Conference 7.286::digital

    
    
    Did the hotel take "funny money"?  No, I didn't think so.
    
    Amazing really.  We are advised of excess capacity in our buildings, we
    are advised DEC is trying to move out of leased properties, we are
    advised of so many good ways to cut expenses and overhead, and then you
    see something on this order of idiocy.
    
    

Perhaps the message is that the cost of the facility is so high that it ought 
in reality go out of business.

Why should the cost center giving the class subsidize the expensive and 
probably expendable facility when it can get cheaper accomodations at the
hotel??

/mike who_is_playing_devil's_advocate

    Sounds like an economy of scale issue.  That is, it is cheaper to use
    facilities whose costs are shared by many than to use facilities whose
    costs are shared by a few.  This is why more groups are going outside
    of the company for purchases rather than inside.  Then, those resources
    that are internal are used even less, making it even harder to justify 
    their now even higher costs.  These higher costs are, of course,
    typical of products at the end of their life cycles.  
    
    The moral in all this?  If you are going to survive selling inside this 
    company make sure you are selling a lot outside this company.  I wonder
    if the cost center that owns the facility could make any money and
    reduce their prices by selling conference room time to outside interests 
    under NMS ...  hmmm.
    
    Steve

    Jack Smith was just raising hell a few days ago with his VP's because
    they were again authorizing off-site meetings, etc.  Maybe he should
    be informed of this fiasco.
    
    .....but, since when are Digital conference rooms not part of the
    facilities charge for that building?  It certainly was that way for
    years.

    Yep, I've  heard of instances like this.  About a year ago, the 
    embassy suites offered a free conference room if we bought $350
    of food.  DEC's conference room was $350.  So, we got a free
    conference room and lunch for all the class participants at the
    Embassy Suites. 
    
    Not a bad deal.

    Many hotels will give you a FREE conference room if you book overnight
    rooms.  I have done this type of thing for meetings.  I will call
    around and shop around.  I'd give the business to whoever offered the
    best deal.  One way or another, hotels want the revenue and will be
    competitive to get the business.
    
    Rgds,
    marcia

    It is definitely NOT a good deal as far as the Digital is concern.
    
    Digital's conference rooms are ALREADY paid for by Digital.  When cost
    centers incurr additional cost of going to "outside conference rooms",
    Digital is paying that much extra!!!!
    
    We should not only look at expenses from the cost centers' perspective, 
    we need to look at how it impacts Digital as a whole.  
    
    Of course, I am not saying we should not use hotel conference rooms.
    In some cases, it maybe beneficial to "get away" from the
    plant/office (ex. less interruption), but cost of the internal conference 
    rooms should not be the reason.
    
    Just my $0.02,
    
    Rose
    
    
      

    I think it's given that Digital has to pay more by having to use
    outside resources.  The problem is that there is no control mechanism for
    doing things for the corporate good.  There is only a control mechanism
    for doing things for the good of individual cost centers.  Assuming
    this to all be true, then any resources that are paid for by the
    corporation as a whole and not by individual cost centers can only be 
    sustained by corporate-level edict if there is outside competition.
    
    If a conference room is being paid for entirely by one cost center but
    is being used by other cost centers, then the owning cost center needs 
    to charge for its use or be held accountable for the funds expended 
    "poorly", even though it's for the corporate good and may be cheaper for
    the corporation in the long run.  If it cannot do this, then it needs
    to use the space for something more productive.  At least, that's how I
    understand that this type of thing is supposed to work.
    
    I think the days of doing things for the corporate good are over
    because of the need to be accountable to cost centers rather than to
    the corporation as a whole.  That's not necessarily all that bad.
    As for me, I feel more loyalty to my cost center than I do to the
    corporation, note files aside.  That means that I feel more like I work
    as part of a small team rather than as a small cog in a big machine.
    In a lot of ways, this means that for me these are the "good old days".
    
    Steve

RE:      <<< Note 1572.4 by COOKIE::LENNARD "Rush Limbaugh, I Luv Ya Guy" >>>

>    they were again authorizing off-site meetings, etc.  Maybe he should
>    be informed of this fiasco.
    
There's one thing I should make clear.  In this case I hold the
organizers to no blame.  This was a meeting that involved people from
all over the country.  It took place in a location that was chosen so
the fewest people would end up traveling.

It just happened that the internal cost was more than the external cost.
My question is why should it be more expensive to get a conference room
in a Digital facility than in a hotel?
 

