Companies actually do this and (if done competently) the implementation costs are an infinitesimal fraction of the benefits. Big companies generally already have all the info in various databases, they just need to do the right spreadsheet calculation. A tiny 1-person company could practically do it with pen and paper, I think. You can ballpark things; it doesn’t have to be perfect to be wildly better than the status quo. One competent person can do it pretty well even for a giant firm with hundreds or thousands of employees (but they should hire my late father’s company instead, it’ll get done much better and faster!)
If there’s some activity that the company does that sucks up tons of money, like as in a substantial fraction of the company’s total annual operating costs, with no tracking of how that money is actually being spent, like it’s just a black hole, and poof the money is gone … then the wrong way to relate to that situation is “gee it would take a lot of work to figure out where all this money is going”, and the right way is “wtf we obviously need to figure out where all this money is going ASAP”. :) I don’t think that situation comes up. Companies already break down how money gets spent in their major cost centers.
Or if it’s a tiny fraction of the company’s total costs, then you can just come up with some ballpark heuristic and it will probably be fine. Like I asked my dad how they divvy up the CEO salary in this kind of system, and he immediately answered with an extremely simple-to-implement heuristic that made a ton of sense. (I won’t share what it is, I think it might be a trade secret.) And no it does not involve tracking exactly how the CEO spends their time.
Companies actually do this and (if done competently) the implementation costs are an infinitesimal fraction of the benefits. Big companies generally already have all the info in various databases, they just need to do the right spreadsheet calculation. A tiny 1-person company could practically do it with pen and paper, I think. You can ballpark things; it doesn’t have to be perfect to be wildly better than the status quo. One competent person can do it pretty well even for a giant firm with hundreds or thousands of employees (but they should hire my late father’s company instead, it’ll get done much better and faster!)
If there’s some activity that the company does that sucks up tons of money, like as in a substantial fraction of the company’s total annual operating costs, with no tracking of how that money is actually being spent, like it’s just a black hole, and poof the money is gone … then the wrong way to relate to that situation is “gee it would take a lot of work to figure out where all this money is going”, and the right way is “wtf we obviously need to figure out where all this money is going ASAP”. :) I don’t think that situation comes up. Companies already break down how money gets spent in their major cost centers.
Or if it’s a tiny fraction of the company’s total costs, then you can just come up with some ballpark heuristic and it will probably be fine. Like I asked my dad how they divvy up the CEO salary in this kind of system, and he immediately answered with an extremely simple-to-implement heuristic that made a ton of sense. (I won’t share what it is, I think it might be a trade secret.) And no it does not involve tracking exactly how the CEO spends their time.