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Special report: Resource allocation tools

This 32-page special report contains content produced specifically for chief financial officers (CFOs) by The Corporate Executive Board, which is a US-based membership organisation for top executives in major corporations, and which has recently opened an office in the UK.

We identified the CEB's report 'Tools to support line business decisions' - specifically, the large chapter on 'resource allocation tools' - as being of potential value to our members: the increase in decentralised decision-making authority has placed greater pressure on finance functions to establish guardrails that guide resource allocation decisions. Leading companies are embedding tools to assist line managers in better prioritising existing projects and in evaluating crucial third-party opportunities and relationships prior to investment outlays.

The CEB has kindly given us permission to publish this. By arrangement, the technical content is reproduced exactly as published by the CEB - thus the core text contains American spellings and is laid out differently from the Faculty's usual special report format.

The aim of the original document was to help CFOs create business decision tools that can be given to line managers to embed financial rigour in key operational and strategic decisions. The document includes templates, checklists, and process maps comprising tools for market evaluation, strategic planning, and acquisition and alliance - as well as resource allocation tools which are the subject of this Faculty report. The tools shown here have been drawn from actual company examples and were collated by CEB researchers from internal company presentations and documents that were reviewed as part of the effort to identify the most effective tools and templates in use within the CEB membership.

The resource allocation tools highlighted in this report are not theoretical ideas but tools that are used in other businesses - in fact, they are practical tools that members can implement. Some tools may be new to you; others may be known to you but may offer further insights. We hope that these ideas will be of practical use.

Published by the Finance and Management faculty (SR12 - June 2006)

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