Outsourcing
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Office anthropology™
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There is a close correlation between how much public infrastructure projects cost — in the case of mass transit the cost per km of the system — and the degree to which the mandating government has outsourced its project management and infrastructural expertise. The more ideological its commitment to outsourcing, the greater the cost.<ref>Transit costs study,for example.
It has little to do with the general cost of living in the area: the index cost per km of infrastructure in Vietnam (which has a 50% tunnel ratio), was 425, while Switzerland, with 73% tunnels, was well under half that at 173. Portugal (60% tunnels) was the most efficient at 96, and most expensive, with 1037 (although a 100% tunnel ratio) was not Hong Kong, Singapore or even the UK but good old free market New Zealand!
A great boon for management consultants, but a chocolate starfish for anyone else.
Management consultancy textbooks will glowingly quote Anthony Burgess: “A sure sign of an amateur is too much detail to compensate for too little life”.
Management consultants aren’t generally very good with literature. Much less detail. This they take as a mandate to ignore the messy intractable details of a business process, and instead look at the big picture. A good rule of thumb, they say, is Pareto's 80/20 rule: 20% of the activities will consume 80% of the costs. 80% of the revenue will come from 20% of the clients. And so on.
Step one — undoubtedly right — leads to step 2: if we could only identify what that 80% is, we could relocate it to a cheaper means of production and bingo — easy cost savings.
What this misses
- it's low value, not no value.