|
|
|
|
Strategic Business Units SupportedView Template for: Strategic Business Units Supported The purpose of this section is to specifically highlight which corporate business units are supported by this horizontal unit, and to indicate the level of resources applied to each SBU in terms of people and dollars. At any moment in time, a corporation is composed of 'N' number of businesses. A horizontal unit performs one or more activities for the benefit of some portion of those 'N' businesses. Corporate strategy and horizontal unit strategy require aligning resources in concert with the needs of those businesses. It is very important that 100% of the people and expenses of the horizontal unit are allocated to the Corporate SBUs, and not to any other horizontal unit. A common problem in many corporations is inter-departmental cost allocations. These systems attempt to count beans, split beans, mush and then move beans around until the beans stick on an unprotected department that has a budget not yet smothered by other beans. In short, it's a mess. It is also the primary reason why resources are not aligned with the needs of the organization. The answer to this huge problem is relatively simple. The head of each horizontal unit (cost center) must allocate all resources directly to one or more of the existing corporate business units (or to a potential new business unit). The allocation should be rational, based, for example, upon time actually worked. The business unit should agree to the allocation. If the work performed was for another horizontal unit then it might require a discussion with that horizontal unit manager to determine which business units benefited from the work performed. In practice, there are many reasons given why this allocation can't be done. But it can be done; and it should be done. Even ball-park estimates are far better than not doing this exercise at all. For example, if a centralized information systems (I/S) department develops a telemarketing system for the centralized marketing unit, then a conversation between I/S and marketing may be required to properly allocate the I/S resources to the corporate SBUs that will benefit from the new telemarketing system. In practice, it is not uncommon for a business unit manager to discover people supporting the business heretofore unknown. In some cases its the business unit manager who gains valuable insight into support functions performed behind the scenes. In many cases, it becomes obvious that resources are not aligned with the needs of the business, and the people are quickly re-allocated (and the budget is changed accordingly). The number of people applied generally refers to the number of full-time employees applied to each business. In some cases, it might be appropriate to differentiate between full-time and part-time employees, as well as consultants. The overall goal, however, is to clearly indicate how many people are working for each business. |
|
Send e- mail to
webmaster@e-competitors.com with comments. Or
use Feedback.
|
