Cost-cutting: Is Alfred Nobel sleeping?

Alfred Nobel's death mask. Photo taken by Hal ...Image via Wikipedia

We can keep cribbing about jobs being outsourced to India, dealing with foreign accents, etc. but the real problem lies elsewhere. Who decided that costs are the only drivers of business? Who created the call centers? Who decided that technology is a good alternative to human beings? These are some of the questions we need to answer.

When I was a kid, my Dad told me what selling was all about. “In one sentence,” he mused, “it is about selling a hair brush to a bald man and getting him to be obliged for the favour!” My take-away was that selling is the art of having your customer see value beyond the price he’s paying. There’s hardly any sales competency required if all I have to do is to lower the price. Business competencies yes, but sales competency NO. If my strategy for the future is based on the principle that my competitors will become worse and worse, then that’s the weakest basis for survival. Forget growth.

My other contention is that the cost model might still work for ‘material’ goods that are possible to benchmark by adding from raw materials upwards. How do I even figure out the BoM for consulting? That’s easy! Just take salaries of people and put it in the ‘Raw Material’ column??

So when we talk of cost-cutting, the first thing that comes to mind is to cut the salary bill. Hey that’s a pointer. Where can I get a person at one-tenth the salary so I can hire 10 people for every one person I have today. Next step, fire all the people I have today and I end up running a company 10 times the size. WoW! The mathematics are perfect and infallible.

10 janitors = 1 software professional. All we need to do now is to teach the janitors Java. Even if it took me a year and I spent another fraction on training, I would still make a higher profit. Is Alfred Nobel dead or sleeping!

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