    Smith's memo gives me the strongest possible impression that NO, repeat
    NO off-site meetings are authorized.
    
    Also, people who attend a meeting at a Digital facility are expected
    to buy their own lunch.....even if on travel status.
    
    I'm surprised purchasing hasn't already clamped down on this.

    John Miano,
    
    Your segment and mine, Banking and Investments, is having an off-site
    meeting at the Boston World Trade Center on September 11-13.
    
    Pat Sweeney

    >  <<< Note 1572.10 by COOKIE::LENNARD "Rush Limbaugh, I Luv Ya Guy" >>>
>
>    Smith's memo gives me the strongest possible impression that NO, repeat
>    NO off-site meetings are authorized.
>    
>    Also, people who attend a meeting at a Digital facility are expected
>    to buy their own lunch.....even if on travel status.
>    
>    I'm surprised purchasing hasn't already clamped down on this.

    roughly:
    "
    It is amazing that I, as head of the Moscow Party Branch
    cannot spend 5 rubles on pencils without the
    signature of the Vice President of the party"
    
    Boris Yeltzin, to the Central Committee, some time ago.
    
    Why is all this attention to trivial cost detail being handled
    at the senior level when there are structural reforms that can
    have much larger payout? 
    Let's look at it this way. If the internal Collectives and Factories
    in the autonomous regions cant provide the services that functions
    outside in the free market system provide, then it deserves to fail.
    
    Get real, charge properly, if you cant get the internal costs of
    maintaining a room down to a realistic level, then get someone else
    in the Capitalist system to provide it for you.
    
    This is better business. If Jack Smith or anyone else drags their
    heels or imposes globally mandated hacks that work against efficiency
    rather than for it. Then perhaps they ought to take a look at what
    sort of revolution stockholders might provide for them.
    
    regards,
    John

	One of the underlying Issues here is the way digital assess cost!
I've have seen this accross the board. Why isn't anyone asking why the 
Conferance room cost so high? It is the same with manufacturing I've been tld 
repeatedly that digital goes to outside manufactures because it is more cost 
effective. That someone else can manufacture Cables (for example) at a cheaper 
than we can in dec and make a profit! 

	The truth is we don't have a clear cost structure that is refelective 
of the real investment we make from any perspective. 

	For example: The average total cost of the manufacturing piece of a 
module assembly is about 5%. Yet this 5% is cheaper to do outside? In manny 
cases we provide the capatial? and the materials? What is the real savings? 
Wouldn't this make one question the logic of such decisions? 

	To Get back to the conferance Room Issue... I've notice where vast 
amounts of space is taken up for conferance rooms (especially training centers) 
where the space is locked up for months at a time. But is vastly underutlized. 
Like Once a month there is a class in that space. Yet no other group is allowed 
to use this area. I think a corporate managment of conferance room space where 
a pay as you go process should be put in place that the room cost should be the 
square footage rate * the building  equivalent lease rate / 2000 hours * number 
of hours needed. Then if there is excess conferance room space and there is a 
need in that area for conferance room space lease it at a + 30% rate. This 
should cover the additional cost of managing and external conferance room 
system and give us a little profit beside. 

	I think that such a system would discourage abuse of over booking 
conferance rooms and serve the corporation by adding to the bottom line and 
insure that digitals conferancing needs are met in a cost effective manner. 

	And thats my $.02 worth...

    If we assume we are all part of a "busines unit" as the latest NMS
    memos dictate, then a business unit manager is responsible for that P&L. 
    If the P&L justifies expenses like offsite meetings, why shouldn't it
    happen?  The P&L business unit mgr has his/her feet to the fire to
    produce a profit hopefully, and they should be able to make the
    investment decisions to produce that profit.  Aren't the business
    unit managers supposed to have that responsibility?
    
    Mark
    

        A lot of groups are just selfish. They charge large amounts of
        money to anyone foolish enough to pay so that NOBODY will pay.
        They want to keep their conference rooms for themselves and don't
        want other groups 'running amok' through their buildings. 
        
        

    Among other things, Smith seemed very concerned about the impression
    that high levels of outside spending would give others within the
    Corporation who are under severe spending limitations.
    
    BTW, before leaving, I wanted to zing the individual who still thinks
    there is such a thing as "funny money".  This attitude is part of the
    reason that we have so much trouble controlling spending.  There
    simply isn't any such thing.  All expense items are REAL MONEY.  Maybe
    not at your CC level....but somebody, somewhere, is spending real
    live green Digital folding money and then transferring or allocating
    that expense to you.  Surely this isn't that difficult to understand?

