Business Process Management builds monolithic business processes
Business process management is a popular method of managing enterprise operations. Business processes do not process the actual business. Business processes are contrived structures that are laid over the business. The business process mixes business, human, facility, and management capital together in a monolithic business process that follows a contrived work flow to produce a final output.
Business processes mix results together with performance
Business process management does not distinguish results as results and performance as performance. Both economic output results and the performance that produces the result are defined as “performance”. Business processes manage “performance quality”. But, quality is an attribute of the result produced, not the performance utilized. Results are mixed with performance in the monolithic process, preventing the process from actually defining, processing, or managing the business.
The problems with 20th century business processes are described in the article “Business Process Management that prevents Value-quality Chains”.
Separate results from performance to manage the actual business
The actual business is the utilization of capital in performance solutions to produce value in results. Results must be separated from performance in order to organize and manage the business. Results define the output volumes produced, the quality produced, and the value created. Results must be identified and analyzed to define and produce only the specific economic outputs that are essential for business success. Low-value results are discontinued.
Performance is the utilization of capital to produce a specific result. Capital must be defined as specific performance solutions utilized to produce the high-value result. Performance solutions define the capacity available to produce a volume of results, the effectiveness in producing result quality, and the cost of creating result value.
Define result relationships to relate results and link result chains
The work interrelationships in a business are not defined by contrived processes or work flows. They are defined by the natural relationships between those results that must be produced for a successful business. The real business process is not a business process, but a chain of results that must be produced. Every result must be produced in order that another result can be produced, leading to the final result that goes to a customer. These result relationships are defined to organize the business. Results that directly produce a final result define a result chain. Each result in the chain is part of a set of results that comprise the final result that goes to the customer.
An explanation of result value chains is provided in the article “Manage Results as a Value Chain“.
Define the performance that produces each result
20th century business process management looks at the business as one big problem to design the performance to produce a final output result.
Defining the process as a result chain reduces one big problem to a series of small problems; to design the performance to produce each result. The business process is the actual business and information system processing needed to produce a specific result. A continuing process solution may be defined to provide the process to produce each result along a chain for the final set-result. Other performance solutions needed are defined result by result. Some solutions are deployed to be utilized for a specific result and others may be deployed to the final set-result to be utilized for each result in the chain. Consistently managing performance producing each result provides business flexibility and enables business collaboration.
Manage result value-quality chains
Result value-quality chains define the actual business.
Input results from suppliers have a value defined by the enterprise willingness to pay. Final results have a value defined by the customer willingness to pay. Each internal result in the chain has a value determined by the internal customer willingness to pay. The value of input results plus internal results cannot exceed the value of the final result. The performance cost of producing each internal result cannot exceed the value of the result. If it does, the result must be discontinued. If the result is deemed essential, the performance costs must be reduced or the value must be increased and the value of another result in the chain decreased.
Each performance solution must be effective to produce a quality result. A low-quality result is caused by a low-quality input result or an ineffective performance solution. If the input result is low-quality, the chain is followed back to find the defective result. The known solutions producing the defective result are assessed to identify the ineffective solution and correct the problem.
Management of result value-quality chains is management of the actual business
Monolithic business processes and other overlaid structures hide the actual business and create unsolvable 20th century problems. Large complex information systems are laid over the business to process the many artificial data elements and information entities defined by overlaid structures. This produces the wasteful IT overhead and business and information complexity of 20th century management.
Result value-quality chains reduce the problem to the actual business. Business processes and information systems are employed to work with other performance solutions to produce a specific result or chain of results. Results and the performance utilized are defined across the complete business to reduce business management to five specific consistently-defined entities, to manage the value and quality of results. The result value-added is managed for each result in the chain to directly produce the profit result.
Use Result-performance Management (R-pM) to build result value-quality chains
Result-performance Management (R-pM) organizes the business for 21st Century Management. R-pM redefines monolithic business processes to be result value-quality chains. High value results can continue to be produced by existing information systems until efficient result-specific processing is implemented. Results and performance are managed by a Result-performance Management System that employs a general ledger or generic information management system, until specific Result-performance Management System packages are available.
If your enterprise has problems with its business processes, or if you are a business change consultant, consider R-pM before making any process changes. The download “How to Build Value-quality Chains” available now at Result-performance-Management.com, explains how to use R-pM to build result value-quality chains.
Actual organization and management of the business and result value-quality chains is supported by The R-pM Toolkit, your 21st Century Management Manual, now available to R-pM Community Members at Result-performance-Management.com.
