The military has come up with a lot of useful things: strategy, tactics, logistics, regulations, encryption, operational research, battle formations ... The need to manage a large number of people requires simple, clear and effective schemes. The military has such schemes both for the hierarchy as a whole and within each level of the hierarchy.
The core of the automation industry is the single economic idea of mass software replication. At the same time, in order to ensure and preserve their income, IT vendors, willingly or unwillingly, destroy the ideological integrity of someone else's business, not giving in return effective patterns of behavior and development.
Business has long been annoyed by the inability to complete automation: at least somewhere, at least somehow. Against this background, the stock quotes of IT vendors are ahead of the growth of the rest of the business.
Regularly, once every 4-5 years, IT vendors come up with a new marketing idea that should move the business to a “new technological level”. New ideas and technologies definitely have meaning and potential, but much is reduced to naught due to the dominance of the principles of the economics of replication of programs and the lack of simple, clear and effective schemes for managing a large number of people.
Significant automation costs are charged to overhead. This is the most important indicator that automation has not yet found its place in the business structure.
Let's consider an approach in which an automated solution becomes a real production asset. This approach is related to the concept of digital management techniques.
1. Three types of operating modes of an automated system
The modes of operation of an automated system in business can be conventionally named as: "soldier", "officer", "general".
Soldier regime . Automation allows you to create a "sweatshop" rhythm order. A good example is supermarket cashiers who endlessly scan product codes. The motto of this level is that a step left and right is considered an escape.
The sweatshop rhythm order is good only if the corresponding actions are justified and unambiguous: entering a waybill, weight ... The most common pattern of actions is filling out web forms or fields in specialized programs.
Officer mode... Not everything can be unambiguously formalized and reduced to the input of screen forms. The need to agree and make trade-offs requires different automation. When making decisions, specialists need data and the ability to calculate several options for decisions.
The behavior in which it is necessary to fill in a field or select a value from the list does not correspond to the required level of elaboration of questions in this mode of operation. In this mode, outlook, experience and intuition are important, as well as the ability to manifest them.
Software solutions that provide IT vendors with the ease of automating business processes are becoming an IT case for business and drastically narrowing its flexibility. Note that this is not the fault of corporate IT, but a consequence of the total policy of IT vendors.
Lack of workspace pushes specialists into notebooks and Excels.
This is how the ranks of Excel guerrillas (automation outside the perimeter of the corporate system) multiply.
Four years ago, there were estimates that in the most automated oil and gas sector, 75-80% of decisions are made outside of corporate systems based on Excels (data on foreign companies).
General's regime . Business is constantly changing, markets and competitor configurations are changing.
New ideas are needed. Of course they can be taken from the "best practices". But if you try to implement several best practices in an existing company, you will end up with a monster that needs to be dealt with for more than one month.
In the strategic management mode, you need to have a general vision of the market position and a big picture of the business, as well as find the place of your business in the value chains. Most of the Strategies of companies do not implement these tasks, although they must.
This regime should correspond to a fundamentally different automation associated with the formation of new management methods in accordance with changes in technologies and markets.
Automation in this mode of operation should provide combinatorial enumeration of options, finding compromise solutions and dynamic modeling of development in time.
At the level of strategic management, abstract concepts and categories (market share, transaction, investment) are used, which must be able to relate to the material objects and flows of the company.
The military has "sandboxes" for working out strategies, tactics and action plans; the business does not have such tools.
2. The economics of the software industry.
The software industry is fundamentally different from other industries, and this should always be kept in mind.
In traditional industries, the period of physical aging is calculated in years or decades.
In this case, the main costs are associated with the sale of a series of products. The cost of designing and developing a prototype can be large, but still less than the manufacturing cost.
The time frame for obsolescence appears to be very long. For example, the obsolescence of a rocket, electric motor, vacuum cleaner, tractor, airplane ...
There is no physical aging period for programs (we are not talking about the medium). At the same time, the program becomes obsolete before it turns out to be done: new ideas and algorithms appear. The costs of creating a series-circulation are practically zero. The main costs are associated with the development of the program (it is also a prototype).
The economics of the programs are very simple. The more copies you sell, the more profit. The figure shows the dynamics of payback of programs depending on the number of copies sold. Sale price - 1% of the development cost.
