Originally Posted by
Final 3 Greens
You really do not get it, do you? IT is an overhead, it is also a critical enabler to airline operations - the two things are not mutually exclusive. Pilots are direct costs, they are also critical to airline operations.
As the OP posted, I really don't understand why there is an argument about this.
As someone who does not have an MBA, but is in IT in a different industry, this is what I am seeing.
Generally, IT cost is an overhead. It does not directly proportional to the per unit cost of the product. That is fine so far in terms of accounting.
Now comes management who wants to better the bottom line. The simplest way to do that is to cut cost. And since overheads are not directly related to per unit product cost, it is contiually in the crosshairs of shaving x% off in the name of efficency.
That is not the end of the story. Because IT is a combination of infrastructure and employee knowledge, these reduction in spendings does not lead to immediate failures. Like a house that is not maintained, it may very well stay up for another decade or two before the roof falls in. Risks increases slowly but not visibly. Embolden by the seemingly good results of the previous cycle of cost cutting, senior management continues blithely on, most of them not seeing the consequences as they are long gone by the time the piper needs to be paid.
In the organisation where I work, IT has just been demoted to report to Finance instead of straight to the president. The whole team that manages email has been made redundent (and we have since had email issues that no team is willing to take responsibility for). The team I am in have been constantly losing one position every year or two while taking on more responsibility with each reorg. The last reorg made workers redundent while increasing the number of managers, contractors and consultants. Morale is through the floor and we have had around 25% absentism this year, which increases the workload on those left behind even further.