hsvsunshyn t1_j2dz36d wrote on December 31, 2022 at 3:37 PM

Reply to comment by DirtyThunderer in ELI5: Why do companies require annual budget be spent 100%? by angrybird7677

>giant companies don't take a more sophisticated approach to things

Giant companies are giant. It is difficult to give each group/department/division its own rules, so they prefer one-size-fits-all approaches, even if they are more inefficient individually. The amount of admiration overhead of having uniform rules means that it is more efficient for the entire company. In some cases, large divisions or unique groups are run more like individual companies: think of Gmail under Google, or the logistics arm of a retail chain.

>I work in quite a senior position at a big company and my boss sent an email several weeks back to me and other managers that was basically just 'we have lots of money left, send me your wishlists'. You would think that the company would realise what's happening when every year every department orders a bunch of fancy expensive tech in December, but it seems not...

Every year, people are limited to what they already decided they needed, and those decisions were often made the previous year. Then, once 95% of the year and 85% of the budget is gone, there is some discretional money left over that can be used for new lab equipment, better chairs, bigger monitors, or whatever else. This "extra money" is thought to be good for the morale, and it gives a chance to buy one-offs that were hard to budget for. My group often will buy equipment to do proof-of-concept or tester equipment, to evaluate if we should consider using new technology or not.

This "extra money", at least in cases I have seen, comes from the group spending less money than expected, often through intelligent employees, but sometimes just by dumb luck. In either case, it works as an incentive. If we figure out how to do the same job, but use 9 widgets instead of 10, then the money for that extra widget can be used to replace everyone's old nasty keyboards that year... The company does not care, since they expected to spend that money anyway, and we employees are happy when the pallet of new keyboards show up.

I do know there are some instances in the world where people request twice as much money as their group actually needs. My hope is that those are discovered and stopped, unless that group is making the company so much money that nobody cares...

FrankDrakman t1_j2e50k0 wrote on December 31, 2022 at 4:20 PM

> Giant companies are giant. It is difficult to give each group/department/division its own rules, so they prefer one-size-fits-all approaches, even if they are more inefficient individually.

The myth of Procrustes was he welcomed all travellers to spend a night in his bed for free; however, if you were too short, you were stretched to fit it the bed, and if too tall, some of you got lopped off. We use the same Procrustean 'one-size-fits-all' approach in many places in the modern world, from grade school, to government policies, to goddam 'one-size' socks that are either too short or too loose. I suggest it's an artifact of the mechanical age, which we are in the process of leaving behind.

The assembly line that so tremendously increased material production was based on identical parts, assembled in an identical manner, to create identical products. Our new computer-controlled systems have the potential to create unique parts, uniquely assembled, to deliver a unique product to you. (No, we're not there yet) We may be leaving the Procrustean model behind.

I worked as a data analyst. I remember 'strategic planning' in 1980 - using 6 to 12 month old data to predict where you were going to be in five years, and what you should be doing to get there. Now we have real time data available, and the computing power to process it instantly. Presumably, the greater flexibility of this process will filter down to the budgeting system, but that will probably take the retirement of the Boomer generation, who are still stuck in the Procrustean paradigm.