RE:      <<< Note 1572.17 by COOKIE::LENNARD "Rush Limbaugh, I Luv Ya Guy" >>>

I disagree most strongly to this statement.  Suppose an organization has a
conference room that is in use 4 days a week.  If in order to use their
conference room one on a day that it is available I have to pay an
internal charge of say $200 but is a hotel conference room available
available for $100, I am saving Digital $100 by using the hotel, right?

    Funny money is considered "funny" because it cannot be converted to
    "real" money.  Real money is what is used to pay salaries, hotel
    charges, telephone bills, etc.  Funny money can only be used to pay
    internal to Digital fees, and hence is considered less valuable than
    real money.
    
    I am sure that the internal to Digital fees do represent an expense,
    somewhere, that is paid with real money.  However, the connection
    between the internal fee and the external expenses required to provide
    the service for which the fee is paid is often extremely remote, and
    thus generally not visible to the person paying the fee, or to those
    who rate his performance.  Thus, spending real money (on a hotel) is
    reviewed much more seriously than spending funny money (on a conference
    room).  We've seen this phenomenon here.
    
    If everyone who priced his services in terms of funny money were
    required to offer it outside of Digital, under the same conditions,
    for real money, at the same price, we might see the funny money prices
    fall to a competitive level.  However, the consumers of these services
    must also have the privilege of converting their funny money to real
    money if by doing this they can purchase the service outside of Digital
    at a lower price.  This latter privilege would give cost center
    managers real profit-and-loss responsibility.  It would also take a lot
    of authority away from the layers of management above the cost center
    level, so don't expect it to happen.
        John Sauter

    re: .18
    
    Wrong.  It costs Digital an extra $100 to use the hotel.  Digital still
    has to pay for conference rooms in our facility whether they are used or 
    not (can you imagine telling the landlord that we won't send him all
    the rent for the month because we didn't use all the building every
    day?).  It is arguable, however, whether $200 (or whatever) is fair
    compensation with respect to the cost of a room per day.
    
    A better example to disprove Mr. Lennards theory is E-mail.  Some
    groups have wasted considerable energy taking things like E-mail
    accounts away from their people as a cost-saving measure.  Forget
    for a moment the questionable wisdom of doing such a thing.  Digital,
    in all likelyhood, will continue to provide E-mail tools to the vast
    majority of its employees and the incremental change from
    non-participation in any one location will be so small that it won't 
    make sense to decrease the capacity of existing systems.  The end result?  
    A few groups save a couple of bucks by forcing everyone else to absorb a 
    larger share of the costs associated with providing E-mail.
    
    If you want to cut costs, individual managers must be forced to
    prioritize measures such that the first things to go are real,
    hard-dollar expenses.  Cutting allocations can be good, but if they
    don't save Digital money in addition to CC money, it's a significant
    waste of time.
    
    The bottom line is that once there is a commitment to fund a corporate
    or group resource, the allocation of the associated costs is funny
    money.  As long as the resource continues to exist, it will continue to
    cost Digital money whether individual groups decide to use it or not. 
    NMS is a good mechanism for creating a marketplace whereby only the
    most efficient resources survive, but it won't eliminate allocations and 
    there will continue to be some 'funny money'.
    
    Al
    

	Al's right, so how do we fix the problem ?

	Top down command forcing the cost center to make its
	conference room available at some arbitrary rate would
	be a mess:  the rate may be too high or too low.

	The key here is that things are "allocated".  A group
	is funded for $600,000 to sell $6 million in computers
	( or whatever ).

	If the group has to pay for their own digs, and they
	rent a dirigible hangar ( for the extra air ) then
	great.  If they can't pay the rent after year one, the
	solution is obvious.

	However, if the group's got an office with a great conference
	room, and they'd like to generate some revenue, let
	'em set their own rate.  If they like it empty, then
	let 'em keep it empty.

	Steve H

    Why is this such a hard concept to understand?
    
    If a person, say his name is Ken DEC, has $200 in his left pocket and
    he has to find a place for his right hand, call it a meeting. His right
    pocket is going to charge him $200 to have the meeting. So, he puts the
    money in his right pocket. Funny Money, how much money has Ken Dec
    spent, how much revenue did he make on the transaction.
    
