I think that a lot of times these sorts of things come down to peoples inability to rationalize large numbers.
It reminds me of a story posted a while ago about the City of Boston moving from Microsoft products to Google Cloud products. One of the prime motivators of this move was claimed to be cost. Boston would save $280,000 in the move. $280,000 seems like a lot of money, a quarter million dollars. However, the story also quoted that there were 20,000 employees using the software. This means that the city would actually be saving $14 per year per employee, or a little more than a dollar per month.
If the employee spent more than a minute or two of paid time learning to use the new system, a year's worth of savings would be eliminated. Now, it's possible that the city would see efficiency improvements by using google apps, but that wasn't the reason claimed for the move. The reason claimed was that the switch would cost only $800,000 but save $280,000 per year. Within 3 years they would recover those costs and realize some savings.
When a new CFO comes in and sees that your 100 employees consume $50,000 worth of soda in a year, it looks like an easy place to recover a nice chunk of change. However, in reality the difference is a couple of dollars a day per employee. If those employees now end up going across the street to the coffee shop instead of getting free soda in the office you've just wiped out any gains.
The larger the organization gets, the bigger this feels. 1 employee spending $500/year on soda is not worth considering. 10 employees spending $5,000 per year on soda isn't really a big deal. 100 employees spending $50,000 on soda raises some eyebrows. 2,000 employees spending $1,000,000 on soda means it's going to get cut and someone's going to get a sweet bonus for cutting it.
Every one of these Windows/Office -> Linux/Cloud/Google analysis I've looked at included staff retraining and retrofitting costs. Not saying they aren't rosy estimates, but CIO's tend not to be complete idiots.
The costs of retraining and retrofitting was mentioned and bundled in at $800,000.
My point wasn't that they didn't do their calculations, nor do I mean to show bias towards MS or Google. My point was that the amount of savings they would realize ($280,000 per year) was so marginal when the number of affected employees were taken into account.
If I came up to you and said "I can give you a piece of software that will save you $1.17 per month, but I will have to sell it to you for $40", would that be a good deal?
Why is it that when you multiply those numbers by 20,000 that it all of a sudden becomes a good deal? Especially when you can't be 100% certain that your cost projections are perfectly accurate, being a bit too optimistic can wipe out any hope of any savings.
My point was just that because the numbers are big they look really important. But when you look at them spread across the workforce it looks different. Saving $280,000/year after 3 years is just fine. Saving $14/year after 3 years is fine too. One looks far more important than the other.
If the news story said that it would save them $1.17 per user per month after 34 months, would it have the same impact?
If a company says they spend 2 million dollars a year on free soda for staff, that sounds excessive. If they spend 2 million dollars per year on soda but they say that they spend 45 cents per day on average on soda per employee, does that have the same impact?
In the former, you don't have any point of reference 2 million dollars is a lot of money. In the latter you immediately consider things like how much the employee's wage is, how much electricity they use, how much water they use washing their hands after using the toilet. If you have someone using a Xerox copier that charges a few cents per copied page, now their copier usage is majorly competing with the cost of soda.
In the grand scheme of things though, a couple of dollars per day per employee, for professionals, can be pretty much ignored. But if you think of it instead of $1,000,000 per year, it's harder to ignore, even though it's the same thing.
The original article was about taking some thing away from employees and saving a small amount of money and doing that having negative impacts morale way beyond the savings.
In this case the city is GIVING the employees something and saving a small amount of money.
Oates said: "This decision represents an important step forward for the City. We want to equip all city employees with easy-to-use tools that allow them be more productive and innovative in their jobs, as well as a system that can scale to keep up with the city's demands."[1]
Not even rationalize large numbers, but when concentrating on details the vision of the greater whole can be lost. One of the reason startups are so efficient is that ideally the founders wake up every day with a definite goal in mind to work toward the larger objective. When people only understand a portion of the whole concept, they can make decisions that work in their sphere, but don't contribute to the whole.
In the story you cite, for example, the city didn't come in and say, "How can we be most effective," they were saying, "what costs can we cut" or perhaps "Oh goodness we sure spend a lot on that."
This brings to mind the classic "the airline that cut one olive on every Martini and save millions". Yes, it sorts of justifies the salary of an executive, but it's peanuts when you take a look at the whole company...
It reminds me of a story posted a while ago about the City of Boston moving from Microsoft products to Google Cloud products. One of the prime motivators of this move was claimed to be cost. Boston would save $280,000 in the move. $280,000 seems like a lot of money, a quarter million dollars. However, the story also quoted that there were 20,000 employees using the software. This means that the city would actually be saving $14 per year per employee, or a little more than a dollar per month.
If the employee spent more than a minute or two of paid time learning to use the new system, a year's worth of savings would be eliminated. Now, it's possible that the city would see efficiency improvements by using google apps, but that wasn't the reason claimed for the move. The reason claimed was that the switch would cost only $800,000 but save $280,000 per year. Within 3 years they would recover those costs and realize some savings.
When a new CFO comes in and sees that your 100 employees consume $50,000 worth of soda in a year, it looks like an easy place to recover a nice chunk of change. However, in reality the difference is a couple of dollars a day per employee. If those employees now end up going across the street to the coffee shop instead of getting free soda in the office you've just wiped out any gains.
The larger the organization gets, the bigger this feels. 1 employee spending $500/year on soda is not worth considering. 10 employees spending $5,000 per year on soda isn't really a big deal. 100 employees spending $50,000 on soda raises some eyebrows. 2,000 employees spending $1,000,000 on soda means it's going to get cut and someone's going to get a sweet bonus for cutting it.