Human Resources
I read a statistic recently that just blew my mind !
78% of Satyam Computers' expenses is on salaries, while the comparable number for Reliance is around 0.5% !!
Which is kinda funny to me, because IT is always considered to be the knowledge based, high-tech industry - But the utilization of human beings/resources is so poor !
In other words, Reliance can use one person to generate 156 times the amount of revenue that Satyam can with the same person. Isn't that what the knowledge economy is all about - The ability to use machines in an efficient manner ? .... So, effectively Reliance' billing rate or revenue/employee is about $4,368 per hour against $28 or so for Satyam (not sure about this number)
Of course, a lot of human-intensive designing/programming must have gone into developing the processes/systems that are used in the back-end to reduce Reliance's dependence on human capital ....
78% of Satyam Computers' expenses is on salaries, while the comparable number for Reliance is around 0.5% !!
Which is kinda funny to me, because IT is always considered to be the knowledge based, high-tech industry - But the utilization of human beings/resources is so poor !
In other words, Reliance can use one person to generate 156 times the amount of revenue that Satyam can with the same person. Isn't that what the knowledge economy is all about - The ability to use machines in an efficient manner ? .... So, effectively Reliance' billing rate or revenue/employee is about $4,368 per hour against $28 or so for Satyam (not sure about this number)
Of course, a lot of human-intensive designing/programming must have gone into developing the processes/systems that are used in the back-end to reduce Reliance's dependence on human capital ....
Comments
vel, most stupid comaparison you have made.
how do you like this comparison
30 % of tata motors ' expenses is on steel, while the comparable number for Reliance is around 0.5% !!
ofcourse thats the case because tata makes cars and needs all the steel so most of its expense is on steel.
similarly in a Knowledge economy co. a knowledge worker is the most important resource hence 75% of expenses is on his/her salary.
its total bull shit to say "utilization of human beings/resources is so poor in IT co."
maybe you should review your economics 101 again.
Thanks for your comment. Economics was never my strong suit, but I think my comparison was valid, because I am not talking about specific kinds of human resources, I am talking about all human resources.
And of course, the steel comparison would be stupid - But I am not going a steel to steel comparison. I am going a total Materials spend to total Materials spend comparison.
the reason I believe utilization of human resources in IT is low, is because there is so little effort put into automation - Everythign is manually coded. IT industry is quite antiquated in that way. Take Toyota, where two workers can run an entire car plant ! And take Satyam, or any other IT company, where nothing is automated, even the most mundane of coding ...
What say ?
In IT 90% of Testing is automated, also most of the code written is reused.
All Product companies have built products such that all they need to do is manupilate the data to model a customer business req.
this is a wonderful way to use the exiting engine code.
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BTW did you guess who 'mm' is ? I have been commenting on your blog for a while on a different name and when i make such comments attacking you i use mm !!