    What if Ken Dec found MaryLou Marriott would let him have the meeting
    in her pocket for $100. He puts the $100 in her pocket. How much money
    does Ken have left? How much money did left hand save?
    
    - John

    ...bb-b-b-but what if Mary-Lou expected everyone to buy lunch?
    
    The best point in the previous few is that if the room costs 200
    bucks, someone is gonna pay it, irregardless.  If forcing someone
    to use and pay for it saves a outside expenditure of 100 bucks, we
    are 100 bucks ahead.  Simple.  The 200 bucks is already in somebody's
    budget as a facilities charge.
    
    The only reason I raised the flag on funny money, is that sometimes I
    get the impression that people really believe that internal transfer
    bucks are like Monopoly money.  The trail may be remote, and even years
    old, but there is green money at the end of it.
    
    Anyhow, to belabor the point, I think Smith mostly objected to the
    appearance of business-as-usual.......and I think he's right.
    
    Another item overlooked is that there is an expense associated with
    J.V.'ing a transfer of funds for a conference room, just as there is
    an expense associated with processinga a purchase order for the hotel
    facility.

    The costs must be paid, regardless of which group does it.  I think
    that the goal of internal services people (facilities, cof rms, e-mai,
    etc) should be to break even and not to make money.  This way the cost
    could be applied to the appropriate business group who is using the
    (whatever).  The group who is using it would have the service they need
    at a reasonable rate and the cost center who has the conference room
    would cover all of it's expenses.  Does this make any sense?
    
    
    Mike

    I managed internal service-deliverying organizations for over ten
    years, and believe me there is (or at least was) way to "make money".
    
    I don't our bugetting provides a mechanism to make money for these
    kind of organizations.  At the end of the fiscal period you either
    have a negative or positive "variance".  In the business, I was in
    we got frowned at equally for either instance.
    
    ...and everything started over again at zero each fiscal year.

   Brief rathole/anecdote (gad, I'm frustrated!): I've seen the
   aforementioned Jack Smith memo (objecting to managers signing for
   unnecessary expenses like external meetings, employee appreciation
   cookouts).  

   What I received looked like it had been forwarded from Jack directly
   through (if I counted correctly) five layers of management above me. 
   Included in each subject line was either "Please read" or "See below" or
   "Important" or....  Also attached were several lengthy ALL-IN-ONE
   distribution lists, as well as notes that other distribution lists had
   been deleted.

   At the beginning of Jack's actual message was a hard-to-miss "DIGITAL
   CONFIDENTIAL - DO NOT DISTRIBUTE OR COPY" header.

   I suggested to my manager that it's hard to take seriously any message
   from upper management when it appears in such ironic circumstances.  He
   sort of understood my point, but didn't think it was that big a deal --
   the underlying message was what was important.

   One week later I got a mail message regarding date and plans for the
   group's Employee Appreciation Day.  

   Aarrgghhh....

   -- Cathy

    Hold on,
    
    I detect a little bit of fallacious argument in the previous notes.
    There is an explicit assumption that "space has to be paid for
    whether its used or not". This simply is not true. When you rent space
    you pay for it by the square ft/metre/ect. That include the space for
    conferences. But if you stop having them then you can rent less space
    and, for the time that you use it larger spaces for conferences, not the 
    full time you have it. It doesnt have to be paid for in the first place.
    
    If the use of outside facilities became common practice the need for
    large internal conference space would decline and so would the need
    to service them, maintain and keep furniture for them, spend time
    taking booking for them, providing telephones & support items for them.
    If they, as most do , remain idle for a lot of the time, waiting for
    some "other group" to book them so we can scavage the high cost of
    having them, then there is a problem that may well save a great deal
    of money by having facilities justified on an individual basis based
    on the needs. I say, let professionals own and manage conference facilities
    we cannot run efficiently or at full capacity.
    
    That said, its like the costs of car ownership. There are many options,
    in some locations (like New York), Taxi Cabs present a higher cost
    during the period you use them but you dont pay for them (storage,
    potential damage, maintenance) while your not using them. The Taxi 
    companies have become very efficient at doing business under this model 
    and the consumer fits a niche of people for which car ownership is 
    uneconomical. There seems to be some sort of explicit assumption that
    every facility needs a conference room of some large size. This should again
    be a local decision. Having Jack Smith handle this issue is just not
    sensible. Comparing a local, underused Digital conference facility
    with an outside one based on cost over time is not realistic. Although
    cost centre A (the renter) has paid the same for the facility, it may
    actually cost more, since it may sit idle for the rest of the week (I
    dont know, but there is a potential depending on the local needs of
    the owning group).
    
