Specific Problems with Organization and Management Methods

IT Empires and Systems that do not manage the actual Business

Corporations have large IT Empires that cost enormous sums, yet no information system manages the actual corporate business.

By Harry Greene

In most corporations, Information Technology (IT) has grown into a large IT Empire. Corporations have an enormous IT overhead and suffer unsolvable business and information complexity problems because of complex information systems laid over the business. IT Empires carry out their own agenda, rather than focusing on managing IT as capital to provide the specific solutions needed by users to produce results of value.

The following basic problems are inherent in IT today:

  • Information systems do not manage the actual business, as one integrated business system, but manage management structures laid over the business as many complex systems
  • IT administers diverse capital as technology and prevents proper capital management
  • IT administers information as technology preventing proper information capital solutions

So, instead of spending thousands of dollars for the simple information systems needed to manage the actual business, corporations spend millions of dollars administering the IT Empire.

IT systems do not manage the business, but manage structures laid over the business

20th century management evolved long before IT existed to manage the actual business. Actual business data, recording utilization of invested capital as specific business solutions that incur costs to produce economic outputs as specific business results that create value, is difficult to capture and manage manually. So, the enterprise was managed by laying separately contrived structures for organization, corporate planning, working methods and processes, accounts, management reporting, etc. over the actual business.

When IT evolved, no one applied IT to manage the actual business. IT was applied, instead, to convert overlaid structures to the computer. IT enabled each separate overlaid structure to become more complex, until we have today’s complex business processes and information system structures, like SCM, MRP, ERP, CRM, etc., that hide the actual business and prevent actual business management.

Each overlaid organization, strategy, process, account, or performance structure contrives its own separate set of conflicting information entities (department or section, target group, station, center, agency, business unit, etc.). Most of these contrived entities are irrelevant to the actual business, but are recorded by IT systems producing the enormous business and information complexity problems faced by corporations today. Much of the IT expenditure today is not on the processing, needed by users, but is on the systems, hardware, and specialists needed to manage the complexity of overlaid IT systems and the massive irrelevant information maintained. The actual business and actual business data are not managed by any 20th century information system.

IT administers diverse capital as technology, preventing proper capital management

We have well known problems today in the administration of diverse capital under the label Information Technology. The prior article discussed the CIO problem. Application system processing and business data is administered as technology, instead of being managed as business capital. The information system hardware, operating software, networks, and other facilities are administered as technology, instead of being managed with other infrastructure as facility capital. Information Technology strategies and planning are separated from management strategy capital, hampering integrated strategic business planning.

IT administers information as technology, preventing proper information capital solutions

Much of today’s data, intelligence, and other information are administered as Information Technology preventing proper information capital management and solution development. Information capital must be developed and supported separately by professionals as business data, human knowledge, facility records, and management intelligence. Information solutions must be developed, organized by business identifiers, delivered, and integrated as information capital to enable users to produce specific business results.

Result-performance Management (R-pM) utilizes Information Technology for 21st Century Management

Result-performance Management (R-pM) organizes the business for 21st Century Management, to eliminate the Information Technology problem, through the following measures:

  • R-pM manages the actual business as the utilization of capital in performance solutions to produce value in results. The actual business can be managed by a simple Result-performance Management System to manage actual business data such as performance costs, result value, result value-added, and capital worth. The business is managed through five consistently-defined information entities
  • R-pM manages other simplified application programs as performance solutions integrated with the business process, where needed, to produce a specific result or set of results
  • R-pM organizes all capital, including that administered as IT today, to be managed by professionals with the specific capability needed as business, human, facility, and management capital
  • R-pM organizes information capital separately as business data, human knowledge, facility records, and management intelligence to apply proper support and solution development capabilities. Information solutions are organized by result and performance solution identifier and integrated as information capital to enable users to utilize specific business performance solutions to produce specific business results

R-pM simplifies information systems and abolishes the unneeded 20th century IT overhead. This reduces the complete IT problem, so that there is no need for an IT Empire. There is still need for IT capabilities, but they are placed where than can be effective as part of normal operations and development. Information Technology is integrated with like capital to be properly managed and utilized as performance solutions to produce the results needed to create strategic value and ensure the success of the enterprise.