Definition: Distrans is the logical number of Resource layers between a Resource and the Core Product of an organization.
This definition uses two elements, Resource and Core Product, that are defined as follows.
Definition: the Core Product of an organization is the Product that is considered the "core business" of the organization and that creates the revenue.
Definition: a resource is any element in the enterprise in that serves a specific function. It can be a person, a tool, software program, or even a document such as Project Documentation.
To fix thoughts let’s consider the example of an industrial bakery. The core Product of the bakery is all sorts of bread. The bread creates the revenue and, being the core product, its Distrans level is zero.
The bakery employs a number of bakers. The bakers are in direct contact with the bread, and for that reason their Distrans level is one. The shop assistants selling the bread to customers, also are in direct contact with the bread and have a Distrans of one.
The industrial bakery in this example has become very successful and starts selling bread at a larger scale. More bakers and salesmen are hired. Soon a manager is assigned to oversee the work. This manager is at a Distrans level two. Between the core Product and the manager we find the bakers and salespeople.
Since the manager is no longer directly involved in making the bread, there’s a larger psychological distance between the manager and the core Product. He's less concerned with the bread, but deals with the people working for him. His first concern are the resources between the core Product and himself. Nevertheless, it can be assumed that a manager at a Distrans level two still has a strong feeling for the core Product.
The industrial bakery expands and soon multiple branches can be found in the country. Each branch has its own bakers, salespeople and local shop managers. A district manager is hired to manage the vendors and shop managers centrally. This district manager is at Distrans level three. Her core product is no longer the bread. She’s concerned about Human Resources, financial reporting to senior management and directing the other managers.
Soon the district manager feels a need for Enterprise Resource Planning (ERP) software to make her life easier and do better analysis. The ERP program, too, can be considered a resource and is at Distrans four from the bread.
The ERP software doesn’t include bread specific data items, such as information on food safety. The district manager hires a programmer and asks for changes in the software. The programmer is at Distrans level five. At this level it becomes obvious that the programmer has little feeling for the core Product. The programmer’s Product is not the bread, it is source code.
Not long after, there’s a security issue with the software. A hacker managed to exploit a bug in the software and deleted vital data. Gravely concerned, the owners of the bakery hire an IT security officer and demand a full company audit.
Not being a software specialist the security officer demands that the software programmer creates detailed software documentation as of now. He also introduces IT risk assessment questionnaires that in great detail analyse potential risks in the software. Vendors that want to do business with the bakery are also required to complete the lengthy IT risk assessments.
The software documentation is to be considered a resource, and is located at Distrans six.
The security officer has made himself dependent on that documentation, and with that he puts himself at a Distrans level seven from the core Product of the Organisation. The security audits no longer are about the Core Product (i.e. the bread), but about the right documentation and paperwork.
Shortly after, the security officer blocked a software update because the security documentation hadn’t been completed in time. This resulted in a delay in ordering and a flour shortage several days later. Production came to a halt.
From this simplified example it can be concluded that the larger Distrans made the security officer take decisions that were negative to the company revenue. However, it would be too easy to blame the security officer for the production stop. He is paid for making sure IT security is guaranteed, and he wants to do a good job. His decision was the right one, but it should have been avoided that Distrans levels could become too high.
An empirical analysis of the Distrans concept results in the following rules of thumb.
- The larger the Distrans of a resource, the larger the relative cost for maintaining the resource in the company.
- The larger the Distrans of a resource, the lesser the added value of that resource to the company.