IBM: Those 2 redundancy schemes? We need to 'improve margins' and right quick

Re: @AC ...

You do realize that your manager who you think is getting a bonus, isn't.

He does not. Two levels above him - where this sh*t is really decided - everyone does. An bonus for fulfilling the "improved efficiency" part of their personal objectives.

Re: @AC ...

"You do realize that your manager who you think is getting a bonus, isn't."

No prizes for guessing who doesn't have a real job in this thread.

Re: Golfogarchy

all those 'little people' who resemble the gophers the grounds keepers vigorously exterminate.

Now that you mention it, events of late at IBM do resemble Bill Murray's contribution to Caddyshack.

Re: Cut staff levels to zero for maximum profit with no costs!!

"There are few who receive the seriously big money (and fewer actually EARN it) so cutting exec's salaries would help but probably not as much as some think."

However, 1990s management think was that reducing the number of levels and pushing decision making authority down vastly improved work done to headcount ratio. By being close to the customer you get productivity benefits which outweigh the cost of the management needed to offshore.

To make it work, though, you need top level managers who are not all part of the same golf or country club set. This may go some way to explaining why British companies suddenly do better when foreign management takes over that isn't part of the mutual backscratching fraternity.

Re: Cut staff levels to zero for maximum profit with no costs!!

but why 80% ? why not 85% or 90% ? Or are we only aimimg for 80% customer dissatifaction?

Re: Cut staff levels to zero for maximum profit with no costs!!

Having been there in a previous life the cutting of the senior exec ranks will generate more benefits than just the salary costs. It will improve the effectiveness of operations and make them more innovative. Here are just 2 examples of what I mean.

1) Big restructure in the risk management side of the business where they essentially removed the function. Of the 600 people doing the function it went down to 60 of which 40 were doing reporting in India and the rest were, you guessed it, the managers. As a result there was no one left to do the risk review but plenty of people to report up (hence the need for so many senior execs - someone has to read all those reports) so delivering services to the client went down and the reporting went up. How is that for efficiency?

2) All the senior execs were making changes to their businesses to become "Agile" so what did the head of the PM profession do to be also seen to be making his area more agile? He took away the need for Project Managers to re-certify after they had done it once. Simple solution wasn't it and it saved costs as well! The problem is that Project Management had been seen as a profession within IBM but to be a professional you are supposed to keep up with the latest in the industry and keep getting experience. The moment this was brought in the existing Project Managers just stopped doing education (another cost saving!). The situation was made worse by management then pushing certification quotas so people who were not PM's were pushed through the certification process. While it saved costs it has decimated the pool of experienced PM's which has led to a reduction in delivery capability.

In terms of not making money when the 80% of staff are sent offshore isn't quite correct as the strategy is to automate most functions and this is already happening. In the automated AI future those jobs will no longer be needed. I think IBM's strategy is correct and needed if they are to exist in the next 10 years but the one flaw it has is that they are keeping that middle layer of senior execs who only really read reports and then generate new ones. That is why they need to start culling at the top and not just at the bottom.

Re: Cut staff levels to zero for maximum profit with no costs!!

>That's never true, they outsource things that they simply cannot be arsed to do themselves, and they don't care if the resultant service is poor.

I won't downvote you but I disagree with this statement. IT departments cost a lot of money, including the people who work in them. None of that money can be directly correlated with the profit that the organisation makes as a whole. Unless the organisation has IT as its core business, IT is just a necessity, just like payroll is. Outsourcing will move the cost to a service purchased by the organisation just in the same way many companies lease their premises.

Of course, any bean counter with common sense will know that if this still costs the same as it did when it was in-house then it's a waste of time, especially as the act of changing costs money too. Yes, their bonus may depend on reducing cost A and the increase in cost B may not have an effect, but you also have to remember that the outsourcer has a team of salesmen whose job it is to convince people that it's a very good idea. IBM of course have large teams of experts, who can perform tasks quickly and efficiently. I know this because I used to be one; some engagements I was sent on, which were scoped at weeks of work I ended up finishing in a day, having spent a morning writing a few hundred lines of code to do the work for me. They will also have the skills to consolidate and optimise the environment so it runs efficiently.

Convincing argument, and this is how it should be. The reality is most of the skilled people have left and those that are still there (and there are plenty) are overworked and do their best to move into less-skilled sales roles where their potential isn't used, but they are paid more. The efficiencies never take place, so the menial tasks are just shipped off to someone who costs less but doesn't care if everything breaks.

The customer does think that things are being improved by doing it this way though.