Business management comes from Business Organization and Management Systems Experience

Business management was developed over many business change projects to eliminate enterprise management problems

We get contacts and inquiries wanting to know how Result-performance Management (R-pM) knowledge evolved and wanting assurances of the authenticity of 21^st century business management as the only way to learn, organize, and manage the actual enterprise business. In describing actual business management, we have encountered significant resistance to change. But, now business management is gaining more interest as the only possible solution to the problems that cause large business losses and the economic crisis. The economic crisis shows the folly of today’s 20^th century enterprise management for anyone willing to open their mind and think.

Business management is the outgrowth of over 30 years experience as a management consultant, primarily in business organization and management to apply information technology. On every project I had to work around unsolvable problems like reorganizations, alignment of solutions, intangible assets, unknown costs and value, investment planning through guesses at benefits, project management obstacles, inability to measure return on investments, unknown capital and business worth, mixing capital solutions and results together in business performance and process management, lack of definition and knowledge of business commonalities to apply services and solutions, lack of a business framework to scope and manage improvements, and on and on. These same problems still face every manager and management consultant today.

Results were first defined as economic outputs produced by information systems

Results were first defined, while designing computer systems in the late 1960s. At that time, information systems were custom designed working back from the required system outputs to determine the needed inputs. I felt the objective of new systems must be to improve the business, not just convert the manual process. In order to add value to the business, the analysis had to include the full man-machine system starting with the required business outputs and working back to the business inputs. These business inputs and outputs are called results in business management.

Good business systems improved specific results to return the investment and developed specific solutions to manage costs

Enterprises do not organize or manage based on results, so each system required the separate identification and analysis of results. A good man-machine system must design the use of business, system, assets, human, and management capital in performance to produce specific output results. One system design tool showed the full business system as a matrix of the results to be produced, and the system, process, human, and other capital solutions needed for performance to produce specific business results. This is a structure of the business to be supported by the system. From then on, I always studied the business in terms of output results to be produced and capital solutions needed to be utilized in performance to produce results.

It was difficult to measure the cost and benefits of the business system investment. The benefits were in improvements and value added to results, but only a few results were managed, as separate entities like products and sales. Costs were lumped as computer equipment, software, and other project costs. Costs were needed by the specific solutions developed and utilized to be charged to result value. Most tangible capital was administered by a function that resisted measuring and managing capital in utilization. The IT Department was only interested making their hardware and software available. Gaining benefit from applications was “up to the users”. So there was no way to get the cost of performance to relate to the value of results, and determine return on investment.

Performance solutions were never managed properly as capital by those with the capability

Another problem was that enterprises made large investments in capital, but never defined the capital as specific solutions to be managed for good utilization or to measure the return on investment. The defined capital, such as fixed assets, was under administration and not managed, and much high-worth capital was labeled as “intangible assets”. Advanced solutions and information capital required organization of special units to provide user solutions and support.

Over the years, as users took over more processing, it became imperative that system processing be integrated into the business process, and managed as business capital, while computer and networks operation should be integrated as facility capital with communications. But, IT wants to keep development and application processing separate from the business and together with IT strategy, information processing, and equipment operation to be managed as “technology” rather than as capital. This mixture of diverse capital under the heading “Information Technology” has produced many well-known problems, such as business change held up in IT backlogs and the CIO problem.

Organization studies concentrated on politics and organizing people, rather than organizing the business

The same problem arose in organization studies, where it became important to organize the business by the strategic results to be produced, and then give business units and people roles and responsibilities to operate the business to produce specific results. The business organization must be a professionally-managed business capital solution, rather than an arbitrary structure. Generally, management resisted defining strategic results and organizing the actual business, and focused on politics and organizing units and people by commonly-used functions and titles.