Starting from a certain amount, all proceeds go to profit.
Replication is associated with universalism. Universalism can be realized at different levels. Explicit examples are indivisible Windows and modular Linux.
Until now, IT vendors have followed the path of a very large indivisible universal software solution.
Recently, IT vendors have cut large programs into pieces and started selling software "on demand" (cloud solutions). Most often it turns out to be more expensive than buying a general license. At the same time, nothing has changed meaningfully for business and the software has not become closer to the needs of the business.
What is the common problem with typical replicated solutions?
Such a solution is always both redundant and insufficient for each specific business.
For standard solutions, the implementation stage is required. First, the typical solution is being finalized for the client and partially loses its universalism (sometimes significantly). Secondly, established business processes are rebuilt (broken) under the assumptions and structure of a typical solution.
It must be admitted that without typification and universalism there will be no good economics of the software industry. However, the existing traditional approaches of IT vendors to typing clearly negatively affect the conduct and development of business.
3. Terms of reference for solving a problem that is not known how to solve
An alternative to standard replicated programs is individual development.
In order for a developer to get money safely at the end of the work, he needs to be able to successfully formally report. For this, the Terms of Reference (TOR) is made.
It turns out an interesting situation: TK is written on a system that should, from the first and only attempt, solve an existing problem, which is not known how to solve. Otherwise it wouldn't be a problem.
Since it is not known what solution should be obtained and how, a simple scheme is proposed: collect the maximum amount of data and reduce everything to visualization, flexible reports and dashboards.
The data structure and data typing "from common sense" predetermines the final failure. As real tasks arise, it will be almost impossible to change the initially selected data structure and the implemented data typing (true for the most common programming paradigms).
The developer will be able to report, but the business, most likely, will not really need the system.
4. A sandbox for practicing joint actions and making decisions. Digital Terms of Reference
First, about the "general" sphere.
A fairly large number of topical business tasks lie on the border of interaction between functional areas and structural divisions of the company ("edge business tasks"). For such tasks, it is difficult to make even a primary statement, as well as to formulate the requirements for the necessary data and the final solution.
At the same time, significant reserves of management and business efficiency are associated precisely with tasks of this kind.
The proposed concept of digital control methods is based on the use of simulation tools for the primary formulation of the problem. For this, a library of basic blocks and connectors has been created, allowing to implement typical business processes and operating business models. Simulation models are done in Modelica notation.
This technology makes it possible, in 10 days, only on the basis of a schematic diagram or an oral description, to make an initial statement of the problem, which is also a valid model of the solution. The current layout works on time series of historical or plan data.
As a result, the company, 10 days after starting work, has a digital twin of the business or its specific sector, which stakeholders can test on various data, analyze, criticize, change, develop and improve. The most important thing is that almost immediately after starting work, the company has a working prototype of the final solution.
At the next stages, the first approximation of the solution layout is iteratively improved through the implementation of new ideas and previously escaped conditions and circumstances: the necessary blocks and connectors are added, taking into account the actual functional dependencies, as well as information, material and management flows.
The simulation results are visualized in the required business projections.
In the concept of digital control methods, optimization problems arise as a way to find the best compromise solution when the general picture is clear. In the presence of a formalized general picture, optimization of some areas cannot lead to unpredictable difficulties in adjacent areas.
The concept of digital control methods is focused on heterogeneous mathematical models. This allows, within the framework of solving one complex problem, to use completely different mathematical methods that best reflect the nature of the corresponding subproblem. So, within the framework of the simulation model, you can set blocks that initiate the solution of the problem by the required method with the actual data fixed at the time of entering the block.
The presence of a valid model for solving a strategy or boundary value problem allows us to speak of a "digital Terms of Reference": data structures are clear, the list of tasks and required methods are defined and implemented, data requirements are fixed, testing procedures and results are clear that verify the correctness of the programs. The digital TK appears a posteriori following the creation of the solution layout. The presence of digital TK makes it possible to create a target system in any environment (write or rewrite) and almost any scale in the shortest possible time.
5. Workspace of employees: records, options, scripts
The "officer" sphere is the most complex and widespread.
The adoption and revision of "temporary solutions" in response to specific situations and circumstances is a significant part of the work of employees.
Modern corporate systems do not provide a workspace for such work. For example, in the EAM (Enterprise Asset Management) module, this is just a pile (track) of text records thrown over.