    The true cost to Digital then is the cost of lease and the upkeep of
    that conference space, which may not be justifiable but due to some
    dictum from above like "each facility shall have conference space"
    they are paying for. The reality is that each circumstance is
    different, for some people Taxis (short term rental) saves them money. For
    others, high utilisation dictates Purchase or Long-term lease.
    Actually, my high school used to have class meetings and assemblies in
    the open air. Saved all this hassle. I guess the analogy to this is
    deciding to walk to somewhere instead of taking a taxi. 8^)

    I don't get rewarded for earning Digital lots of money nor am I
    penalized for losing lots of Digital's money.  I am rewarded for
    earning my cost center lots of money and penalized for losing lots of 
    my cost center's money.  So, why should I pay $200 for a conference
    room when I can get it for $100?
    
    Steve

>    <<< Note 1572.27 by AUSSIE::BAKER "Mandelbrot = Paisley of the 90's" >>>
>                -< But that space doesnt have to be paid for! >-


Thank you Thank you Thank you...  That is what I was trying to say way back in
.2 or .3 or so...  If the damn space really does cost some poor cost center
$200 a meeting to maintain, and hotels are only $100, then close the damn 
conference rooms...  Give 'em back to the landlord or sell 'em to somebody
else.  I understand if we choose to own expensive conference rooms, then we 
ought to use them...  But my question is if the ongoing upkeep forces us to 
pay more than we would by just using Hotels... then why even own the space?

(p.s.  I recognize this argument makes no sense if the owning CC is simply
trying to gouge users...  I am assuming the 200 dollars somehow reflects our 
actuall costs...)

.22 ...  Why is that so hard to understand???  :-)

    I agree, if Digital is leasing a facility they may have the right to
    negotiate with the owner not to lease any large conference rooms. If
    DEC owns the facility, DEC has that space as overhead. They have the
    option to make offices out of the conference rooms (which also turns
    out to be overhead costs, but absorbed by the using cost center). Like
    Dick said a couple of notes ago, there is actual cost to DEC. If DEC 
    elects to keep the conference rooms the cost to DEC is the same, but
    it is just absorbed differently. So the $100 spent outside is
    additional cost to DEC over the $200 overhead cost.
    

.28 is right on.

The model of the universe right now starts and stops with the CC.

And there are too many folks in management who see "the right thing"
as the "the right thing for my CC" vis-a-vis "the right thing for DEC."

This has been fostered by the measurements we use to evaluate managers.
And, in turn, the measurements are filtered down to the IC's.

As Tom Peters says, "If it's important to you, measure it.  If it's the
most important thing, measure it most accurately.  If you talk about
something as important, but measure something else, people will react
to the measurement, not the talk."

Somehow, we've got to start measuring the contribution to DEC, not just
to a CC.  Supposedly NMS will help.  Let's hope so.

K.

    Why is this so difficult.  Listen closely now, OK?
    
    You cannot give space in a Digital-owned building back to anyone.
    
    You can't take it off the books if it isn't used.
    
    It is part of every resident organization CC budget, and it is in
    everyone's best interest to insure that it is utilized to the max...
    even if occasionally it is inconvenient.  The money is already spent.
    

    I think we're concentrating too much on efficiency rather than
    effectiveness.  The Soviet economic model was designed to be
    efficient. The free-market economy (like NMS) was designed to be 
    effective.
    
    You can't take a slice in time - a single conference room usage -
    and develop an economic model around it.  That would be like saying
    that we don't need Burger King and Wendys as long as MacDonalds is
    around.  That would make MacDonalds a utility - like, say, your
    favorite cable company.  
    
    The point is, we need policies that work over time to encourage
    good economic behavior.  I'll agree that for a GIVEN meeting, it
    would be cheaper to hold it internally.  However, if we're concerned
    with Digital beyond next week, I'd rather see a policy that encourages
    competition and - yes - maybe even profits for many cost centers.
    The profit motive (in a market economy) has a tendancy to improve quality 
    and lower costs.
    
    The problem is that competition is frightening to many people.  Yet we
    don't hesitate to take full advantage of competition when we go out to
    buy a new washing machine:  We want the best machine for the least
    cost.  The same goes for products and services within the Digital 
    economy.  Funny money is useless on the open market.  Ask the Russians.
    
    We must be bold.
    
    John.

