Unified Business Management

Transferring a model of a system into computer environment can be done in several ways.  Without going into the nitty-gritty of precise definitions, one could say that, depending on model’s type and degree of formality, a model of a system can be translated into a digital / computer format as a text document, as a graphical  diagram, as an annotated diagram, as a computer program, and, finally, as a computer model.

When it comes to describing their model of business, or management business model, organizational methodologies go as far as developing graphical diagrams.  Technological methodologies start with annotated diagrams and drive at producing computer programs.  Very rarely computer models are being built for the purposes of supporting a management methodology.

What is a difference between representing a system as a computer program and as a computer model?  In short, the difference is between methods of making changes to computer programs and models when the underlying system model changes.  Computer program is one instance of the system’s model built of behavioral instructions for the computer’s processor.  Computer models, on the other hand, are built of data.  Therefore, when the system model is changed, a computer program has to be changed by a programmer while a computer model can be changed using a model editing interface of a corresponding modeling software package.  The most important thing is that computer code does not need to be changed when working with a computer model.

As was mentioned before, the ideal foundation for business management tools would support not only day-to-day planning and control but also planning of the company as a whole, or structuring.  Organization re-structuring occurs when management methodology or company’s structure changes.  In both cases, the business management model changes.

Managing – or forming, organizing, and running, – a business organization is a lot like conceiving, building, and running a system.  And, therefore, computer based management tools, if they are to accommodate the variety of ways to look at, organize, and control a business, need to be a version of a computer modeling environment.  This environment would allow recording the management business model, changing it as required, and using the model as the basis in decision making, process execution, record keeping, audit, and communications.

(To be summarized…)

So, in the quest for the definition of a business management tool, we looked at what is management and what it means to manage a business organization.  We looked for and found examples of holistic (or covering all aspects of management) methodologies.  These happened to be what we called organizational methodologies, such as PuK, that offer steps and techniques for all business managers to follow.

Next, ways for representing a business as a whole were examined.

Why is the way of representing/describing business important?  Because the concept of a management tool is as much about what managers do as it is about what management actions are affecting.  The future tools would be computer based and, in a computer environment, the formal structure (or system / model / Business Requirements) of the system to be built is required.  Types of management actions – planning, running, and controlling – are a good start but WHAT can be planned, ran, and controlled?  What are the parameters managers are planning, changing, and verifying?  What are the rules of business functioning as a system?

Steps and techniques offered by management methodologies cover, among other things, ways of structuring an organization.  In fact, techniques used by managers are built around a view (or model) of business structure.  Each successful methodology has in its core a certain view of what a business structure is, whether that methodology is holistic or limited in scope.  Limited in scope methodologies, such as project management discipline, make use of abbreviated business description that includes only relevant parts.  On the other hand, holistic methodologies need a complete business description in order to link together all steps and techniques.

But here is a catch.  Managers, among other things, choose and implement those management methodologies, holistic and limited in scope, organizational and technological in nature.  This means that methodology and, hence, the view of what organization is and how it is structured can change.  However, change means that the tools need to be “adjusted???.  When it comes to reorganizing a business, such technological adjustment to a tool used to manage that business becomes a factor in itself.  In some situations, cost of such adjustment can be a prohibitive factor in completing planned reorganization.

It became clear that management tools must accommodate changes in style and methodology of management.

Nevertheless, a look at definition of business implied in various methodologies was helpful.  Organizational methodologies usually come much closer to being holistic than technological, but they have one significant drawback: organizational methodologies’ business models are not formal, they are descriptive.  We needed a formalized, or well-defined, structure of definitions for creating “something??? computer-based.  The closest a descriptive model of relationships among objects comprising the view of a business comes to formal is usually a diagram. We found that PuK methodology again went the furthest among other methodologies in presenting a formalized description of business as a whole.

Even though PuK became the base, it was clear that the formalization of what was called a management business model had to be complete.  A management business model is the basis for constructing management tools.  This type of model should not be confused with the concept of business model, a high level description of core elements of a business which play major role in creating value.

We went on to finish the definition of the management business model (to be published shortly).  There was one final step, however: to bring this model into computer environment.

(To be continued…)

When reviewing shortcomings of both the old school approach and IT-supported SOA, one understands that the current status-quo will lead to increasingly complex and rigid types of organizations that will have to be “demolished??? first before any significant changes to the way they are structured and operated can be made.

