Fog Creek Software
Discussion Board




Valuable contribution to project ?

Following on from muppet's "unchecked capitalism" comments, I wondered if anyone would care to relate stories of expensive consultants who actually did a good job.

We all know a million stories about expensive people who did a poor job then had it away on their toes, but it can't always be like this. Can it?

Nemesis
Friday, August 27, 2004

Greed is never a good thing.  Period.  Do you honestly believe that in the grand scheme of life, a few lines of code, however brilliant and well-placed, are really worth a half million dollars a year?

Garbage men perform and INDISPENSIBLE and highly unpleasant service to the rest of society.  They're certainly not paid on the basis of utility.  Why should you be?  Oh right, because you're making somebody money.

muppet
Friday, August 27, 2004

"Greed is never a good thing." I agree with you muppet, but this thread is meant to be about the positive aspects of such situations, if any.

Nemesis
Friday, August 27, 2004

And my argument is that there aren't any.  Even if you're spectacular and do a fantastic, unduplicatable, uniquely splendid job:  it's still not worth what you're getting paid.  Society can't keep bearing the burden of all this huge-deals-over-lunch nonsense.  Corporations are the fuedal lords of the current day.  Eventually they'll go the same way.

muppet
Friday, August 27, 2004

A few lines of code could save one of the mars probes. Another few lines can save your life if you're on lung-machine.


Friday, August 27, 2004

> Eventually they'll go the same way.

And get replaced by what?

That I would really like to know.

--
ee

eclectic_echidna
Friday, August 27, 2004

Once we hired a consultant to discover/specify/document the requirements of a custom financial system for our client. He had a background from economics and few years of IT project experience. However his IT skills was low he made a *f..king* good job about where to focus in that financial system, what is possible/not possible, offered solutions for the client and made the client extremely happy. The client was a financial institue, so I was glad we hired this guy and that we didn't use some internal people to do this specification.


Friday, August 27, 2004

It depends on what you think is overpaid. A company has an overhead rate that they have to apply to your salary to cover it's costs. If you make $80k per year that's about $40 per hour. But the company's cost structure is at the very least 2.5 times your base. In some where I've worked it has been greater than 4x. In fact an overhead rate of 2.5 is almost unattainable for all but one or two man operations. Chances are they have to generate about a quarter million in order to keep you employed at $80k.

So if they are paying a consultant anywhere from $120 to $160 per hour it's no more than you are costing them. Therefore their contribution does not have to be any more valuable.

There's the added plus from their perspective that this is a one time cost. It matters that they don't have to keep him/her around full time. It's like paying a bit of a premium for a "disposable" portion of the workforce.

Then there's the perception that a specialist consultant brings some expertise to the table which is not available in-house, so they may be willing to pay even a bit more for that. That may bring the price up to $200 per hour without it being considered overpriced.

Whether they add value comensurate with what is being paid out, is up to the hiring manager to determine. And since he isn't usually going to admit he made a mistake in paying a bozo more than he was worth, he'll say the guy did great. If you don't like it, tough apples, it ain't your call.

old_timer
Friday, August 27, 2004



Actually muppet, the last time I checked, garbage men make pretty good money.

It's because they're needed and people don't want to take the jobs.

KC
Friday, August 27, 2004

Greed, for lack of a better term, is often a good thing and a prime example is the situation that Gordon Geckko was talking about in the movie "Wall Street".  You have a situation very similar to the one Muppet complains about, i.e. a bunch of entrenched idiots in positions of power doling out cash to (in this case themselves) with little regard to whether it provided value to the shareholders of the company.

The "greed" of the shareholders and the takeover artists is what fueled that craze in the 1980s and swept away, in a very short time frame, that situation in innumerable companies in the real world.

As to the point about garbage men, a group of ivory tower scholars could argue forever about the "utility" they provide to society and write papers with complex formulas to decide what garbagemen should be paid.  The fact is that these kind of central planning systems do nowhere near as good a job of distributing resources as the price system with supply and demand.

