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• "Rate math" by "Dose of reality". Excerpts: If you want to know how much to charge IBM, you have to put yourself in the shoes of the PM or partner that has decided to subcontract to you. If you are filling a typical band 8 role, we would normally charge the client $220 - 250 an hour for your time, or an annual equivalent of around $425,000 at 90% utilization. Fully loaded internal cost for that resource is around $95k salary and $40k in benefits, hiring cost, infrastructure, etc, not including corporate allocations. Gross margin would be around $290k, with an effective cost rate of $75 an hour.
  In order to break even on you vis a vis an internal resource, we would have to pay you around $92 an hour. It is slightly higher than the internal charge rate, since you don’t have any unbillable downtime – we only pay you for hours worked and billed. However, we wouldn’t really try to break even vis a vis the “prototype” internal employee, since 1) there is no guarantee that he will be 90% chargeable – it’s an unfair standard, 2) we have total flexibility with your hours, and 3) we realize that we have to pay a premium for the luxury of having a real “on demand” resource. All those factors will raise the amount we are willing to pay you.
  If you have a skill that is in high demand, I would go for around $135 an hour, otherwise $120 an hour would make more sense. If your skill equivalent is higher or lower than band 8, ratchet it up or down accordingly. One other word of advice, get your agreement in writing and make sure you are not committing yourself to targets that are impossible or immeasurable. IBM will screw you the first chance they get. You will be disadvantaged vis a vis your internal project colleagues, since they have contacts and a history with IBM, and you don’t. If there are problems on the project, and there will be, you will be the first to get the blame.
• "25%/year attrition rate as design point" by "ExIBMpeon". Excerpts: One can imagine that a minimum 25%/year recent employee (voluntary+involuntary)attrition rate is the target for BCS. Especially if you make some simple assumptions:
  • The PwCC folks all came in a bag. Apply the "80-20 rule", 20% provide 80% of the value, hence get rid of the rest (80%) as cheaply as possible.
  • You don't train people and you don't let them sit on the bench, so no lost investment if they leave.
  • people who think for themselves are such prima donnas and they want above average pay, better stick with the recruiting leftovers, they are less disruptive, more obedient and more compliant. See "80-20 rule" above.
  • These days I/T fashions typically last less than 5 years and "old timers" are so "negative" explaining why your idea failed on their last 4 out of 5 projects.
• "Some synthesis" by "Dose of reality". Excerpts: The arguments for BCS to subcontract are:
  • More flexible resource capacity. Taken to an extreme, utilization would be 100% universally!
  • More flexible resource availability - get the right skills in the right place when you need them, instead of shoehorning reluctant misfits as a matter of course
  • Lower direct cost for work than can be done offsite. For this resource pool, it also improves our competitive bidding position since clients don’t have to pay travel expenses
  The arguments against subcontracting are:
  • Difficulty maintaining resource quality
  • Client perceptions that we are just pulling people off the street; i.e. brand erosion
  • Lack of team cohesion
  • Higher per hour cost for equivalent talent. There is a definite cost to shifting downtime risk to the consultant. In some cases we will be able to contract them at the same rate as full-time employees, but generally that is because they consider themselves transients looking for any paycheck they can get. They will bolt with the first better opportunity that comes along
  • Having to compensate for a lack of client face time. With an onshore/offshore model, the “chain letter” approach to development reduces efficiency
  • Smaller “farm team” to develop into practice leaders
  For these reasons, there is a natural cap on the number of project resources that can be external. Since the philosophy, or should I say Mantra, around here is “on demand”, the flexible, lower cost model is being pushed beyond the level that is optimal for long term success. Like all the other decisions around here, it is just serving to keep the inmates in power for as long as they can hold out, but it is killing the brand.
  The other implication of this model has to do with relationship marketing. The fewer dedicated insiders that we have walking the halls of loyal clients, the fewer opportunities we will have to add to the project pipeline. The yield of follow-on projects is directly correlated to the number of project team members we have thinking about it and incentivized to make it happen.