Business Process Re-engineering laid a monolithic business process over the business

By the the 1990’s, I had developed my own technique to analyze the business as a result chain and to analyze the information system. business processing, human capabilities, and other capital needed to produce each result. When Business Process Re-engineering became the fad, my business analysis methods were criticized as not BPR. But I saw that the only way to make sense of a “process” was to define it as a result chain to understand value created and actual performance costs. Activity-based Costing (ABC) came along to contrive a number called a cost and charge it to a contrived activity structure that is laid over the business. To me this is nonsense that does not solve basic problems in unknown investment amounts, unknown solution worth and declines, and intangible assets giving unknown costs. Costs are incurred by utilizing specifically-identified capital solutions in performance and can only be charged against the value created in the result produced to manage value-added across the result chain. BPR and ABC required big investments for little gain, which convinced me of the superiority actual business management and the need to do something.

The actual business organization comes from simple analysis

One problem is the lack of precise and widely-accepted definition of the business. Managers have no concept of what constitutes the actual business. Simple analysis shows that business consists of three components; 1) specific results required for business success as one integral set of economic outputs covering the complete business, and 2) the capital invested in the business as one integral set of specific solutions needed to produce specific results, and 3) performance domains where a specific solution is implemented to produce a specific result, with any rules and exceptions. All management decisions boil down to results to produce and capital solutions to use. The business is defined precisely as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”.

It became clear that persistent business problems arose from the failure to organize and manage the business

It was clear to me that the conventional 20^th century structures used to organize and manage the enterprise created many persistent and unsolvable problems. 20^th century management always has been a dead-end. Problems are unsolvable because they can never be solved by laying more structures over the business as continues to be the practice today. Management consultants and business change professionals contrive new structures to work around the problems with old structures.

The main problem is the failure to organize the business. Contrived organization structures laid over the business hide actual business operations, and prevent organizing and managing the business as one structure to integrate business organization, planning, direction, control, and reporting.

Business management concepts have been proven in many projects

These concepts of business organization and management were employed successfully in many management consulting projects both to acquire, develop, or implement specific solutions that increased the value of specific business results and to manage projects as a business by managing project capital to implement new business capital solutions as project results. The significant benefits to both the business and the project were obvious to me.

This led to the conclusion that the only right away to manage the enterprise was to organize and manage the business to utilize capital investments as solutions in performance to produce value in results. All enterprise organization and management must be based on one current business structure and one strategic business structure to plan future results and the capital solutions needed. Capital must be organized based on the human capabilities required to develop and support the capital and provide solutions. One consistent set of 21^st century business management conventions, definitions, and standards is needed to facilitate business education and learning, business collaboration, outsourcing, packaged capital solutions, and business and management services that can be applied to any business.

I decided to put my ideas for organizing the business and eliminating unsolvable problems into practice after retiring from active management consulting. My colleagues and I organized Result-performance Management Limited and started the formal development of Result-performance Management in 2002. Now, after years of investment and work, R-pM as is available to provide the knowledge to organize and manage and business. R-pM knowledge development and improvement will continue as long as business continues.

Result-performance Management knowledge been developed to organize the business for 21^st century business management

The knowledge to define, organize, and manage the business is available today as Result-performance Management (R-pM). Business management can be implemented on any general ledger system with relationship capabilities or relational database management system. Business management is implemented by learning the actual business. A business structure is defined for part of the business and then expanded as the rest of the business is learned. Once the business is learned and organized, business units and human capital are deployed to be responsible for specific results and actual business data is collected and utilized. Existing structures, workloads, and problems are removed when the functionality is provided routinely by business management. The current and strategic business structures then are used for all organization, planning, direction, control, reporting, and corporate governance.

The intention is to make business management available at a nominal cost so that all enterprises around the world can take advantage and gain benefit.  Business management is supported by The Business Management Toolkit, which includes free updates as 21^st century business management methods and conventions evolve.  Result-performance Management.com provides the details and downloads required. Now is the time to use business management to cut costs and maximize revenues, when capital is underutilized, the need is great, and the problems are fresh.

The Only 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 and manage actual business performance, that caused the economic crisis, the way 21^st century business management 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 business management solution to eliminate the problems
• The Only Solution to the Economic Crisis; Manage the Business 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 and password. Your email address is protected and used only for download problems and occasional R-pM Member news and white papers.