RE: Request to remove Information
The outsourcing problem is a real mess, and it is a complicated
situation.
Top management has large incentives for quarterly performance. One
sure-fire way to improve that rapidly is to cut labor costs. Even if
the design quality is below what is needed, and staff back in the U.S.
have to spend extra time reviewing, correcting mistakes and retesting,
the short-term effect on stock price is positive. In addition, the
board of a corporation has a legal responsibility (in the U.S.) to their
stockholders to maximize earnings by any legal means. Management is
behaving exactly the way they should, given the structure of their
incentives and their legal responsibilities to shareholders.
One could argue that in the long run, the company would be better served
to develop a staff that knows the company's goals, knows it internal
processes and can get a design right, or darn close to it, the first
time. That requires a long-term investment today, and probably five
years before you'll see much return. With stockholders emphasizing
short-term performance, and the fact that most CEO's can't expect to be
in their positions for that long, it would be absurd to expect them to
act differently than they do.
Interestingly, Intel's technology center in Bangalore is an example that
combines both short-term and long-term views, and shows why that doesn't
happen here. ASIC design is a particularly expensive endeavor. What
Intel is doing in Bangalore is to develop exactly the type of design
infrastructure I described but with the specialized labor only costing
10-20% of what it costs here. That huge gulf in wages, along with the
generous support of the Indian government, allows them to make a
long-term investment with relatively low risk. Simply put, their board
would not likely approve such an investment in California, Oregon,
Arizona or Texas due to the much higher cost and the resulting longer
time to recoup their investment.
However, the dirty little secret is that this is chump change when
viewed from their overall cost of operations. As this is mostly a
software list, I'll risk telling you something you may already know: it
takes USD$3-5 billion (5e-9) and around four years to bring a new
silicon foundry online. A mask set (tooling expenses) for a submicron
IC starts at USD$500K and often tops USD$1M. Processors sell for tens
or hundreds of US dollars each. The design labor is not a large
percentage of the total product cost.
So why all fuss to squeeze every last bit of cost out of it? I believe
there are two primary factors. One makes sense in our capitalist
economic system, but the second does not. The obvious and defensible
reason is the imperative to reduce costs that I mentioned above. That
is the result of our economic system and the operation of the stock
market. The second reason has nothing to do with economics and is
therefore harder to remedy. Top management of our largest companies,
usually lawyers or accountants today, personally believe that technical
personnel DO NOT DESERVE the same compensation as managers because they
are not as important to the success of the enterprise. The results of
that view works against their own economic interest, but like most
prejudice, it is neither borne of knowledge nor wisdom.
One mid-sized electronics company I worked for got a new CEO who was an
accountant from the construction industry. He had no concept of what
the technical staff did nor what we contributed. It really bothered him
that engineering managers and many engineers had private offices with
windows that looked out over the beautifully landscaped corporate
campus. We felt the working environment was a significant bonus that
kept many of us loyal to the company. The CEO felt this was a wrong
that he had to correct. He then spent USD$1.5M to buy cubicle furniture
and moved the engineering staff to interior space in the plant. Because
the company had no further use for the offices with windows, they were
filled with cardboard boxes and used for storage. I don't have to tell
you how this affected morale.
This ridiculous waste of money is an example of the deeply held
prejudice of many people who make financial decisions today. They know
they need technical talent, but consider technologists as a commodity.
In contrast, they view people with MBA's as smart, hardworking and
deserving far more than what the company can pay them. My personal
belief is that this worldview is more responsible for our current
outsourcing woes than the original economic reason.
Here's a further example of this bias. Once as an engineering manager,
I reported to a marketing product manager. When I asked my new boss why
the marketing staff, without graduate training and little experience,
was paid considerably more than my engineers, some of whom had PhD's and
decades of experience, here's what he told me. "Management personnel
are rewarded in expectation of achievement, while technical personnel
are rewarded only after demonstrated achievement." While my blood
boiled, I paused to think, then asked why. He replied, "I guess it's
harder to find good managers than good technical people." He honestly
and sincerely said those words to my face. Believe me, I couldn't make
up something that stupid if I tried.
Please don't make the mistake of ignoring what we are dealing with. We
can't fight this prejudice with our eyes closed.
--
Seth Goodman
> -----Original Message-----
> From: Weissgerber, Tom L [mailto:tom.l.weissgerber@intel.com]
> Sent: Friday, November 11, 2005 10:43 AM
> To: debian-user@lists.debian.org; Weissgerber, Tom L
> Subject: Request to remove Information
>
>
> Debian,
> The following information should not have been made available
> to the entire public domain. Please remove the following
> links/files at your earliest convenience.
> Date: Wed, 24 Sep 2003 10:57:42 -0700
> Message-id:
> <1B954E6DDFED0D41957388EB06FCB1D202CB9CC5@fmsmsx402.fm.intel.com>
> In-reply-to:
> <1B954E6DDFED0D41957388EB06FCB1D202CB9CC5@fmsmsx402.fm.intel.com>
> Message-id: <200309260552.13250.carla@bratgrrl.com>
> Old-return-path: <carla@bratgrrl.com>
> References:
> <1B954E6DDFED0D41957388EB06FCB1D202CB9CC5@fmsmsx402.fm.intel.com>
> Reply-to: carla@bratgrrl.com
>
>
> Regards
>
> Tom Weissgerber
> Intel Corporation
> Validation Tool Development Manager
> 916-356-5339
>
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