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Wednesday, 27 June 2012

Pay peanuts, get monkeys

Back during the last few years of the last millennium, the more enterprising or devious consulting companies made a small fortune by telling their clients that unless they were careful their computer systems could fall apart when the first digit of the year switched from a 1 to a 2.  

As it turned out, although dates are widely used in computer programs, either all the developers figured out this once in a thousand year event when they were writing the code, or it was very easy to track down where dates were used and make sure there were no foul-ups. Net, net there were no great disasters on 1.1.2000.

But come the next century, those consultants had to find something to do, and that turned out to be outsourcing.  For £250 an hour a big consulting firm could tell a big bank how it could save money in the long term by firing its staff in the UK and replacing them with Indians who would be paid about the same as the UK minimum wage.  A UK IT worker might be costing about £60-70k once all the NI, pension rights and the rest were factored in, plus the overhead, whereas an Indian graduate with 5-8 years experience would cost about 10k (see above).

Which is all a shame when the system goes tits up because some junior operator in India, unsupervised by anyone in the UK, screws up a system update, places the same update on the live and the back up machines and then messes up the back out of those updates.

The outcome: a fall in the value of the shares owned by you (as a tax payer) of £1.7 billion, which dwarves any costs or losses due to the Millennium bug.

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