You offer garbage man jobs at $4.00/hour and find that only ten people in the city are willing to do the job, not nearly enough.  At $25/hour you find you have enough people willing to do the job so that's what garbageman pays.

name withheld out of cowardice
Friday, August 27, 2004

"Actually muppet, the last time I checked, garbage men make pretty good money."

And unlike muppet, they can't "pretend" to be picking up the garbage when their manager walks by.

king of garbage
Friday, August 27, 2004

There are 2 feudal overl-lord systems that I can envision:

1. Corporate. (sterotype: Country club Republican)
2. Governmental. (stereotype: Tip O'Neil Democrat)

Perhaps a 3rd:
3. Technocracy. (stereotype: Bill Gates)

Some would argue that 3 is really a class of 1 - and I would agree.  It merely describes the difference between benevolent gentleman vs. slaveholder. (I am no Bill Gates/MSFT fan, prior posts have born that out, but with respect to this thread he fits the 'bill' perfectly: emphasizes good employee benefits and as supreme benevolent dictator thinks he friggin knows everything).

Well, 3 was a diversion, there really is just 1 & 2.  And as ee said, if '1' is not your cup of tea, what does it get replaced with? '2'?

Imagine big brother, except the more moder version has Hillary Rodham Clinton's face and voice on it.  How'd you like to go home to hat every night?

hoser
Friday, August 27, 2004

"Garbage men perform and INDISPENSIBLE and highly unpleasant service to the rest of society.  They're certainly not paid on the basis of utility.  Why should you be?  Oh right, because you're making somebody money."

My neighbor is going to quit his job at a mechanics and join Waste Management, driving garbage trucks.  The people that have been doing it the longest are making up around $90k/year.

They do quite well for themselves.

Andrew Hurst
Friday, August 27, 2004

> Do you honestly believe that in the grand scheme of life, a few lines of code, however brilliant and well-placed, are really worth a half million dollars a year?

I'm sure of it.

You may be exagerating to say "a few lines of code" (I write more than "a few" lines of code in a year), but I know that the last product that I helped to write (fax server software) was being sold to third parties (companies and telcos who wanted to use it) for more than a million dollars per year.

Christopher Wells
Friday, August 27, 2004

I agree with Christopher Wells. 

In fact, if you don't think that the thousands of LOC you write each year are worth about 2.5x your salary, then you probably aren't being challenged.

I'm probably repeating myself, but about 10 years ago, our director of engineering was doing his management by wandering around thing.  He stopped in and said "uh-huh, do you realize that it costs $250K per year to keep you here? The floor space, the capital, the benefits. So that means, you have to generate that much work each for this company just to break even."

It went something like that. It was a hardware company, so cap-x was perhaps higher than most of us are used to.  The point he was making remains valid.

hoser
Friday, August 27, 2004

Back to the original question, I have had positive experiences with expensive consultants...unfortunately they were network and systems guys, not software developers, but they did a great job helping to build a corporate network spanning multiple regional offices across the states. 

Likewise, at my current position, we've moved away from using the "guy so-and-so knows who can do it cheap" and up to using professional consultants, because the bang for the buck is *much* higher -- they do higher quality work, in a shorter period of time, and are a hundred times more accountable when things go wrong.

Joe
Friday, August 27, 2004

==>Greed is never a good thing.  Period. 

I disagree with the premise.  Period.

==>Do you honestly believe that in the grand scheme of life, a few lines of code, however brilliant and well-placed, are really worth a half million dollars a year?

Yes. If someone's willing to pay it.

If my assembly line is down, and it's costing me 5 million bucks an hour, but noboday can figure it out and you come in with some well placed, brilliant mods to the line's controlling software that allow me to bring it back up, forget a half million dollars a year, I'll give you a half million dollars for the afternoon it took you to do the job.

And I'll be damned happy to do it too!

