Friday, June 18, 2010

You Pay Cheap, You Pay Twice

An old saying , variously attributed to each European nationality.

Except it is not true, especially in today’s wired business world.

Consider an example:

A business asks a trainee to develop a spreadsheet model; the trainee spends a month on the project, at a salary of $40,000 p.a.

A rule of thumb is to double the salary to get the full cost of employment (rents, support staff, benefits, pensions etc.) So we are talking $6,600 here.

For a workbook.

One small mistake in a formula, not caught due to a lack of formalized testing and the workbook goes out to the field and is used to give quotations to customers.

The quotes are too high (loss of customers) or too low (loss of profit and/or customers) and the business goes through a severe cash-flow crisis, if it survives at all.

That’s not “paying twice”; that’s paying with your (business) life!

Talk to Me !

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