The UBM team decided to take a few steps back and reexamine the relationship between management and technology and only then propose a solution.
First of all, there are always appear to be two approaches to tackling issues related to business organizations and their management: purely organizational and technological.  Purely organizational approaches speak about methods that managers should employ with respect to other people and organization’s structure.  These approaches do not usually include a technological component.  They simply describe ideas and actions that can be followed even if the manager’s toolset includes exclusively a pencil and a notepad.  Theoretically, such management approaches as 6-sigma and project management (based on PMBOK) fit nicely in this category.

Technological approaches, to the most extent, provide guidance to IT specialists in either applying organizational approaches to managing IT function or developing computer based tools aiding managers implement what started out as a purely organizational methodology.  Technological approaches, most of the time, are about shortening the time required to produce a computer program automating a particular aspect of data aggregation or decision making.  In this respect, SOA could be described as a methodology to structuring and managing IT infrastructure derived from the organizational methodology for structuring and managing business processes called Business Process Management.

As it happens, very few organizational and technological approaches try to take a holistic approach to addressing the process of management or, at least, describing a business.   At the time of analysis, the most complete management methodology easily found was PuK developed by Dr. Dietger Hahn (http://www.dietger-hahn.de).  PuK is an organizational approach.  However, the detailed nature of the methodology makes help of IT required.

PuK and similar holistic approaches were the first level of foundation underneath UBM.

Next, methods of describing a business organization as a system were considered.

(To be continued…)

Unified Business Management (UBM) was created with the main purpose of providing managers of all levels with a complete set of tools that is required in order to sustainably direct a modern organization. The ability to control and quickly adjust the company itself is paramount for being competitive. In other words, we set out to provide maximum level of control and flexibility to managers of business organizations and units, along with capability to accommodate the vast majority of variations in requirements arising from specifics of industries, regulations, cultures, and technologies.

In order to do that, we need to understand the essence, of business management, its object and its subject.

According to the theory of management, it is usually understood as directing of a group of people or entities toward a goal. More specifically, management is a practice of directing that includes Planning, Organizing, Controlling, and Leading.

This gives us first look into what managers need to do first of all – set goals, plan, organize, control.

When you manage an organization, you plan it, you organize or run it, and you control it.

There are many different presentations of a business organization as a whole. Before it is even created, it may exist as a business plan, a business model, or a documented charter. Later, when it is established, a business organization can be viewed as a legal structure, a set of value chains, or as a set of financial statements and statistical reports. Using financial and statistical reports, a view of the business as a player in a particular market or an industry can be constructed.

Also, there are many ways to decompose a business for the purpose of better understanding and controlling its parts. Business organizations can be presented as functional structures, human resource management hierarchies, sets of geographical locations or product lines. Information technology, the supporting foundation of operations of a modern company, introduced a few ways to decompose a business: information flows and sets of process models.

While dealing with multiple presentation of business organizations, we are witnessing the rise of many flavors of management, each suitable to a particular aspect or presentation of the organization. Quality management, risk management, asset management, revenue management, CRM, project management, process management. They all are add-ons to the practice of general management.

With this multitude of views and approaches, how can we create an environment for a manager to plan, run, and control its business as a whole or any of its parts? There are two common approaches to the issue. First approach is to rely heavily on human power to assemble the information the way it is required for analysis and decision making while utilizing larger computer systems for data storage (the old school). Second approach is to rely heavily on information technology and attempt to automate information flow among smaller but more functionally advanced systems (SOA approach).

In both cases, however, management job is not easy. Old school managers rely on employees organizing information in excel files and loading only highly consolidated results into planning and management systems. They are often forced to deal with human errors, missing information, delays. However, this method gives them more speed and flexibility in their planning, running, and controlling. SOA initiatives allow managers to assemble more detailed sets of information. Under SOA, the quality and completeness of data, productivity, and the level of control over particular business processes are higher. However, the overall speed and flexibility in planning and controlling are same, if not slower, because of the significant dependency on information technology.

(To be continued…)

Hello.

Everyone is probably asking where is the stuff, where are the details? Of course, we discuss the approach with our paying clients. What holds us back in making the details available is the copyright clause we signed with the journal reviewing our last article. As soon as this process is over, we will be able to start publishing basics of UBM methodology. In the mean time, we will start discussing UBM theory. We will also notify you of new speeches and presentations we may be doing.