Sgt. Sausage
Friday, August 27, 2004

As an I.T. consultant, i take out the trash... the techno trash.  Lest you think it is a glamorous computer science research position, it is NOT.  It is cleaning up heinous messes a lot of the time.  Thank goodness I got a fine art degree and not a CIS degree, or I'd be insane. I will point out that we also don't bill for every hour that is spent working (i.e. on fixed price contracts). 

devinmoore.com
Friday, August 27, 2004

The fact is that your assembly line going down SHOULDN'T BE costing you 5 million dollars an hour.  You have no business making 5 million dollars an hour, be you a person or a corporate entity.  Society is a horribly fucking broken system.  That's what I'm getting at.  Idealistic?  Sure!  But idealism sure beats complacency with a capitalistic rich-get-richer, poor-get-fucked de facto aristocracy.

muppet
Friday, August 27, 2004

5 million dollars an hour is about 3 billion dollars per month: about the value of the oil in 3 oil pipelines.

Imagine I find a way to half the production cost of obtaining and distributing oil: my ability to do that would earn me a large share of the world's oil market. In which case, why shouldn't my line going down cost me 5 million dollars per hour?

To give another example, AT&T's revenue from business and residential customers in 2003 was $33 billion, i.e. $5 million per hour. So $5 million per hour is about what it would cost them if their network went down (or it might cost them more, as it would cause them to permanently lose customers who would switch to a more rliable provider).

Christopher Wells
Friday, August 27, 2004

"The fact is that your assembly line going down SHOULDN'T BE costing you 5 million dollars an hour.  You have no business making 5 million dollars an hour, be you a person or a corporate entity."

By who's rules?

It sounds completely arbitrary to me.

My stepfather works on an assembly line... whenever it goes down, everyone stands around outside on "break", but it's not technically break.  Then they have to call in the repair guys.  If it's down for any period of time (a few hours), they have to delay shipments.  If it's down for a *long* (a full day), they could easily run into breach of contract clauses.

KC
Friday, August 27, 2004

I'm a software development consultant, and I try to provide valuable contributions.  I also try to be expensive, as I find I'm much happier at clients that are paying me well to contribute than clients that pay me less to contribute less.

Hockey Player
Friday, August 27, 2004

"The fact is that your assembly line going down SHOULDN'T BE costing you 5 million dollars an hour"

When I was in college I worked as an intern at one of the major auto makers for a summer. This was probably before muppet was born, but as I recall the cost of stopping an assembly line was about $25000 per minute. So stopping one of those lines only cost $1.5 million per hour, but that was a long time ago.

Anony Coward
Friday, August 27, 2004

My point wasn't that it doesn't happen, it's that it shouldn't.

muppet
Friday, August 27, 2004

What would be better alternative than having AT&T's network being worth $5 million/hour?

Christopher Wells
Friday, August 27, 2004

One thing that a lot of people forget is that "economy of scale" is not singular but plural: "economies." The fact that AT&T has this huge network means that phone service is really quite inexpensive. However, that network can't exist without millions of subsribers and that translates to a revenue stream that sounds obscene. In reality, the profit margins are probably not any better than in any other business, large or small, and the larger the company, the more people are taking a slice of the profit. I suspect that everything actually balances out pretty nicely, although there are a few lucky individuals who are able to justifiably tie their own compensation directly to the value of the network.

Ron Porter
Friday, August 27, 2004

Are you having money problems or something muppet?

Feeling slightly sorry for muppet
Friday, August 27, 2004

Feeling slightly sorry for muppet:

Do you have family problem or something?
Mom-dad!

Feeling sorry!
Saturday, August 28, 2004

Don't worry muppet, some people know what you're saying. I think that includes one or two that are vehemently disagreeing with you.

What the hell are we supposed to do about it anyway?

You must ignore it and just live... stay sane. It isn't as if anyone can change anything about it.

I am not muppet
Tuesday, August 31, 2004

*  Recent Topics

*  Fog Creek Home