A system consists of a interconnected set of elements (sub-systems) that are coherently organized and work in coordination with each other to achieve a desired goal or overall objectives of the whole. These elements derive their strength by means of association and influence with other elements whereby collective contribution of the system is greater aggregate individual elements: this is known as systemic synergy. A system at any point in time consists of 3 critical interrelated elements where their properties and that determine system performance.
“A system is a set of elements or parts that is coherently organized and inter-connected in a pattern or structure that produces a characteristic set of behaviors, often classified as its function or purpose.” (Donella Meadows)
From a governance efficacy perspective of the defined system, the key focus with respect to operational units is to measure:
- System performance is based ratio between actuality (actual performance) and potentiality of defined know system (the system paradigm). The key governance objective is to maximize performance by focusing on initiatives that maximize potentiality.
- Productivity: is the ratio of actuality and capability
- Latency: is the ratio of capability and potentiality
The variables associated with the above also provide a key indication with respect to adaption, innovation and transformation; furthermore it provides clear indication in the efficacy of IT sub-system in coordinating effectively the operational units.
Potentiality: This is what system should be doing within the boundaries of existing system state (same function, structure, identity, and feedback’s) by developing its existing resources and removing constraints or elevating constraints to maximize throughput , improvements to management control (context) and processes although still operating within the bounds of what is already known to be feasible.
Capability: This is what system should be doing (still right now) with existing resources, under existing constraints, if there is management focus to eliminate waste, increase output resulting in improvements in productivity and efficiency.
Actuality: present way of managing the system, with existing resources, under existing constraints and exiting governance framework
Profitability is the ability of a business to earn a profit. A profit is what is left of the revenue a business generates after it pays all expenses directly related to the generation of the revenue, such as producing a product, and other expenses related to the conduct of the business activities.
Efficiency is the (often measurable) ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result. In a more general sense, it is the ability to do things well, successfully, and without waste. In more mathematical or scientific terms, it is a measure of the extent to which input is well used for an intended task or function (output). It often specifically comprises the capability of a specific application of effort to produce a specific outcome with a minimum amount or quantity of waste, expense, or unnecessary effort. Efficiency of course refers to very different inputs and outputs in different fields and industries.
Effectiveness and efficiency are attained through interaction of of the sub-systems in pursuit of the purpose of the system in its environment. The goal of sub-systems is concerned with the purpose of the system and the means of achieving that purpose:
- The human sub-system deals with the people and their management and motivation
- The technical sub-system handles the operations (input-transformation-output) with the aid of human sub-system
- Managerial sub-system co-ordinates and manages each of the others balancing their relationship and attending to environmental relationship to ensure viability.
Being effective is about doing the right things, while being efficient is about doing things right are both fundamental in achieving goals related to potential, potentiality and capability. This is only possible if there is total cohesion by all the sub-systems with respect pursuit of system purpose.
Potential sets the limits to what is possible within system substantial environment – the number and kinds of future options available by total systemic transformation (system restructuring consisting of changes to functions, structure, identity, feedback and its resources: Paradigm shift).
System governance is not only about ensuring maximum system performance but to ensure long term sustainability and viability by ensuring effective adaptation.