Prd 020 What are the critical questions I am not thinking to answer Regarding the Cubic Business Model™ (CBM™)? Created by James on 6/23/2013 2:10:43 PM
I am continuing to see that virtually no-one is “getting” the value of what I am talking about when it comes to the Cubic Business Model™ or CBM™.
I see a picture of something that is so valuable it is almost beyond belief and, so, almost nobody believes me and I am not sure that anyone understands me fully...
Following is a stab at answers to some questions that I you may need to ask me:
1. What is the CBM™ REALLY?
What is this thing you call the Cubic Business Model™? – REALLY?
Answer: The Cubic Business Model™ is a portfolio of logic that accurately describes the practical components of any organization all of which comprise Divisions (business units) à Locations (where we do what we do) à Functions (what we do) and data elements such as costs, revenue, assets, liabilities, plant, people, etc.
This is coupled with a large body of standards that were originally developed in 1990 and have been proven in a number of projects over the years – we can offer white papers to back this up.
2. Modelling?
What has “modelling” got to do with Accounting – we deal with facts!?
Answer: The term “modelling” refers to the organization of information in such a way that it correlates closely at a logical level with the practical components of the organization – all these elements are associated with precise definitions of financial accounts and other measuring bins such as allocation of people, assets, products, etc.
ALL ERP’s operate with these models but the need for the level of precision that is advocated here is generally NOT understood.
3. James, what does an engineer know about accounting?
James, you are an engineer, how do you presume to suggest you understand accounting?
Answer: This is NOT about accounting – it is about the logical, systematic, structured ordering of information (including but NOT limited to financial information)
Your organization employs accountants so there is no need for me to be an accountant – I have enough accounting experience amassed over nearly 25 years of working with accountants to be able to have an intelligent conversation and interaction with an accountant to the extent that it is necessary for me to act as a facilitator and advisor in developing a Cubic Business Model™ -- I know how to interpret Tee Diagrams (DrTCr).
My strength is in analysing and structuring data – that is the gap you have, your job is to supply the people who know your business intimately and also the accountants – you are welcome to bring in your auditors as you consider necessary...
4. This used to be done with a 24 column cashbook and now?
We used to do this with 24 column cashbooks and now you want us to spend tens of thousands of Rands / Dollars / Euros / etc developing something we have never heard of??
Answer: Gartner have reported that most organizations are not making better decisions than they did five years previously – this is precisely because most ERP installations are implemented like scruffy 24 column cash books and NOT as the massively powerful data processing engines that they actually are.
5. The big players don’t talk about this so…?
The big 5 don’t talk about this, they do not teach it at University, in fact I do not know a single accountant who knows about this let alone thinks it is important!
Answer: That is because I did not learn it from any of them – I worked it out myself from first principles as a synthesis of a very UNUSUAL mix of knowledge and practical experience.
Most of the established players have a major problem making the paradigm shift necessary to see that there is a far better way of doing things because it will potentially massively detriment their revenues in the medium to long term.
6. Reduced audit fees? – presumptuous!
You talk about reduced audit fees but you are NOT an auditor – that is SERIOUSLY PRESUMPTUOUS! – what makes you so confident?
Answer: Maybe – but I have had cases where it happened (completely unexpectedly) – once you accurately model the business then everyone uses the ERP and the GL and associated systems with appropriate discipline and the quality of the financial information improves dramatically with the result that the business essentially becomes self-auditing with the result that in the end there is much less work for the auditors to do AND the quality of the financial statements improves dramatically as well – this is subject to you using the disciplines which are part of the total CBM™ package.
By the way, in many organizations virtually NO operational managers make use of the financial system for operational performance measurement.
7. We need to keep our history!
What about our history?
Surely this is going to trash all our historical records – your design will be totally INCOMPATIBLE!
Answer: Well, directly YES it is and NO it does not matter! And there ARE ways of dealing with it.
Put the history into a custom designed data warehouse, put the new data into a NEW custom designed data warehouse, map the old codes onto the new codes and, if necessary, put that data in an extension of the new data warehouse to the extent necessary to actually use the history.
In my experience most organizations scarcely use the history at all except at a very summarized level and by forcing the implementation of your new ERP to comply with the old data you make the new implementation look just like the old implementation so there really was no point in putting in the new system.
Generally when people build a new building they demolish the old buildings on the site!
8. What if it doesn’t work?!
This is a HUGE RISK – what if it doesn’t work?
Answer: What is the risk?
The fact that you are reading this document indicates that your present system is probably a MESS!!
How will carefully thought out content that you have personally overseen production of to ensure that it accurately models the real world in which your business operates produce a worse mess than the unstructured spaghetti that most organizations have at present?
And, YES, you will have to do the job carefully and thoroughly and precisely because a sloppy mess WILL place the business at risk – which is a GOOD reason NOT to use conventional ERP implementation methods...
9. This needs DEEP knowledge and experience of our industry
We need a person with DEEP knowledge and experience of our industry to do this, NOT an engineer who hardly knows our business!!
Answer: You and your team have the deepest knowledge of your business and your business in your industry right here in your organization.
If you really want to you can contract in further industry experts but I doubt that will be necessary.
I bring a deep knowledge of information classification, the Cubic Business Model and other logical constructs coupled to over 20 years practical experience facilitating this work in diverse businesses.
TOGETHER we can produce a superb high value outcome that YOUR organization will own fully – provided everybody does their part...
I hope my answers to these questions have helped you to better understand what I am saying.
I look forward to the opportunity to discuss this with you!!
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