Almost every program used in business creates an IT case that limits decision-making to the templates and templates provided by the program developers. In this case, it is not possible to make a decision in accordance with specific circumstances without going outside the program perimeters through Excel and becoming an Excel-guerrilla (in relation to the corporate system).
The attack associated with the widespread use of Excel files outside the perimeter of the company's information system can be an advantage within the proposed digital governance concept.
Especially if the company's specialists were able to express the essence of the functional elements of business management in Excel files, avoiding unnecessary restrictions and assumptions imposed by typical software systems (IT cases).
6. The architecture of the corporate system. Metasystem. Enterprise data bus
It is not correct to offer something in the field of corporate programs without fixing the impact on the system architecture.
Consider a design from programs traditionally implemented in a company: an accounting system (ERP), a document management system, a customer service system (CRM), an automated process control system ...
Now it is joined by a model for solving a certain interstructural and / or interfunctional (boundary) problem that uses data existing systems and claims the status of software for decision-making, as well as subsequently will have to influence existing systems and vectors of their development.
What is the result: a solution or a new problem?
The solution is to start considering the corporate system as a hierarchical structure.
It all started with a hierarchical organization of memory; microprogram hierarchies - high-level programming languages; the physical - logical hierarchy. It is advisable to return to the idea of a hierarchical organization in the field of corporate governance.
Why can a hierarchical architecture of corporate systems be very useful?
There is a paradox: previously implemented programs inevitably become obsolete (in the context of the rest of the company's software), but the areas in which they operate remain unchanged for a long time (inertness of physical systems).
The implementation of the concept of a metasystem (a system of a higher logical level) allows not only keeping outdated programs, but also giving them new functions.
In turn, the current model for solving a boundary-value business problem becomes a technical specification for a new level of the hierarchy.
The following is an architecture diagram.
In the sandbox, digital twins of actual business tasks of various levels are formed. Experience shows that it doesn't really matter which tasks to start with - as a result, all important aspects of the business will be covered (everything is connected with everything). The main thing is the presence of an Internal Customer (this is a prerequisite).
The set of tasks leads to the formation of a structure from control bases and interaction coordinates. This structure is the backbone of digital management methods: it represents an operating model of a business and a set of digital TK.
The architecture of the corporate system is represented by physical and logical layers connected by the corporate data bus.
The physical level of the corporate system includes the existing gradually outdated software systems and newly added new information technologies: programs, services, platforms.
The logical level of corporate governance (metasystem) is made up of concepts and categories in which business is thought of: transaction, delivery, flight, market ... and which do not have an explicit unambiguous correspondence to material objects and business entities. We will call them "virtual objects".
Real tangible assets are represented by objects that we will call digital production assets. These items, in addition to the nominal characteristics of a tangible asset, contain historical data, dynamic characteristics and temporary decisions that are associated with this asset.
All actions related to business management will be associated with digital operations (symbolic business operations), which are implemented on virtual objects and digital production assets. This primarily applies to the tasks of management accounting.
Virtual assets, digital manufacturing assets, business operations, and the business operating model are all useful in and of themselves in addressing pressing business challenges.
Considering the fashionable tendency in the formation of domain business languages, it should be noted that the described constructions make it quite easy to compose a specialized symbolic language of business (SSDL Special Symbolic Domain Language). If there is an SSDL that realizes the specifics and competitive advantages, the business can move away from the traditional automation scheme and work only at the top level of corporate governance. In the new scheme, it is not program innovations that determine management capabilities, but, on the contrary, the business selects programs to suit its needs.
As a result, the business determines what kind of IT it needs and can easily get out of the IT cases.
7. Digital Memorandum: Programs as a Production Asset
7.1. Digital "carnival" can be curbed, straddled and directed to business benefits if the problem of automation of management accounting is solved .
In this case, the original goal of business automation will be achieved: to increase its efficiency.
At the same time, the question of the level of utility of programs and their acquisition of the status of a productive asset is resolved by itself : it becomes known to what effect their application leads.
7.2. Technological management accountingis associated with the ability to wedge in (break and fail) into a business process anywhere, identify current characteristics and perform calculations (including with external data), as well as carry out the necessary control action (drop-control-uniform). This requires a dynamic big picture (depending on circumstances and contexts). Only end-to-end business processes are not enough: they are enlarged, and links with other processes are displayed in them in a partial and static way.
