CEO Outsourcing
WASHINGTON (NOT) - Management outsourcing represents the next big trend among U.S.-based technology companies, according to a report issued today by data manipulation firm Fee Four Service. "Management salaries and related expenses, in conjunction with ill-conceived restructuring efforts and unnecessary consulting services, represent a significant cash burden to most corporations," says Fee Four Service analyst Terrence Phrick who authored the report. "As a consequence, leadership labor arbitrage can deliver appreciable savings."
The report finds that CEOs other C-title executives get paid huge sums for work that gets delegated to others. "Why pay several million dollars a year to someone who’s passing the buck?" asks Phrick, noting that Indian management providers like CEO-Mart and Canned Leadership Ltd provide equivalent services for hundreds or thousands of times less.
Phrick contends that critical management business functions such as golfing, phoning, meeting, traveling, and dining can be done by just about anyone with a head his or her shoulders. "How hard is it to buy low and sell high?" he asks. "Everything else—conferences, lunches, and so on—is handled more economically with a low-cost stand-in."
The report also suggests that using an offshore provider of management services can result in unexpected business synergy. Participating companies can do deals at minimal cost because the same client rep often handles the CEO role for several corporations.
Such arrangements also breed business integrity, Phrick insists. Recalling the Enron debacle, he says, "You don't have to worry about the left hand not knowing that the right is doing when both belong to the same person."
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