Re: charging $200 for an internal meeting

Shouldn't a conference room be considered 'facility' space rather than
belonging to a particular CC? Costs for the conference rooms should be
divided up just like paying for bathrooms.... it's a cost of doing
business.

If the conf. room belongs totally to the CC then the scenario in .28
unfolds...  other CC's can get a conference room for less externally.

Lee

    Re .32:
    
    > You cannot give space in a Digital-owned building back to anyone.
    
    Right.
    
    > You can't take it off the books if it isn't used.

    Partially right -- you cannot take it off the books of the past.
    
    > It is part of every resident organization CC budget, and it is in
    > everyone's best interest to insure that it is utilized to the max...

    Wrong.  If a cost center is charging too much for a resource and has
    not gotten it through their head that they are causing waste, then
    other cost centers ought to stop giving them money.  This will not
    correct the waste that is in the past, but eventually the message will
    get through to the wasteful cost center and they will eliminate the
    waste.  Things will improve IN THE FUTURE.
    
    Some people have taken the position that internal money is real money. 
    Some of taken the position that internal money is funny money.  The
    truth is somewhere in between.  It is clear from some of the examples
    that internal money is not always, perhaps even rarely, an accurate
    representation of value to the company.  If a cost center pays $200 to
    another cost center for a room, the cost to Digital as a whole is
    neither $200 or $0, but somewhere in between.  If may be that the room
    only costs the charging cost center $90, and they are looking to make
    money.  The actual cost/value to Digital is going to vary from
    situation to situation.           
    
    
    				-- edp

    Once upon a time, before everyone spent half of their adult life
    travelling from one DEC facility to another to silly meetings, the
    conference rooms in a facility generally met the needs of the
    building occupants.  The cost of those conference rooms was reflected
    in their CC budgets, and everyone was happy ever after!!
    
    Now, we have facilities with 2-3X the number of conference rooms that
    are required by the actual occupants.  They don't want this surplus
    capacity reflected in their occupancy budgets, quite rightly.  So
    "Facilities" holds some of them back for general occupany on a per-
    event basis.  These are the ones you've gotta pay for if you use them.
    
    I'm probably oversensitive to this whole issue as I am in a facility
    in Colorado Springs (CXN1) which has several acres of beautiful, modern,
    conference rooms which just can't have an occupancy rate exceeding
    20-25% at best (I'm guess here).  Oh, and there are the Hanging Gardens
    of Babylon as well, which must cost a fortune to maintain, but I won't
    mention them {:^).
    
    conference facilities

    Please read Note 1473.0
    
    I STILL believe conference rooms should be OWNED BY FACILITIES and be
    available to EVERYONE on VTX.  
    
    I'll bet we couldn't begin to count the number of empty conference rooms 
    that could be utilized every day.
    
    (For many managers, however, it's a status symbol to have their own
    conference room to be used once a week for a staff meeting.)
    
    Joanne                            

    I've always assumed,( yes I know the ass(u)me joke), that one role of
    our oft criticised finance department is to ensure that `funny money'
    is an accurate representation of costs.  That is, a manager should base
    his or her decisions on spending as if `funny money' was real money.  I
    know that conference space must be paid for whether it is used or not,
    but if I have to spend my time figuring out what the value of $200 F.M.
    is in order to make a decision, then the accounting system and the
    finance people are making more work for me.  Likewise if transfer cost
    is not an accurate representation of product cost (i.e., it is burdened
    with lots of allocated costs not related to the specific product), and
    cost statements like `it cost $2000 to process an order' are not valid
    for decision making, then we may as well toss out all of the finance
    people (who supposedly work at arms length from the units they support)
    and continue to make decisions based on personal second guessing.
    
    What I am saying is that if Digital's internal cost accounting
    system is bogus, the people that manage it must be bogus too.
    
    /joel
    

    re: .38
    
    This is not a problem which is unique to Digital so don't be quick to
    dump on our finance people.  In fact, it is a very common problem
    thoughout most sectors of American industry.
    
    I've no real expertise in financial systems, but a few things seem
    obvious to me.  One is that your reporting needs are what drives the
    system design.  There is always more detail one can collect on costs,
    and many meaningful ways to cut it, but the impulse to do so is tempered 
    by a desire to keep overhead to a minimum.  
    
    In other words, if the intent is to run the business from the 20,000'
    level, cost accounting systems are designed to provide that level of
    management reporting in the most efficient way possible.  If you turn
    around one day and decide to run the business from the battlefield, we
    shouldn't be suprised if it takes some time for the accounting systems
    to catch up.
    
