Integrated Business Management in the Process Age: Creating an Agile Business Management Paradigm

In the transition from the Information Age to the Process Age, we need new thinking and methods to design products and services for the agile business environment. Processes demand a new paradigm that expects more from managing a business and creating solutions than the current information-oriented paradigm. We need methods that are fit for working with processes to replace our methods for working with information, as they aren’t built on the necessary concepts.

An organisation’s maturity in utilising processes in the Process Age can be plotted against its ability to utilise and manage the five basic capabilities for high performance: People, Guidance, Processes, Information and Resources (Figure 1):

The organisation comes into existence because of People generating ideas. People, especially the customers, are the beginning and ending of the very existence of the organisation, because processes don't do work - people do.
Guidance is the foundation of the organisation and encapsulates the motivation and the business rules of an organisation. It is derived from the vision, mission, strategy, goals and objectives and influenced by internal and external influences. It guides, constrains, controls and ensures fairness for all in the organisation. The guidance also determines what services the organisation will provide to achieve its vision. Guidance enforces compliance through its application as governance. (Figure 3)
Processes steer the organisation to be more effective, efficient and competitive. It not only executes the guidance in an optimal way, but also co-ordinates and aligns all activities in the organisation. It ensures that everything the organisation does is linked to its strategy by enforcing compliance to the governance. Processes enable the services of the organisation. (Figure 2, 5)
Information is the building blocks for the organisation’s growth and expansion. It provides the source that feeds the organisation’s knowledge which can be turned into intelligence that builds wisdom. It is an account of the history of the organisation and provides insight into the possible future for the organisation. Information is controlled, utilised and produced by people through the processes of the organisation. (Figure 4)
Resources make it possible for the organisation to produce the products and services that it intends to deliver to satisfy customers. Resources are used in (input) or utilised by (mechanisms) processes. (Figure 2)
All five capabilities are essential to every organisation and are interconnected. Their interdependence is the fundamental nature of any organisation and forms the culture of the organisation. They enable the organisation to effectively and efficiently achieve its goals. Managing these five capabilities in an integrated environment that is conducive to high performance and that meets the demands of an agile business environment, is the essence of Integrated Business Management.

The full potential of Integrated Business Management offers a strategic capability for achieving breakout competitive advantage through process innovation. The scope and complexity will increase exponentially as organisations progress from point-solution information systems to organisation-wide process-oriented systems where cross-functional processes are taken on. This will continue on to organisation-wide business service management where totally new cross-organisation services emerge and must be managed.

It’s about competing for the future in the new era of extreme competition, where the customer is no longer king; the customer is now a dictator that demands the organisation to provide cheaper, better, faster products and services. This can only be accomplished through innovative process-oriented thinking.

In short, Integrated Business Management

Implements Enterprise Architecture from a service- and process-oriented paradigm focussed on successful customer outcomes.
Shapes business design and systems engineering from a service, process and human performance and interaction perspective.
Enables systems to dynamically change to adapt to a dynamically changing business.
Incorporates the management of business into the execution of business processes.

In the next article I will elaborate in more detail on some of the concepts shown in the attached figures and discuss how process-oriented concepts and systems engineering practices can be used in a process-oriented engineering methodology.

Words in Pictures - click image to view

Figure 1: Illustrates the relationship between the basic capabilities of an organisation and how it fits into the wider business architecture. Information is depicted here as the common denominator of the other capabilities. As people are viewed as the essential capability that enables all the other capabilities, it is not expanded on further.Processes and Resources are shown in its next-level context in Figure 2. Guidance and Goal is shown in its next-level context in Figure 3. Information is shown in its next-level context in Figure 4. The above capabilities all comes together in Figure 5.

Figure 2: Illustrates a design of a business service with its interrelated components. The successful outcome of the service is the realisation of the goal that the customer has determined. Note that in this diagram information is depicted as a resource, because this is one of its major functions in the organisation.

Figure 3: Illustrates a business model highlighting the three important shaping paradigms in an organisation: the rules that the organisation imposes on itself, controls imposed on the organisation through regulatory compliance and influences introduced into the organisation especially by the customer.

Figure 4: Illustrates the importance of the information hierarchy in an organisation and how it is entrenched into everything the organisation does. Information is both a resource of the organisation (used by) and a capability of the organisation (produced by).

Figure 5: Illustrates the context of Integrated Business Management and the relationships between the components, which were discussed above. It is near impossible to show all the relationships, so I have settled on what I view as the most important. In most cases there is a bi-directional relationship, but this diagram tries to indicate an over-simplified logical flow.

Gerhard has designed and architected systems and processes for various large financial companies. He has developed a number of methodologies on the use of business rules and processes and established a process library and improvement framework for an IT business. Gerhard has presented at various IT architecture and improvement conferences.