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- Path: sparky!uunet!digex.com!prb
- From: prb@access.digex.com (Pat)
- Newsgroups: sci.space
- Subject: Re: fast-track failures
- Date: 30 Dec 1992 16:58:03 GMT
- Organization: UDSI
- Lines: 53
- Message-ID: <1hskerINNj0b@mirror.digex.com>
- References: <ewright.725152007@convex.convex.com> <1992Dec27.160134.20228@ke4zv.uucp> <ewright.725665391@convex.convex.com>
- NNTP-Posting-Host: access.digex.com
-
- In article <ewright.725665391@convex.convex.com> ewright@convex.com (Edward V. Wright) writes:
- >In <1992Dec27.160134.20228@ke4zv.uucp> gary@ke4zv.uucp (Gary Coffman) writes:
- >
- >>$100,000 a year is on the low side. Most companies figure it's
- >>closer to $250,000.
- >
- >The ones that are no longer in business.
-
- Um, gee here's a good one for me. STicking up for gary. Actually both of
- gary's numbers are quite reasonable. sad but true. what he isn't
- pointing out, is that these numbers are more for large organizations and
- especially defense related business.
-
- now the accounting rule of thumb for commercial business, is that each of your
- people better generate 2.5-3 times their salary in revenue, or you aren't
- making money. in defense industries, it is not unusual for
- overhead to exceed salary in an order of magnitude of 7. example.
- i have seen projects where two engineers worked, on a prototype,
- they were each paid about 40k/annually, but the project bills
- would run about 15k/week. amazing what the overhead can run.
-
- Now what gary is missing is that thin slim organizations can run for
- significantly less. Apple, started this way. cisco did too.
- Lockheed skunk works still tries to. but this is for small operations
- only. My dad used to run a 20 man shop on 2,000 month overhead plus
- salaries.
-
- >
- >If we spent that much on each employee, personnel costs would exceed
- >gross revenues. And that allows *nothing* for manfacturing, materials,
- >etc.
- >
- >But then, I'm not working for Gary Coffman, Inc.
- >
-
- Um, you wonder why the B-2 costs 1 billion per?
-
- >
- >But you just said you weren't going to provide any of those things,
- >Gary. The engineers were going to live at Motel 6 and work at home.
- >And it was still going to cost you over $100,000.
- >
- >Weasel, weasel.
-
-
- No need to call him a weasel, just accuse him of screaming :-)
- the motel 6 school of prject developement should keep costs to about
- 100% of salary. the theory is rent a warehouse next to a motel.
- use the warehouse and motel interchangebly. but you do need
- motivated staff to do this kind of work.
-
- pat
-
-