Resource allocation data analysis for staffing levels

Big data analysis: Resource allocation budgets for manufacturers benefit from data about where product development occurs.

By Dan Roberts May 9, 2016

Software tools for engineering and design, such as computer-aided design (CAD), computer-aided manufacturing (CAM), computer-aided engineering (CAE), product-lifecycle management (PLM), represent a substantial market. Market figures analyzing usage and integration show more than just sales opportunities for a software tools provider. Such figures show where product development is happening and can help manufacturers interested in specific markets decide where to allocate resources.

If a business involves:

  • Components that might be selected for use in these products
  • Systems that might be chosen to manufacture these products
  • Services for distribution and maintenance.

Then figures like these can help find the development teams in software and other industries, as the following example shows.

Resource allocation can be among the more contentious issues in market planning. Country and industry managers will explain the need for more resources, often without hard data. Results can be informative but influenced by historic resources applied and the length of time they have been addressed. Newer countries or industries could be unfairly represented. An independent data source can help to avoid these problems. 

Global overview

To illustrate the need for accurate marketing data, examples are provided using a fictitious technical applications vendor. The vendor needs to decide where limited resources will be applied across target countries and industries.

Using data supplied by an independent specialist, represented in the following graphs and charts, can provide an overview of spending trends on technical applications across countries and industry sectors.

Figure 1 shows the data by country (vertical axis) and sector (horizontal axis), with data points shown in U.S. dollars. The chart has been sorted so that the biggest countries are at the top and biggest industries are on the right. The top 10% of country/industry intersections have been shaded in green.

In Figure 1, a cluster chart of industries and countries, it’s no surprise to see the green area in the top right hand corner, showing the largest verticals in the largest country markets. Moving down, or left in this chart, shows the outliers, the smaller markets. For any of these to make it into the top 10%, there has to be something interesting about these markets. A couple are highlighted for later analysis.

Both examples trigger thoughts about the economy. Mining support service activities, for instance, are likely to be related to the large commodities industry in Chile. Is construction of roads and railways in Brazil just a blip triggered by the World Cup and the 2016 Olympics, or a long-term feature of the market? The chart can raise such discussions.

A data set of 6,000 data points is far too much detail for most planning tasks, but it is easy to simplify the data by aggregating the verticals into the higher level industry groups of interest, then only the countries of interest. 

Country summary

Country managers might want to see a simpler view of country data and target industry sectors. Figure 2 shows data for Argentina, based on the same data as Figure 1, but only 50 of 111 industry sectors have been selected and grouped into five segment definitions used by the company.

Choosing sectors that match a company’s definitions is easier with 111 sectors. As shown, local currency can be used; in this case, Argentinean pesos. Forecast industry growths are shown for 2014-2015. Information in Figure 2 will allow the country manager to think about how to deploy resources. The goal is to allocate people and budgets into the right areas.

Country managers can add value knowledge of the local buying cycle, which can define roles for the in-country team.

In Argentina, automotive is second only to machinery but has the highest growth, so it seems likely to be important in the plan.

The same dataset for country managers will match the numbers shared with industry managers. 

Industry summary

The industry managers will require a similarly simplified set of charts, in this case showing the industry segment across the target countries in Figure 3. To compare across different countries, U.S. dollars are used, rather than operational currency, to make it easier to compare absolute sizes. Currency changes can affect growth.

The automotive sector in Argentina, in Figure 2, is one of the larger sectors, with large growth. In context of other countries, it has lower growth than some and is a relatively small overall opportunity.

So it’s going to be hard for Argentina to be a special focus for automotive initiatives. But the growth is high enough, and compared to other sectors in Argentina, a set of automotive industry initiatives focused on growth would make sense for Argentina.

Size and growth

To manage resources across the target industries and countries, it would be helpful to look at another view of the data. Figure 4 shows the same set of data but calculated as a proportion of the total market under consideration.

Data can be used to consider headcount allocation in proportion to the size of the opportunity. Suppose history and current thinking on budgets and headcounts lead to an expected total of 10 in-country sales and marketing heads. By proportions, a reasonable expected allocation might be four or five in Brazil and two or three in Mexico.