    Al
    

    
    .22 & .30  couldn't have said it better myself.  Money in our own 
    pocket still beats paying $ 100 dollars outside the company.
    
    My question is, if the costs of a facility or more specifically a 
    certain cc within this facility "already absorb" this cost once
    then why should an "internal family member" have to pay once again
    for it's use?
    
    my .02 worth!

    Several notes here have touched on the "slippery" notion of costs. If
    you look very carefully you will find there are a number of quite
    different concepts hiding behind this common term.
    
    As an example, someone refers to the cost and means the price an
    external agency charges me. Another introduces internal cost-accounting
    by beginning with an investment in a building and spreading it over
    time and over users. 
    
    Note that when we can no longer distinguish operating expense from
    investment, our system is bogus (as Joel Berman suggested.) as
    suggested a few notes ago.
    
    Underlying all these comments is the fact/often noted that the most
    influencial metrics we have come from cost-accounting and they are, by
    design, biased toward local optimum results at the expense of
    enterprise-wide optimum. (Well put by a number of people here as the
    dilemma of doing what is right for DEC vs right for some sub-group).
    
    No, I think cost-accounting cannot ever be "fixed" so that it will
    provide reliable enterprise-wide guidance for decisions on investments
    and "product costs" for it really was designed for local perspective.  
    The alternative is to re-design the company to fit the measurement
    system.
    
    I believe this is what the new management system (NMS)
    hopes to do....to shift from cost to price in the hopes that the
    capitalists behavior (well described a couple notes back) of the
    consumer will displace the cost-based behavior of the bureaucrat. (or
    as someone said....go for effectiveness over efficiency.) The approach
    NMS seems to be taking is to set up many little businesses and let the
    potential consumer units see only the "price" and buy or not using the
    free-market factors for the decisions.  
    
    I hope it works.  And I must admit I am feeling a bit like the Soviets
    must be feeling right now....believing it's the right direction; but
    knowing we have a lot of challenges to overcome before we actually get
    to the other side. 
    
    /pope

    If I may, I'd like to change the example a little.  I assume that my
    example is another example of a cost cutting measure, and I have to
    wonder if we (Digital) saved any money.
    
    I work out of the Landover MD office.  Recently, I was in Milwaukee WI
    on vacation, and I received a message to call my units secretary.  I
    called the local (Milwaukee) Digital office to get a dtn.  I was asked
    who I was (name, not badge number), and since I wasn't out of the
    Milwaukee office, they would not give me a dtn, since dtn's out of
    Milwaukee are reserved for Milwaukee Digital employees.  So, I had to
    use my MCI card.
    
    Now, I will agree that this is financially not a big deal, probably
    cost Digital a couple extra pennies to use MCI over dtn, but I have to
    ask:
    
    Do we need to save Digital money, or our cost center money?
    
    Mark

    re -1 
    
    What you asked for is illegal. Yes illegal. At least that is what our
    local facilities telcom people are telling us. We were told that we
    could not request and outside call be contacted to DTN. We were
    instructed to use our AT&T card if we were outside the facility.
    
    Now I am no legal eagle so do not attack the messenger.
    
    Frank

    Now regarding this discussion on conference rooms and "costs", I must
    have missed something in basic accounting 101. Do we all not work for
    the same company?
    
    In our office in Tampa we have about five conference rooms, when you
    need one you sign up and that's that. No one sends a bill. Now I
    understand we (Account Groups etc) pay a funny money fee to the
    "landlord" for our space which I assumes includes use of the "public"
    facilities.
    
    Since when do cc own buildings and rooms. Who owns the bathrooms and do
    I need change to use them?
    
    Frank

    re:.43
    
    This may be a nit, but extending a call from outside of a facility to
    another DEC facility via DTN isn't "illegal".  It could get a little
    slippery if it were a call from a non-DEC employee to another non-DEC
    employee at a non-DEC site.  I suspect that the "illegality" quoted by
    the facilities people is in their own cross-charging system for
    telephone usage; this call could not be "charged back" to a cost center
    in their jurisdiction, so someone would have to eat the cost, which I
    can guarantee is a LOT less than an MCI credit card (okay, neither one
    is a lot of money, but the difference would have paid for a couple of
    Post-It pads!).
    
    Technically, such connections may or may not work too well, since
    neither the public network nor DTN are designed to give good
    transmission on such connections.  They *MAY* work quite well, but
    nothing is guaranteed.
    
