Where’s the Cost Savings?

I interviewed for an on-site System Admin job within The Company the other day. It is kind of humorous because before Project Skinny, we had such a team. However, company executives desperate for their bonuses at cost cutting wiped out said team in favor of sending more work to Brazil or India. The fact that all of the servers would be remaining on-site (either here or in one of our other locations) was no consideration. The executives decided that the number of times an SA would be needed for hands-on stuff would be few and far between. So they contracted the work out to some 3rd-party vendor with a 4-hour SLA to report on-site.

So when The Company began looking for their cost savings, they weren’t there. For starters, teams in Brazil, India, or wherever were taking two, three, or more people to do the same job that one American did. In some cases, this was due to the foreign managers converting the American dollars in the contract to their own currency and then hiring as many people as that would support. Thus you saw no cost savings because the same amount of money was being spent. In other cases, the problem was that there were no skilled people. As such, the “solution” was to hire more people. After all, everyone knows that four stupid people equal one smart person. What’s that saying about a room full of monkeys and Shakespeare?

If that weren’t bad enough of a slap in the executives face, they received another one from the massive Service Level Agreement penalties The Company paid out for every time they couldn’t get a customer’s servers up within the required time. Because there were no on-site SA’s and the contract company had 4-hours to show up on-site, the result became a lot of angry customers threatening to pull their business and The Company losing money hand over fist. Got to love executive thinking that can’t see past the end of their nose (and bonus) who thought, “Wow! We’ll save so much money!” when in fact, we lost money.

This brings me back around and the executives deciding that it would be cheaper to have an on-site team to handle taking care of the physical side of the SA work (which would require us to be on the raised floors). So we’ll see what happens, but if I get hired, I’m hoping that it will improve my chances of getting converted from Extended Tenure Extra employee to regular employee. The manager for this new team seemed keen to try to make that happen.

As for the overseas teams, The Company has been forced to implement rules governing how they do things when it comes to hiring (ie: if five Amercians did the work, you have to make do with five from your country and not hire 20). Having done that, The Company has been working overtime to convince every customer that can legally do so to “request” to have their stuff sent overseas. Two giant customers caved and the Indians are here working with the teams losing said accounts to learn those accounts.

I wonder how much money The Company would save by outsourcing the executive jobs to Brazil or other such place?

Reader Comments

  1. Cost savings or profits that are so desired by many companies do seem to accelerate the nation’s economic decline, as incomes and money no longer stay and strengthen within the country for its people, its population, but outsourcing in the short-term does seem to benefit businesses. In the long-term, amidst economic instability, some consumer spending is likely to decrease also. To name some current issues, slow housing market, higher rate of foreclosures, higher prices for commodities and utility bills, workers from other countries with approved visas coming in to work, and population growth plus millions of illegal immigrants sanctioned without sufficient employment opportunities for everyone are signs of much stress ahead if the capitalistic government doesn’t change its ways.

    Hypocrisy and conspiracy.

    Where’s the nationalism or patriotism from people or businesses when we really need it? Has the capitalist overtaken the nationalist? Is the nation’s people being neglected for the profits of hard-core capitalism? I often hear and find that the people sacrifice in certain ways for their national home, but never have I heard or found businesses or capitalists committing any notable sacrificial acts for their national playground. Is this nightmare becoming true or am I just dreaming?

  2. I understand the need for cost cutting. After all, I do that in my personal life at times. However, when the business of The Company seems to be cutting costs at all expense, driven in large part by executives looking to get a bonus for cutting costs, that’s where I have problems.

    Anyway, I don’t have any problem with capitalism as such per se because the alternative is worse as I see it. What may happen is that The Company will collapse and others will fill that void as happened with WorldCom.

  3. The problem that is described seem to be a product of business interests in accordance with capitalism. Business cost cutting is typical, and these days they cut even more in trying to save money. In addition, business mismanagement is not that uncommon. There’s no accountability and no sense of humanity, but a thirst for more profits. That desire for wealth or greed is the ultimate cause behind it all.

    It would seem that a logical alternative is socialism, not communism. Communism in its essence or true self is not likely to be possible, since it would be too perfect and optimistic about human nature. I think socialism is what we may observe in countries in Europe, Canada, and Australia. Socialism is capitalism in part plus a better representation for the people’s behalf rather than too much concentration on profits associated with commodities and business interests. But, who am I to criticize so…

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