A variety of reasons could change the optimum headcount allocation, among them the additional resources required when starting in a country or vertical. Numbers here say where the target is, but the profile doesn’t suggest how to get started in a market. Local knowledge and experience can help.

For this business, Mexico, Portugal, and Spain are the established markets; Argentina and Chile are profitable at a low level, with business handled through resellers; and one of this year’s corporate objectives is to build on last year’s creation of a direct sales operation in Brazil. As a result, there is a ring-fenced corporate budget for Brazil, so 10 people are allocated to five other countries.

Looking back at the global overview, it showed one of the global anomalies was "Mining support service activities" in Chile—in the top 10% of technical applications software markets, even though globally this is a small sector, and Chile is a small country market. So the 1% figure for machinery in Chile should trigger some questions. Does this include mining support services? (The answer in this custom definition is "no.") This in turn should trigger some action-for example, pick up the phone and ask the reseller in

Chile about the scope of companies they target in the machinery sector; whether the mining service companies are significant; whether they get visits; trade shows attended; and so on. The important point is that the numbers can trigger this sort of action and can help the people who drive the business to see all the opportunities.

Alternatively, the company accountant might wonder why Chile is any concern with a 2% overall market share.

Figure 5 shows the same data, with the growth of 2015 over 2014, with growths calculated in operational currency. This shows why Chile is interesting: it’s small but also the fastest growing in all verticals. The person responsible for sales in Chile will want sales resource and marketing support tuned to new opportunities.

In contrast, the situation in Portugal is different. Automotive is shrinking, there’s not much growth in consumer goods (the lowest growth in four of the five sectors), so the priority for Portugal will be more defensive, perhaps sales and marketing initiatives designed to extend the footprint in existing accounts. Portugal machinery has the leading growth in Portugal, perhaps one to focus on. 

Segment classification

Size and growth both figure in when allocating resources. Requirements differ for different segments.

Figure 6 plots the 25 segment/country intersections by size and growth. The data points have been made anonymous so preconceived ideas about the industries or countries are avoided.

There are some clear groups of opportunities. Large, fast-growing opportunities are on the right; a group of small and fast-growing segments are at the top; and a set of small, slow-growing segments may need individual attention. 

Resource allocation

Figure 7 adds information and market-size percentages. It is easy to see why there is a corporate drive in Brazil, with all those green sectors; and consumer goods and the Portuguese office will face the greatest challenges. These could affect resource allocation either way, adding resources to improve the situation or deciding to withdraw from that market.

In the scenario provided, the corporate initiative to get started in Brazil means there’s a branch office there, with five sales and marketing people in place as part of the corporate Brazil launch strategy. There’s no need to justify them in the budget, just point them to the right industries.

If five persons in Brazil cover 45% of the market, the budgeted 10 persons must cover the remaining 55% of the market. Doing the calculations translates to three in Spain; one for automotive, one for machinery, and the third for the other sectors. Three are assigned in Mexico; two on automotive, the third handling the other sectors. In both countries, Mexico and Spain, there are several large and fast segments—the ones shown in green in the chart.

Because Chile has such fast growth, you may decide to justify one dedicated person, but not the overheads of a local office. This would probably depend on corporate strategy; given these numbers it looks as if a head-office person with a budget to recruit, train, and support resellers in Chile could be a reasonable approach.

This covers all the fast growing markets, large and small, but the pattern of the markets that need attention, the red ones, forces attention toward business in Portugal and to the consumer goods sectors.

Assuming continued attention to Portugal is needed, perhaps one person there could focus on machinery only, leaving two persons to cover Argentina, but there’s not much to justify them spending time on consumer goods; the consumer goods sector will need to rely on the corporate initiative in Brazil.

This data analysis provides an initial answer to the headcount question. Next discussions might focus on budgets, if people are needed in-country or if some of the roles should be head-office industry specialists. Big data analysis provides evidence-based decisions.

Dan Roberts is senior consultant with Cambashi. Edited by Mark T. Hoske, content manager, Control Engineering, CFE Media,


Key concepts

Data analysis about product development can help with resource allocation.

Data can be divided by industry and country.

Allocations based on actual data can support other evidence gathered.

Consider this

Is your company allocating limited resources based on hunches or making decisions supported by actual data? 

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