Resource Allocation
by SBU and by Activity
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Template for: Resource Allocation by SBU and by Activity
The purpose of this most revealing analysis is to identify
all of the strategically relevant activities that the company (group) performs,
along with the number of people who perform each activity, by SBU.
The format shown on the template web page should be customized to the needs
of your company. Identifying how many people are working on each business
activity can be determined fairly quickly.
In many companies, especially in service-based industries, personnel-related
expenses (salaries, benefits, office space) approximate 70% or more of the
company's expenses. Given that people-related costs are often very large, and
because people can be re-allocated, this analysis is most important.
In practice, this report receives a great deal of attention. In fact, when
the president or group executive of a company is presented with this human
resource allocation matrix, it is likely that numerous re-allocation
possibilities will come to mind immediately. Although cutting staff is most
common, shifting staff and adding staff is often the result as well.
A common surprise to executives at companies with large centralized
departments is that after dividing (correctly allocating) the centralized staff
among the SBUs, there is less real support than previously perceived. For
example, a 100 person centralized sales staff sounds huge until it's appreciated
that 28 people are administrative staff and the remaining 72 sales professionals
are selling products and services nationwide for eight businesses. Therefore,
the average nationwide full-time complement of sales resources, per business, is
only nine.
For companies with one hundred people or one hundred thousand people, this
table is very informative and extremely valuable for resource allocation
purposes.
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