Section SixCASE 6-1
Assessment of Human Resource UtilizationA bank has foreclosed on Core-Line Software, a software
development company. Although Core-Line has a strong level
of sales, its costs are far too high and it cannot repay its loans.
The bank had hoped to line up a buyer before foreclosing;
however, none was willing to pay the bank’s price. As a result,
the bank has been forced to foreclose and operate the
company until a buyer can be found. In order to recoup as
much of its loans as possible, the bank has decided to seek
advice on how to improve the operating efficiency of the
company. With increased efficiency, the bank hopes to obtain a
higher price. Because the bank’s staff has no experience in the
software business, it has retained a consulting firm to advise it
on how to improve the efficiency of the company’s operations.
Because labor costs constitute the bulk of software firms’
expenses, Core-Line’s utilization of human resources is an
obvious area in which to look for potential improvement. Like
most software companies, Core-Line has a full array of
specialists, including programmers, graphic artists, systems
analysts, project managers, systems architects, and the like.
The consulting firm has decided to begin by assessing Core-