Comments on: Simon sets me a puzzle http://www.accmanpro.com/2008/09/06/simon-sets-me-a-puzzle/ Thu, 09 Feb 2012 10:01:51 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Mark Masterson http://www.accmanpro.com/2008/09/06/simon-sets-me-a-puzzle/comment-page-1/#comment-5083 Mark Masterson Wed, 10 Sep 2008 21:53:58 +0000 http://www.accmanpro.com/?p=3287#comment-5083 Agree with Simon, Dennis. I also agree with what you're suggesting, but the sort of logic-free zone that Simon describes is all too common. Apalling, but true. It's like the power companies, not being able to absorb electricity back from the edge -- in the example Simon describes, the extra revenue is literally more trouble than it's worth (for the "deciders", not the shareholders, of course, who will never know). The system isn't designed to handle it. Agree with Simon, Dennis. I also agree with what you're suggesting, but the sort of logic-free zone that Simon describes is all too common. Apalling, but true. It's like the power companies, not being able to absorb electricity back from the edge — in the example Simon describes, the extra revenue is literally more trouble than it's worth (for the "deciders", not the shareholders, of course, who will never know). The system isn't designed to handle it.

]]> By: Simon Wardley http://www.accmanpro.com/2008/09/06/simon-sets-me-a-puzzle/comment-page-1/#comment-5082 Simon Wardley Mon, 08 Sep 2008 23:23:49 +0000 http://www.accmanpro.com/?p=3287#comment-5082 Hi Dennis, You're correct that the system was more successful than expected and there was an assumption made on our side was that "who in their right mind is going to give up the potential for an extra (say) $200,000 in revenue. It’s $180K they didn’t have on the bottom line." That assumption however is not always correct. The problem is that $180K on the bottom line also causes $20K in costs that hadn't been budgeted for. When people have targets for budgets then the $180K on the bottom line can soon get dropped in order to reduce costs by $20K and keep within budgets. I've seen this more than once and it drives me nuts every time. Hi Dennis,

You're correct that the system was more successful than expected and there was an assumption made on our side was that "who in their right mind is going to give up the potential for an extra (say) $200,000 in revenue. It’s $180K they didn’t have on the bottom line."

That assumption however is not always correct. The problem is that $180K on the bottom line also causes $20K in costs that hadn't been budgeted for. When people have targets for budgets then the $180K on the bottom line can soon get dropped in order to reduce costs by $20K and keep within budgets.

I've seen this more than once and it drives me nuts every time.

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