Re: Real Value??

Subject: Re: Real Value??
From: Andrew Plato <intrepid_es -at- yahoo -dot- com>
To: "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Mon, 27 Nov 2000 17:08:15 -0800 (PST)

--- Dan Emory <danemory -at- primenet -dot- com> wrote:

> Two of the "inherent faults" you cite above, upfront expense
> and non-writing overhead, are entirely irrelevant if the ROI is
> positive. In fact, most case studies have shown huge
> ROI mulltipliers (i.e., the upfront costs and overhead are
> returned many times over).

No they aren't. Again, this is one of the largest lies that consultants pound
into clients. It comes from a basic misunderstanding of finance.

Savings are not the same as not spending.

Let's consider a scenario...

Your business makes $50,000 a month in revenues. Expenses cost $40,000. Each
month you make $10,000 in profit.

Then you read about BIZBLASTER2000 which promises to save you $5000 a month in
expenses. Initially, it looks like you'll be making $15,000 a month in profit.
That's $180K a year rather than $120K.

However, BIZBLASTER costs $200,000. It also requires an additional $2000 a
month in expenses to transition from the old to the new. This expense lasts 6

So, for six months you have a depressed profit of only $8,000 a month (that's a
loss of $12,000. Plus you have to shell out $200,000 to buy BIZBLASTER. Right
from the get go, you're in the hole over $212,000 to get BIZBLASTER.

After the adjustment period, BIZBLASTER and actually realizes the $5,000 a
month in savings. However, that extra profit must go to paying off the initial
debt. It takes close to 43 months to begin breaking even. That's over 3.5

Now, I haven't factored in inflation, economic cycles, and the need to upgrade
and maintain the system. Realistically, it would probably take 4 to 5 years to
begin realizing the savings. Remember, you can't cut into existing
profitability to pay off investments. Then you're sliding backwards.

So, your huge ROI multipliers are nonsense, Dan. If you want to make real money
you have to hold down expense, increase revenue, and chose capital investments
wisely. ROI is one of those BS buzz words consultants love to throw at clients.

The best investment for any company is always good people. Tools and
technologies come and go, but smart, capable, flexible people are always a
sound investment.

Furthermore, since tech writing is often viewed as a cost center and not a
profit center, it seems dangerous and foolish to invest a lot of money in
something that basically will never pay for itself.

> When analyzing your objections to a structured approach, it
> becomes clear that your viewpoint results from the fact that
> it threatens your own business model, which is "cowboy-style"
> contract writing.

My business model is to sell cost-effective solutions that get my clients on
the right track quickly. I don't re-invent the wheel and I don't try to sell a
Mercedes when a Dodge can do the job.

With the overwhelming number of technologies that fail to live up to their
promises, I think businesses are wise to be more conservative and prudent in
their technology expenditures.

As I said before, since tech writing is often seen as a cost center and - it
only makes sense that with the tightening of budgets there will be LESS for big
documentation systems. Thus my business model responds to the market and not my
emotional attachments to technologies.

For example, most documents can be quickly repurposed using the FREE technology
called SEARCH AND REPLACE. No need to meta-tag anything. Its free, its fast,
and done right - it always works.

> The cowboy contract writer rides into a chaotic
> company environment having no defined processes and methods
> in-place for producing documentation, and blazes away with a
> keyboard rather than a six-shooter to produce something fast
> that (commendably) gets the company out of the hole, at least
> for the moment. But later, when the company adopts standards,
> processes, and structure in the documentation area, it finds that the
> cowboy-produced documents are a dead-end, because they
> manifest all the chaos that existed earlier, thus they cannot be
> managed, reused, or repurposed successfully.

Sure they can. The writer sits down and repurposes the document as needed. When
another writer needs a piece - he opens the document and uses the tried and
true, circa-1983 solution called: copy n' paste.

Besides, you act like repurposing a document is some monumentally difficult
task. I've re-engineered entire doc sets in like 2 hours.

> As more and more companies create order out of chaos, the
> cowboy contract writer will become as anachronistic as Wyatt
> Earp would be in a modern police department..

Actually, things are moving the opposite direction. The era of large, corporate
centralized systems has been on the decline for decades. Moreover, many firms
are outsourcing their tech pubs to small shops because they don't want the in
house overhead.

Andrew Plato

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