With a third SBU, we are beginning to approximate the
complexity of many Enterprises today. We have also replaced the SBU monikers
with representative names of Finance, IT and HR.
Essentially we are showing that a large proportion of How
the PBUs do what they do, is done by IT. We are also showing that a large
proportion of How Finance and HR do what they do, is also done by IT.
Given these percentages we can work out How each of the BUs contributes to doing the work
necessary for the Enterprise.
(These figures are not entirely accurate because of the
circular/recursive nature of them, however, they do illustrate the point, and
it’s not the accurate numbers that are important but the overall story the
numbers are telling us.)
PBU1 is responsible for 12% of the How.
PBU2 is responsible for 10% of the How.
Finance is responsible for 14% of the How.
ITops is responsible for 60% of the How.
HR is responsible for 4% of the How.
These percentages are not a reflection of
the “importance” of each BU, nor do they reflect how much each BU contributes financially
to the bottom line, however it is an important way to look at which areas do
the most work. If ITops is doing 60% of the How, why would an Enterprises deem
it to be a Cost centre rather than a Profit centre?
In a world before IT, no BU grew so much to
completely dwarf other BUs because if it did, it is likely that it would have
been divided up into more manageable PBUs or SBUs. When IT first began to be
used by Enterprises, the IT BU was only responsible for a very low percentage
of the overall How.
As time has gone by, the use of IT has
grown and grown. More and more of the How was taken out of the BU where that work is done and wrapped up in IT
systems. In many Enterprises this has now grown to such a point that in the
example shown above where ITops is responsible for 60% of the How.
So, IT is a special case, but not because
it’s IT. IT is a special case because it is responsible for the majority of the
How of an Enterprise.