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System and Method for Reducing Headcount in an Organization

IP.com Disclosure Number: IPCOM000228556D
Publication Date: 2013-Jun-18
Document File: 5 page(s) / 210K

Publishing Venue

The IP.com Prior Art Database

Abstract

Disclosed is both a business process and software tool that turns span of control analysis into an executable report with name level output. The software also documents the risks and impact of eliminations. There are three tools detailed here: Layer Based Analysis, Intelligent Grouping Analysis, and Analysis Based on Functional Overlap.

This text was extracted from a PDF file.
This is the abbreviated version, containing approximately 39% of the total text.

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System and Method for Reducing Headcount in an Organization

When companies are reducing their headcount, they typically look to headcount reduction as a means of reducing costs. In many cases, this can be done through assignment to a division or functional area. For example, 'IT needs to reduce headcount by 10%,' or 'Finance has a target reduction of 20 headcount. 'These types of eliminations are usually inefficient. Instead of looking at intelligent restructuring, these functional areas will just identify the low performers, cut products, etc.

Corporations have developed better metrics. A popular measurement is 'Span of Control' (i.e., the number of people directly reporting to a person). This allowed companies to identify managers with few reports. The goal was to consolidate managers that had low spans of control to reduce middle management in an organization. In doing so, the company would increase, or improve their span of control.

Several software tools have been developed around measuring span of control. The problem with the current systems is that the data generated is far removed from practical applicability. For example, the system may generate a report that Company X has an "Average Span of Control is 6", or "There are 30 managers with a span of control less than 4". However, not all of those managers can be combined. Some have very different responsibilities, while others have different types of people reporting to them. In some cases, a manager may be over a 'startup node'; therefore, that manager would have an intentionally small span of control. Technically, that person should not be counted or targeted for elimination.

There are other problems with using "dumb data". Sometimes managers appear to have similar direct reports, but they, themselves, individually contribute to different tasks. Eliminations may not be appropriate in this case, and corporations should have that level of understanding before consolidating positions.

This invention is both a business process and software tool that turns span of control analysis into an executable report with name level output. The software also documents the risks and impact of eliminations. There are three tools detailed here: Layer Based Analysis, Intelligent Grouping Analysis, and Analysis Based on Functional Overlap.

The goal of this invention is to run 'flat' data through a series of lenses (filters) to capture an intelligent set of elimination targets, along with justification of why that person is a good elimination candidate.

During a client engagement, many of these software tools may be run in tandem (e.g., the data from each piece of analysis is combined). Each tool is individually discussed below.

Figure 1: Typical starting data (e.g., from the client systems):

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First Tool (Layer Based Analysis):

The first piece of analysis finds high-level (highly paid) managers that are low in the management structure. This is usually an indication that a perso...