you can pay me now....

[Donald McKechnie]

Thank you Wim and everyone else who attended the symposium. Although we
had a low turnout of professors and administrators, the dialog far
exceeded my expectations. Let's keep it going!


> First of all, again, thank you Don McKechnie for organizing the CAUT
> symposium. I learned a great deal. It was also great to meet some of you for
> the first time.
>

I agree with you that we need to show a cost benefit to get our point
across. As I have stated in the past, (and was stated at the symposium)
the Guidelines is one very important tool to use in a thorough
justification package given to an administrator. I believe the
Guidelines is very close to what it needs to be and the formula as
accurate as possible. Many thanks to Fred and Bill for all their work!

How to come up with a generic cost analysis has eluded me for some time.
When the Guidelines are finished and endorsed I hope to devote more
attention to this issue. It has been suggested to me at one time that we
try to develop a depreciation model for an inventory. Perhaps those on
this list who have a greater business sense than me can suggest
something. Letís keep the momentum going!

Don


> There were many subject discussed and some very interesting concerns raised.
> One of them is the economic impact of the formula we have been working on.
> Although it is great to be able to figure out how many techs are needed to
> maintain an inventory in a school, we now need to take this to the next
> level, and figure out what will this mean to an administration. I think it
> was mentioned several times, that what administrators want to know is, how
> much is it going to cost, and what will be the financial benefit to the
> school, if another tech is hired, or if a full time tech is hired. With that
> in mind, there are some questions we need to discuss.
>
> "You can pay me now, or you can pay me later." Know all know the Fram Oil
> commercial. It advocates changing your oil filter every 3000 miles. Not doing
> so will result in having to pay to replace your engine. This, I think, is the
> scenario we need to pose to our administrators.
>
> We have spent a lot of time creating a formula showing how many technicians
> are required to maintain a certain number of pianos. But other than
> justifying our jobs, and perhaps convincing a chair that you need help, I am
> afraid the formula will do little to help our cause, unless we can show a
> cost benefit to the unviversity. In other words, when we tell a school
> administrator to spend more money to maintain pianos, the first questions
> that they might ask is. "What's in it for me?"
>
> To show you what I am trying to say let me give you a scenario. By yourself
> you're trying to maintain 130 pianos in your school, worth approximately $1.2
> million. You make $40,000 per year. You ask the school to provide you with an
> assistant. First of all, the moment you ask for help, you now become an
> administrator. So that by itself creates a problem. One of the things I have
> been warning everyone about is the non productive time you spend on the job,
> the administrative part, keeping records, talking to teachers and students,
> writing reports, answering e-mails, etc. When you get someone to work with
> you, or for you, your administrative hours will increase. So if you think
> hiring another person will automatically take care of half of the pianos, you
> are mistaken. You will wind up taking care of 50 of those pianos, and
> spending the rest of your time doing paper work, and supervising the work of
> the other person.
>
> But getting back to the scenario. Let's say you convince the school to hire
> an assistant at $35,000. (Lets not complicate the numbers with inflation, but
> lets look at today figures). What will be the financial benefit to the
> university to spend another $35,000? If the school spends another $35,000,
> what will happen to the value of the instruments? Will spending that money
> increase the longevity of the pianos? Instead of the $1.2 worth of pianos
> lasting 20 years, will they last 30 years?
>
> You will make $800,000 over 20 years, before the inventory will need to be
> replaced. If you work 30 years, the university will spend  $1.2 million.
> However, if the school spend $75,000 over 30 years, it will cost them
> $2,250,000, before it has to replace $1.2 worth of instruments. As you can
> see, from a strictly economic viewpoint, it does not make sense for a
> university to hire another technician.
>
> This is the way I am looking at this. Am I wrong? Are there some things I am
> missing? Obviously, the numbers will be different in each situation. But we
> need a constant to evaluate. What are your thoughts?
>
> Wim
>