7.3. It is necessary to move from a statement of the potential capabilities of corporate systems to a set of tasks to be solved .
Corporate ERP is not a "single source of truth", but a tool for submitting accounting reports well and on time.
High availability of equipment is the task of choosing a method of maintenance by flow charts or by condition and providing predictive capabilities for troubleshooting. Etc.
An integral part of most tasks should be an economic component, determined by the implemented tasks of management accounting .
7.4. Now there are no clear guidelines for development : approaches to business are very different, there is an incomparability of technologies and competitive advantages. Of course, “best practices” can be used, but they also require arbitration functions and the selection of performance criteria (benchmarks) when finding trade-offs.
The truth is that development guidelines must be formed by ourselves. And these guidelines will reflect the subjective preferences of the first leader and management. There are no other options.
7.5. All the problems and competitive advantages of a particular business are manifested in the planning procedures .
The basis for the formation of digital methods of business management is the revision of the relationship between planning and management processes.
The idea of drawing up long-term plans and their disaggregation (clarification) cannot be adequately realized in modern conditions with actual rapid changes in the situation and circumstances in which decisions are made.
The previously used construction “long-term – medium-term – short-term planning and operational management” in modern conditions is untenable and impossible.
It is proposed to change the design of planning, taking operational management as a system-forming basis .
When describing the Operational Business Model, it is advisable to operate with three types of information components: virtual objects, reference dictionaries and dynamic calculation and normalization tables.
Virtual objects are categories in which business is thought of.
They contain both informational elements that have a material equivalent (batch, ship) and elements that do not have an explicit material equivalent (voyage, transaction).
Reference dictionaries are summaries and collections of information:
- containing a list of concepts, terms, definitions, names, identifiers and facts used;
- fixing certain characteristics of material objects (volume, ...);
- describing sustainable events (schedule, fees);
- informing with a high probability about the values of important parameters (fuel price);
- representing processed historical data and forecasts.
Calculation and normalization tables work with information and data from virtual objects and dictionaries.
They form dynamic (depending on parameters and variables) calculation options according to the adopted methodology and in the assumptions made.
For one and the same task, calculations can be performed in several versions according to different methodologies and under different assumptions or assumptions.
At the present stage of business development, the majority of management decisions are made at the level of operational regulation. The main reason for this is the constantly changing environment, which cannot be foreseen even in short-term planning. This circumstance turns operational regulation into the main tool for increasing the efficiency of business resources.
The process of making operational decisions occurs almost simultaneously with the process of direct business, and the redistribution of resources is carried out daily - sometimes several times a day. And the decision-making process and the reallocation of resources are implemented within the framework of the allocated tasks .
7.6. Economic modelautomation looks like this. In an explicit form, the original TK is absent: there are intentions and wishes. Acting layouts, digital twins, and logic control models are created using high-level, high-power languages. This allows you to redo and rewrite programs (algorithms, data structures) at least 5-7 times without any problems (in practice, it does not work out less). The result is a working prototype that satisfies the customer and digital TK.
At the next stage, the most suitable tools for the customer are used. Usually these are opensource solutions and any specific software environment: selected for the cost of programming or the actual availability of programmers.
The presence of a digital TK allows you to consciously choose functional modules from free libraries and test them on existing data.
The assembly of a software system is also deterministic: it is clear what, how and on what data it should do.
Thus, a hybrid approach is realized: the system is simultaneously individualized and uses standard modules.
An added bonus is no license fees.
7.7. Understanding "as is" in no way initiates, does not define and does not provide any guidelines for the target "to be".
The only correct, but difficult to implement, option for forming the target system is a complete combinatorial enumeration of possible options and their assessment.
The concept of digital management methods is associated with solving the problem of production and commercial constraints . In a specific case, this solution can be part of the business operating model or a separate task.
The method of normalizing production and commercial restrictions allows:
- significantly reduce the dimension of the search;
- localize correlating factors;
- cluster the activities of the company.
Together with mathematical modeling, the use of normalized production and commercial constraints makes it possible to enumerate significant options and form several target states, depending on the given preferences and circumstances. It can also be seen as variants of various Company Strategies.
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