systems required and the unsolvable problems caused by conflicts with the actual business.

The actual business is “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. R-pM organizes the three components of the business as data and information sets:

• Results: To record all business inputs and outputs as one set of identified results. Results include common information entities like component, material item, product, service, order, revenue, completed work, and other business results that are not recorded or managed today. Result metrics manage business volumes, value, total performance costs, value-added, quality, risks, symptoms, and goals, as one set
• Capital solutions: To record all capital investments utilized to produce results as specific capital solutions in one set of solutions available to the business. Capital solutions include common information entities like employee, fixed asset, cash, information system, supplies, knowledge, and other solutions that are not recorded or are considered as “intangible assets”. Capital solutions of positive capital worth are assets and solutions of negative capital worth are liabilities. Capital solution measures manage capacity, investment, qualifications, reliability, investment returns, capital worth, return on investments, cause of performance problems, solutions to performance problems, and business potential as another set
• Performance domains: Capital solutions are implemented in a performance domain to produce specific results. The utilization of a solution in a domain to produce a volume of full or partial results generates business transactions to record the business. Performance indicators manage capacity utilization, costs, effectiveness, uncertainty, contribution to value-added, performance problems, and performance expectations as one set.

Results control existing information and subsidiary files on results such as orders, material received, products produced, payments received, and other business outputs. Capital solutions control existing information and subsidiary files on capital solutions such as fixed assets, employees, supplies, systems, knowledge, and other solutions. Results and capital solutions and subsidiary files are used to organize and manage the business. An enterprise business structure relates results and capital solutions into performance domains for a utilization in the business.

A strategic business structure plans the business in strategic results, capital solutions needed to produce strategic results, and result goals and performance expectations by time period to the strategic horizon.

R-pM organizes three other data entities for information sets to manage interactions with the business and business change over time.

• Enterprises: The enterprise business may have subordinate enterprises or superior enterprises. A project or campaign within an enterprise is managed as a subordinate business with its own business structure. Enterprises include supplier enterprises that provide final results from their business structure as enterprise input results, customers that use enterprise final results as their input results, business partners that produce certain results in the enterprise result chain, and solution providers that provide performance solutions that help produce enterprise results
• Time Periods: Time periods are defined to manage results produced and solutions utilized over time. Time periods can be normal continuous periods, periods managed to a strategic horizon, the period to a milestone date, specially defined period for a specific result, etc. Result goals and performance expectations can be related to time periods
• Business Descriptors: Information entities that are attributes of results and capital solutions, enterprises, or the business as a whole such as; product group, market, region, customer segment, or any other entity of interest to the business

These six data entities and information sets are all that is required to capture data on the actual business that is not captured today and to report actual business management information that is not reported today. All information capital in business data, human knowledge solutions to utilize other solutions to produce results, facility record solutions to inform management on business status, and management intelligence solutions to provide analysis of data and records and the external environment are referenced by one or more of the data entities. Managing data entities and information as six sets allows the commonalities of the entities and relationships between entities in the set to be managed consistently. The entities are standardized for specific identification and common definitions across collaborating enterprises and to consolidate corporate business management information. Consistent business management information can be consolidated by governments to manage industries, markets, financial utilization, and economic sectors to prevent the problems that caused the current economic crisis.

R-pM employs simplified information technology to manage the business

R-pM is designed for the eventual use of a Result-performance Management System for integrated enterprise organization and management. In the meantime, R-pM entities can be set up in a flexible general ledger or relational database management information system. When R-pM is in operation results, capital solutions, performance domains, enterprises, time periods and business descriptors can be added or updated quickly to reflect actual business organization and management.

Visit Result-performance-Management.com to learn more about organizing your business with R-pM for 21^st Century Management, and the R-pM Toolkit, your 21^st Century Management Manual.

The R-pM 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 information complexity and the lack of needed management information, that caused the economic crisis, the way R-pM eliminates the problems, and a government program to address the crisis by stimulating the economy, solving the problems, building an architecture 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 R-pM solution to eliminate the problems
• The Only Solution to the Economic Crisis explains how R-pM manages 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 and password. Your email address is protected and used only for download problems and occasional R-pM Member news and white papers.