Need For Result and Performance Management

Business Complexity from Excess Results and Poorly Utilized Capital

Some enterprises proudly state that their business is too complex for standard business solutions, and, rather than simplifying, become even more complex by adding custom solutions.

The enterprise is organized through an enterprise organization structure and managed through enterprise management structures that are laid over the business. Each structure has its own set of contrived entities to manage, but do not manage results or performance solutions. Managers tend to initiate new outputs or results within their organization units, without a framework for enterprise planning or management. The accumulation of contrived structures and entities and results and performance adds to business complexity. Now, business complexity is being recognized as a performance problem.

Actual business complexity can only arise from two sources:

  • Excess results that do not meet an objective or results with performance costs greater than their value
  • Undefined, hard-to-manage, and ineffectively-utilized capital that does not produce result value
It is difficult to recognize this because the enterprise is managing overlaid structures and other contrived entities, rather than managing the actual business in the real performance solutions utilized to produce results.

The failure to manage results produces excess results, and the failure to manage performance produces underutilized solutions

Most enterprises do not control the results they produce. Results are not evaluated to understand their value and contribution. Therefore, traditional results continue to be produced after their value has diminished and excess results are produced on the way to producing a final result.

Once implemented, most conventional solutions are complex and difficult to change. Capital is packaged in monolithic solutions that mix different capital together and fix it in place. High-worth capital is "intangible" and not defined or managed. Performance solutions are not delineated as such, so the enterprise does not know what capital is where. Enterprises try to cost performance but many costs are "unknown". Incompatible performance solutions are added on without a plan to produce a simple and effective enterprise whole. Performance solutions are improved, not to simplify them, but to patch over the symptoms of complexity. This reduces the immediate effect of the problem, but also adds on even more complexity.

Business organizations fix human and facility capital in place independent of the need to produce results. Business process solutions fix process capital in place together with human, facility, and management capital. Application systems do not manage the business, but manage structures laid over the business. Each structure defined many conflicting information entities to manage creating massive information complexity. Information systems are managed as technology, rather than as a business solution, and are outside the process requiring interfacing and extra work. System change, needed for the business, is in the IT backlog, prompting complex workarounds. Improving solutions and capital utilization requires an expensive and disruptive change project, which often creates more complexity.

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Complex Business Compared to Simplified R-pM Business: Businesses, by nature, become more complex over time as new results must be produced and new solutions are added. Currently, enterprises are managed through overlaid structures, so there is no defined businesses structure to consistently organize results and ensure compatible performance. R-pM organizes the business structure to manage essential results that produce value and standardize capital in useable solutions. The capital needed to produce a specific result can be defined as a module for easy replication, change, or deletion. The business is managed by a basic Result-performance Management System. When results are deactivated, capital is redeployed to other results.

Structure your business to produce only high-value results and to use only cost-effective performance solutions

R-pM manages one integrated business structure to eliminate and prevent business complexity. R-pM simplifies the business by structuring only the high-value results the enterprise must achieve. R-pM emphasizes producing high value-quality results with minimum cost-effective performance, in a result-performance module. Performance not producing results is discontinued. The business is managed by one simple Result-performance Management System based on five consistently-defined information entities, to eliminate business and information complexity.