Eliminating duplication of functions

Segmenting mangement

In the first case, because the Business Functions use natural language, functional abstraction reveals identical functions among the various segments of management. In the general area of organization and management there are serious semantic problems because words are sometimes used as nouns and sometimes as verbs. They are often used to signify concepts and at other times to denote specific actions. They are used interchangeably. Various authors use different definitions. Each embraces a range of statements from broad and important to narrow and comparatively unimportant.

Most words are highly dependent upon context. There are two defects of languages to be avoided:

• Imprecision - Insufficient detail supplied
• Ambiguity - Insufficient context supplied

For example, the terms purposes, objectives, goals and targets are often used interchangeably, which leads to semantic problems.

A similar semantic problem is found with terms such as enterprise-wide, corporate, global strategies and portfolio strategy, or action programs, operating plans or budgets and tactics.

Another example is with terms such as policy, procedures, standard operating plans and rules. Policies are guides to carrying out an action. A procedure is a series of related steps or tasks in chronological order to achieve a specific purpose. A well-established sequence of actions is called a standard operating procedure. Rules are prescribed courses of action that are stated in sufficient detail to leave no doubt about what is to be done. They are specific and permit a minimum of flexibility and freedom in interpretation.

Hence the Business Functions will contain, for example, only one function called Performance Measurement. In any business scenario that calls for a performance measurement function, be it in the human resource, finance, marketing or any other business area, the same performance function is invoked. Similarly, where there is a number of different time-spans involved, such as strategic long-term, tactical medium-term, or operational short-term performance, it is the same functionality that is invoked. Any other approach would lead to duplicated sub-functions appearing throughout the hierarchy.

Abstracting function implementation

In the case of different types of implementation of a function (such as risk management function implemented in interest-rate risk, foreign exchange risk, capital risk, human resource risk, credit risk management) the approach adopted in the Business Functions has been to avoid typology and seek a more abstract, generic decomposition (such as risk selection, risk identification, risk evaluation, risk limitation). In other words, the functionality is common across different business areas.

There are exceptions where typology is admissible. This occurs when the goals and objectives of the different types of function are sufficiently distinct and separate. Abstracting from lines of business and avoiding typology can raise communication issues with the user. When defining functions, every effort must be made to supply a context or purpose, and to employ examples couched in the business language, in order to overcome this limitation. There is a delicate balance between communicating efficiently with the user in agreeing specifications and alternatively avoiding the design and construction of systems with duplicated functions.