I’m sorry, but most tech companies are clueless when it comes to management. Cost analysis as it relates to the actual activities of an engineering labor force are brushed to the side as overhead, which makes no sense since these are direct costs.
What’s the cost of a poorly specified product? What’s the cost of a meeting? What’s the cost of involving engineers in the hiring process? What’s the cost of multiple programming languages? What’s the cost of having separate teams for front-end, back-end, operations? What’s the cost of adding another engineer to a team?
I’ve never seen any effort put into any of the above. This is underpants gnomes territory:
1.) acquire new engineers
2.) ?
3.) profit
Hence massive overhiring with unaccounted for costs that lead shortly to layoffs and hiring freezes.
The more I learn about managerial accounting (thanks dad!) the more dysfunction I see at most organizations.
Apparently Oracle does attempt to uncovers these costs, but I can’t find the case study.
All of this has an incredibly large impact on financial reporting, hence rosy projections based on EBITDA followed by the sobering realizations when those projections are not met. Most tech firms actually base internal management on EBITDA! This is borderline insane internally and borderline fraud externally.