Part of the change managers portfolio can be the organisational redesign of departments as a result of the new processes and systems being introduced. This can be a huge undertaking although the return on investment in doing this right can be significant for large corporations. But what if you need to prove a headcount reduction as part of the benefits the project is delivering and you are working on a smaller project and the budget doesn't stretch to detailed mapping of current and then new processes in order to identify such attributes as volumes, time to complete and costs for each activity.
Well here is a quick method to validate your FTE (Full Time Equivalent) reduction. Just remember this is a method for indicative value only.
Simply produce a resource matrix with each employee (or role) in the left hand column.
1. In the right hand columns (Maximum of 5) enter what core activities each person currently performs? Use the 80/20 rule. The 20% of activity that produces 80% of the outputs.
2. Record how long each activity takes to complete? This can be expressed as a percentage of the total work hours in the day. Say David spends 2 hours of every 8 hour work day (10 hours of a 40 hour week) entering data into a system then this takes 25% of his time each day / week.
3. Cross through what will be eliminated as a result of the new system?
4. What will be reduced and record by how much?
5. What new additional activities may be required?
6. Redraw the matrix less the eliminated and reduced tasks plus the new.
7. This will provide a high level view of what FTE is required and the basis for redesigning the department. Align this with the original matrix and the difference will be the gross saving...or benefit / FTE reduction.
1. In the right hand columns (Maximum of 5) enter what core activities each person currently performs? Use the 80/20 rule. The 20% of activity that produces 80% of the outputs.
2. Record how long each activity takes to complete? This can be expressed as a percentage of the total work hours in the day. Say David spends 2 hours of every 8 hour work day (10 hours of a 40 hour week) entering data into a system then this takes 25% of his time each day / week.
3. Cross through what will be eliminated as a result of the new system?
4. What will be reduced and record by how much?
5. What new additional activities may be required?
6. Redraw the matrix less the eliminated and reduced tasks plus the new.
7. This will provide a high level view of what FTE is required and the basis for redesigning the department. Align this with the original matrix and the difference will be the gross saving...or benefit / FTE reduction.
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