    A fix for this kind of problem is being worked, but it might take some
    time to get it implemented across the US.
    
    Bill

	... since "illegal" is VERY close to what it is!  The phone compa-
nies call it "tariffs", and, in very simple terms, it's the "laws" under
which the regulated utilities operate.  And I doubt that any of those tariffs
give a user the right to supercede the regulated utilities in providing
long distance or local calling service.  That's what you are asking the
office operator to do when you ask for "patch".

	You are probably also right about the CC charges, but the other
issue is the serious one!

How is Digital allowed to have a DTN network at all? Doesn't that
violate tarrifs?

Lee

What .46 is talking about is a thing called an "access charge".

Prior to when the phone company was broken up, a large portion of long-distance
revenue helped to subsidize local telephone service.  With the break-up this
was no longer possible.  So the local telephone companies were authorized to
charge the long distance companies a per-minute "access charge" for connecting
long distance lines to the local telephone network.  Long distance companies
pay this access charge twice on each long distance call, once at the originating
and once at the terminating end.

When you build a network like the DTN, which connects PBXs together with
long distance lines, you have to promise not to allow any traffic originating
in one PBX to route through a distant PBX and then _out_ to local telephone
lines.  A PBX which allows this is known as a "leaky" PBX.

If you want to allow calls to get outside, you can, but then you have to
pay the per-minute "access charge" in one of two ways:  1) you can pay an
exorbitant fee on all tie lines into the PBX, regardless of how much of the
traffic actually leaves the PBX, or 2) you can arrange for a special group
of local lines to be installed in the PBX and promise to place all "leaking"
traffic on those lines.  Then you pay the per-minute access charge only on
those lines (only for those local calls coming into the PBX from outside
the area).

We use method two in the four big PBXs in the Maynard/Marlboro/Acton/SouthernNH
area, in order to allow outgoing calls to be placed in this manner.  This
continues to get more cost-effective as the per-minute access charges are
reduced (the subsidy is reduced) and the per-line FCC charge is increased
(the local subscriber pays the cost of the local plant directly).

What seems to have happened, and it has only happened in the Atlanta area,
is that someone at some phone company (probably Southern Bell) has decided
that this same rule should apply for calls coming _from_ the local phone
network (after all, it applies to both ends of a call placed through a
long distance company).

Up until now, no local phone company has made this claim, and I wonder if
someone in Atlanta has misunderstood something.  Companies all over Southern
Bell's territory (and all over the country, for that matter) certainly are
using PBX remote access lines (DISAs) -- numbers that you can dial which
provide PBX dial tone, and after entering a personal code, allow calls to
be placed through the PBX.  No access charges are collected when these things
are used, and they really are in almost every PBX in the country (as recent
news stories about serious fraud problems attest).

Thus, Southern Bell's attempt (if Southern Bell really has made an attempt)
to enjoin DEC from extending incoming calls into the DTN is somewhat suspect,
and I wonder if we really have the true story.

/john

	... last week due to "fraud" usage.  They said the whole access
method would be changed IF it is restored at all.  That may be a BIG "if"!

    And we had our DISA shut down about a month ago, for reasons of
    'security' (despite vocal objections by many of us). I have no
    objections to tightening security, like changing the code monthly 
    (like is being done with LAT passwords), but just yanking the service
    has really caused us some pain.
    
    Dave

    Let's hear it for regulated monopolies and the 'old' way of doing
    things.
    
    Way up here in the frozen north, when you rent a line from one place to
    another, therre are no restrictions on what you do with it (other than
    the clear ones of hours of access to the line or whatever).  Not only
    CAN a call go through our lines from say, my house to local office to
    far-away office to customer, but the PBX's in our offices will
    automatically route such long distance calls through the tie lines.
    No fuss, no muss, no fraud.
    
    

re .51

Well, then, if the DISA in Atlanta is back, then the business about it
being illegal to extend calls from the public network onto the DTN must
have been bogus, mustn't it?

re .52

On the other hand, in the U.K., under the full monopoly that used to exist,
the interconnection of the public network with any leased tie lines was
explicitly forbidden.  Under privatization, it is now allowed.

/john

	... but if the "patches" WEREN'T being made thru lines contracted
for that purpose, then I think ATT or S. Bell may have had a complaint.
All I know is what Telecomm memoes us about! :>)

	Issue closed.  Project Status GREEN!