Monday, January 21, 2013

Managing Resources - Key To Company Growth & Profitability

It is absolutely critical that Senior Managers manage the company's resources, which includes people, technology, equipment and physical space to achieve company growth and profitability.   Spending too much in any one of these areas will be at the expense of the others and the growth of the business.   This is particularly true related to people in a service business because this one cost factor comprises 65 - 70% of the expense line.   This gets down to the department, division, or subsidiary level.  

As such, if one department, division or subsidiary is over staffed, it will be at the expense of the other functions of the company that may legitimately need more staffing.   For that reason, it is possible to see lay-off's in one area, while at the same time the hiring of new employees is happening in another area.   The lay-off's occur when there is a mismatch in skill set, since people cannot always be moved from one job to another.

Specific to technology, no matter how good, it is never good enough according to end users.   As a result, there is always pressure to add the latest and greatest when current technology may be just fine.   And, technology does not always lead to greater productivity.   To the contrary, the more sophisticated the technology, the more people required to support it.   Further, in my experience the breath and depth of new technology rarely gets used to the fullest extent of its capability.   So, more often than not, technology is over bought. 

Finally, there must be a match between physical space needed and physical space owned, leased or rented.   Companies should move quickly to get rid of space that is unneeded, since it is just a drag on the company.   Managing Resources is a primary responsibility of Senior Management.   It is a daily, never ending job.   Ultimately, Managing Resources is the key to company growth and profitability. 

No comments:

Post a Comment