Presented by Group 5:
Matthew Shpolyanski
Hovig Keushkerian
Abdullah Alkhiliwi
Abdulaziz Alassaf
What is Synergy?
The word synergy is derived from the
Greek word “synergos”, which means
“working together”
 Synergy refers to the ability of two or more
units or companies to generate greater
value together than they could working
apart.

Abdullah Alkhiliwi
Synergy in Everyday Business

We’ve found that most business synergies
take one of six forms :
1. Shared Known-How
2. Coordinated Strategies
3. Shared Tangible Resources
4. Vertical Integration
5. Pooled Negotiating Power
6. Combined Business Creation
Abdullah Alkhiliwi
Case Study:
The Synergy Tower:
Merging Advanced Workplace Strategy with High Rise
Design



Synergy is being integrated in architectural design
Designers see direct correlation between floor plan
and facilitation of synergy
Floor plan actually encourages workers to mingle
with one another
 Open spaces allow quickly shifting between work modes
Hovig Keushkerian
Case Study:
The Synergy Tower:
Merging Advanced Workplace Strategy with High Rise
Design
Concept of synergy in the workplace is
beginning to be incorporated into the
planning stage of a business model.
 Enhanced by advent of cloud computing
 All possible avenues of communication are
being incorporated into future floor plans

 Effective, flexible, and agile communication is
key to having synergy among workers.
Hovig Keushkerian
Synergy in the Workplace

One of the difficulties that firms are facing
is internal conflict between departments
and business units.

The sales and the credit departments rank
high in these internal conflicts
Abdullah Alkhiliwi
Synergy in the Workplace (Cont’d)

A business organization can be compared
to the human body.
 If one function of the body fails due to some
injury, the entire body might suffer.

When people work in teams their work is
distributed
 Better results are experienced in both short
and long time period
Abdullah Alkhiliwi
Synergy in the Workplace (Cont’d)
CEO

UpperMGMT
LowerMGMT
Team
leaders
Workers
In sales oriented organizations where goals
are allocated and teams are formed, a level
of synergy should be maintained between all
employees.
• All of them have to work together in order
to achieve the desired target.
Abdullah Alkhiliwi
Budget/Resource Allocation:
Managing Risk
Risk management is an essential
attribute of the work in all financial
markets.
 It is impossible to stay on the market
without good money management.
because it is important to reduce risks
on each deal for successful trading.

 This will help not only to save the own
money, but also to increase their quantity in
several times.
Abdulaziz Alassaf
Managing Risk (Cont’d)
The art of getting and increasing
income (gain, profit) in the uncertain
economic situation are focused at the
core of risk management.
 Risk management is a system of
management which covers economic
and financial relations arising in the
process of the governance.
 Risk management includes the strategy
and tactics of control, while it also
greatly influences on budgeting and
resource allocation.

Abdulaziz Alassaf
Managing Risk (Cont’d)

In risk management, receipt of sufficient
and reliable data in terms of existing
situation plays a major role, as it allows
managers to take a concrete decision on
the actions at risk.
 Risk is an integral part of activity in any
company.

That is why one of the key conditions of an
effective budgeting system is its global use
in conjunction with the elements and
procedures of risk management.
Abdulaziz Alassaf
Managing Risk (Cont’d)
As an application tool, budgeting is
intended to provide more effective
financial and economic activities through
the adaptation and optimization of
management processes.
 Risk management starts with the
identification and evaluation of all possible
threats that the company faces in its
activities.

 The key point is the definition of limiting
external factors which include market size,
scope of supply, consumer behavior and
demand in budgeting.
Abdulaziz Alassaf
Allocating: Planning

Planning
 provides a way of identifying specific objectives
and analyzing all the alternatives ways and
methods of facing projects.
 Most important part of resource and budget
allocation
 Without a sufficient plan, the risk of wasting
money and materials increases highly
○ Not only are money and materials wasted but
also time (time value of money is the most
important part of engineering economics).
Matthew Shpolyanski
Allocating: Forecasting

Forecasting
 a scientific approach where a company would
take its systematic data and choose whether
or not to make a decision based on that data.
 6 Elements of a good forecast : Timely,
Reliable, Accurate, Meaningful, Written, and
Easy to use
 Used to: estimate costs/profits, pricing, cash
flows, funding, new products, services
Matthew Shpolyanski
Allocating: Forecasting (Cont’d)

Exploratory Forecasting
Taking data that occurred
and manipulating it to
make it a formula/equation
to make a logical decision.
 Less risker technique to
use than normative
forecasting


Normative Forecasting

The technique of “shooting”
ahead of time, envisioning a
product that will most likely be
successful and go back to present
time
Only invest if pay-off will be high

Quantitative forecasting helps create mathematical formulas to help companies
see how much they will most likely spend and keep track of any trends, cycles,
or seasonal variations if there are any.
Matthew Shpolyanski
Strategies of Allocation
Another technique of efficiently allocating
money and materials is by applying the
company’s MARR into alternative
methods/scenarios.
 There are many mathematical techniques like
present worth analysis, annual worth
analysis, and rate of return analysis to help a
company estimate how much they would
need to spend or invest.

Matthew Shpolyanski
Budget and Resource
Allocation Case Study:
The Failure of Zune
An example of the
consequences of poorly
allocating money and
resources is Microsoft’s
Zune.
• Instead of being
innovative or inventive,
Microsoft decided to
“reinvent the wheel” by
creating a media player
very similar to the IPod
• With poor planning and
forecasting, Microsoft
didn’t realize the
consequences of running
against Apple’s IPod
•
2007 Survey done by the Wall Street Journal
Matthew Shpolyanski
Controlling Strategies of Allocation
Controlling is a managerial tool which, if
applied correctly, tells all levels of
management the efficiency, quality, and value
of a particular aspect of the business
organization.
 In regards to resource and budget allocation,
controlling can be broken down into four
distinct phases:

I.
II.
III.
IV.
Establishing a MARR
Measuring Performance
Evaluating the Process
Maintaining the Effective Process
Hovig Keushkerian
I. Establishing a MARR

When allocating resources to processes in an
organization, a Minimum Attractive Rate of
Return (MARR) must first be established.
 The MARR is a figure which is calculated by
planning, forecasting, and risk management
components of decision making according to each
process in an organization.

MARR gives management a benchmark to
which it can compare the real return on its
investments.
Hovig Keushkerian
II. Measuring Performance

Success cannot be determined unless it is
measured.
 Achieved by excessive documentation control
 Showing the rates of return on investments in
processes
○ Financial Ratios
○ Financial Statements
Hovig Keushkerian
III. Evaluating the Process
Data must be evaluated in order to tell
management how effective they were in
the allocation of resources and budgets
 Methods of Evaluation

 Audits
 Checks and Balances
 Validation of Books
 Ledger Control
Hovig Keushkerian
IV. Maintaining the Effective Process

Most difficult step of Controlling
 find a better strategy to allocate resources vs.
trying to use a particular strategy constantly
Uncertainty and Dynamic Nature of Work
means strategies must change as well
 Managers must be vigilant in the pursuit
of newer and better solutions to ensure
some sense of continuity

Hovig Keushkerian
Conclusion

Synergy and Strategies of Resource Allocation
can be intertwined.
 Allocation Strategies cannot be employed effectively
if there is no Synergy

Resource Allocation Strategies cannot be effective
if they are not derived from data that is





Proposed by Methods of Forecasting
Organized by Planning
Evaluated by Risk Management
Measured and Maintained by Controlling
Minimizes Input while maximizing output of
production processes
Abdulaziz Alassaf
Q&A
Questions?
Comments?
Concerns?