Use Information Systems to Process the Business

20^th century management lays organization and management structures over the business, and does not organize and manage the business. Information systems capture extensive data and report information on each structure. This produces information complexity and requires a large IT infrastructure. But, since the business is not organized, information systems do not capture actual business data or report actual business management information. Why don’t we use information systems to process the actual business?

20^th century information systems process structures laid over the business

20^th century management manages the enterprise by laying enterprise organization, strategy, process, account, performance management, administration, and other structures over the business. The business is not organized so the business cannot be managed. The enterprise is managed by laying information systems over the business to capture data and report on each structure laid over the business.

20^th century information systems are large monolithic structures that are implemented over the business and conflict with the actual business. The many enterprise information systems capture data and report information on the wide variety of entity names used to describe each structure, such as organization unit, station, responsibility center, cost center, department, functional area, etc. The information provided to management often conflict and does not accurately portray the actual business. Information systems are unable to capture data on actual performance costs, performance capacity, solution utilization, performance effectiveness, performance against expectations, total result costs, result volumes, result value, result value-added, result quality, result risks, results against goals, etc within one cohesive consistently-defined business structure.

21^st century information systems provide business solutions to produce results and report actual business performance and results

21^st Century Management gains control of Information Technology (IT) and properly applies IT to the business. IT provides two solutions in 21^st Century Management:

• Business process solutions to integrate system processing with the business to produce a result
• One integrated business result-performance management information solution to capture actual business data and report accurate business management information

This properly directs the information system problem to the actual business to utilize information systems as performance solutions to produce results. Information systems must be designed to produce the results required by the business, rather than being implemented over the business and forcing the business to produce the results supported by the system.

21^st Century information system processing is integrated with business processing to produce results, result by result

There has long been a problem of integrating information and business processing. The approach used today to get around the problem is to have the information system dictate the business process to produce those results that happen to be produced by the information system.

21^st Century Management begins with the logical structure of economic-output results that must be produced for a successful business. Results form natural value-quality chains. Each result in the chain incurs a cost and has a value that contributes to the final result from the chain. Many different performance solutions are used to produce each result. Each performance solution adds a cost to the result cost, must have the capacity to produce the volume of results, must be effective to produce a quality result, etc. One performance solution is the information system that processes the result and maintains business data that describes the result.

The business need is not for a monolithic business process and monolithic information system to provide performance to reach one managed final result, but for one integrated business and system process to produce each result needed, result by result.

21^st century information systems will provide a series of business-system process modules to produce and maintain data for specific results that are needed by the business. Each module will capture data on the value-quality of the result and the cost-effectiveness of all solutions utilized to produce the result. The module can be personal-computer based, linked together as an enterprise system, internet site processing, specialized systems required for a result, etc. Each module will update one Result-performance Management System for recording and reporting business data.

21^st Century Management information is produced by one integrated business management system

21^st Century Management is supported by a Result-performance Management System to capture data against the business structure for each result produced and performance solution utilized. Instead of many conflicting sources of information, there is one accurate source of data capture and management information reporting on the actual business.

The Result-performance Management System simplifies business management information to five consistently-defined sets:

1. Results: Outputs of value organized into result structures and value-quality chains
2. Performance Solutions: Specific qualified capital deployed to produce specific results
3. Capital: Revenue capital worth from revenue results, performance capital worth assessed from result value added, and investment capital worth from results in development
4. Enterprises: The business enterprise with superior and subordinate units, plus suppliers,, customers, business partners, solution providers, and others that interact with the business
5. Time Periods: Specific historic and planned future periods with result goals and performance expectations to create strategic value or develop new performance solutions and results

Subsidiary entities are kept on certain results, such as material and products, and certain performance solutions, such as assets and employees. Result-performance transactions record business data against the information sets. Most data can be set up and captured automatically, to simplify data collection. Entities such as division, responsibility, unit, region, product group, etc. are attributes of results and solutions and are defined by those specific results and solutions.

21^st century information systems process and report actual performance solutions utilized to produce actual business results. So, management information is accurate, simplified, and focused.

Rationalizing Information Technology with the actual business will happen over time

Every modern enterprise is saddled with a large and costly IT empire, which has grown to focus on its own agenda over the company business. The many information systems produce information complexity and require the expensive IT overhead to operate. This is not the fault of IT. This is a result of never organizing and managing the business.

The starting point is to understand that there is a problem. Then define the enterprise business, as it should be, in terms of specific results and performance solutions. Do not simply identify current results produced. A team should analyze the business to identify essential high-value results that must be produced to improve the business. Once this is done, rationalize existing systems to streamline result chains, eliminate unneeded processing, and integrate needed informal processing.

Set up results and performance solutions as accounts in the general ledger or another information processing system. Begin to rationalize the account structure with the business structure and to capture actual business data. Begin to valuate results and assess capital worth.

Analyze existing processing and needs result by result across the business. Assess existing systems and processing to identify those now irrelevant to the business or providing inaccurate information. Discontinue those systems or processing. Evaluate all new IT initiatives in light of the actual business needs.

Plan the transition to integrated capital management of business and information system processing, integrated facility equipment management for the enterprise infrastructure, and information capital management as data, knowledge, records, and intelligence and integration to produce results.

Eventually the enterprise will arrive at 21^st Century Management with 21^st Century information systems that are integrated with the business process to produce each result and process accurate business data for each performance solution utilized and each result produced.

The means to utilize information systems to process the business is provided by Result-performance Management

Result-performance Management (R-pM) provides the methods and guidance to organize the business for 21^st Century Management. The R-pM Toolkit explains the organization and management of information technology as capital, development of result-specific information systems, the Result-performance Management System, and other needs to use information systems to process the business.