• "Consider it elsewhere" by "Dose of reality". Excerpts: IBM Strong points: IBM is bigger, IBM has more people, IBM advertises more, IBM invented the system 360, IBM has a cool nickname (Big Blue), .......did I mention that IBM is bigger??
  BM Weak points: IBM is a technology sweatshop, IBM is more interested in peddling its own products and outsourcing services than delivering consulting, IBM's compensation policies are not competitive, with flat salaries, and no bonuses despite setting high bonus targets year after year, IBM has lost most of its top talent due to the above, IBM’s administrative polices are more cumbersome than the government, IBM HR is fat, dumb, happy and useless, IBM finance doesn’t have a clue about what drives the business and develops business plans by plug and play in Excel until the numbers work despite the fact that the client and resource market won’t support the underlying assumptions, IBM leaders are product-bred political hacks whose talents are best suited to selling insurance or Avon door to door, and IBM has gotten so big that it can’t get out of its own way.

• Alliance@IBM: Attention IBM employees: IBM is blocking e-mail to and from the Alliance@IBM e-mail address endicottalliance@stny.rr.com from inside the company. Please send your job cut information and other correspondence from your home e-mail. You can also contact us the following ways: Phone 607 658 9285 or Fax 607 658 9283.
• IBM Pension Lawsuit FAQ about Cooper v IBM, Updated 6-21-05. Excerpt: Below is a list of frequently asked questions about the class action lawsuit against IBM's 1995 and 1999 pension plans. The answers are my personal opinions, have not been verified with either IBM or plaintiffs’ counsel, and should not be construed as legal advice. On July 31, 2003, a federal district court judge ruled in favor of the employees in this case. IBM will appeal portions of the ruling. On September 28, 2004, IBM and the legal team on Cooper v IBM announced that an agreement had been negotiated that settles some of the claims and set the amount of damages that IBM will pay to the class if IBM's appeal of the district court's age discrimination rulings is unsuccessful. Click on any question to jump to the answer. Or scroll down and read them all.
• Alliance@IBM General Comments from Visitors . Excerpts: We'd like to hear from our web site visitors. Please submit your comments about employment at IBM, on why you visited this site, why you joined the Alliance, what issues are of concern at your workplace, how this web site has been useful to you, or any other related topic. We will publish selected comments. (We reserve the right to edit for clarity, brevity, spelling, grammar). Some sample posts follow:
  • Comment 09/23/05: This one crosses the border on psychotic: IBM is touting product on its website that "As your workforce matures, flexible IBM solutions can help you innovate." Innovate?? IBM's "innovation" is to lay off older workers, cut compensation and cut retirees' benefits. Are they offering software that helps do this? What innovation have they shown in dealing with an aging workforce? They go on to say, "The most successful societies will likely be those willing to encourage and to offer lifelong opportunities and choices to their people — for example, by adjusting their public policies and by promoting continuous learning and career transitions — to find ways to encourage the lifelong development of market-driven skills; and to draw upon the talents of all citizens, including older citizens and the disabled, who historically have often been excluded from the workforce." IBM's cut their lifelong policy, laid off older workers, cut training, etc. adding to the problems they now propose to solve. In addition they say developed countries will need to bring in foreigners to fill the void of retiring workers. This is beyond bizarre. -Anonymous-
  • Comment 09/23/05: Interesting comment from a post about how they are concerned about science and math not putting out enough people. I was laid off 2 years ago in Burlington Vermont at age 42 as a engineering process tech with 17 years. I started on the manufacturing line and they gave me (us) and opportunity to earn a 2 year electrical engineering degree sending us full time. At the time it was an innovative way to get more technicians as there was a perceived shortage. Most of us were laid off 10 years later. The irony now is there is no jobs with this background to replace what we did and were trained for at IBM. I wouldn't recommend a math or science program to anyone. The old adage that you needed a college degree to get ahead is now the opposite. The return on investment with a 4-5 year full time student is dismal at best with an education costing as much as $100K. There is more cost effective ways to earn a living in the trades or getting a CDL license to drive a tractor trailer or oil truck. Food for thought for your kids. -Anonymous-
  • Comment 09/25/05: As a worker who was outsourced to IBM 3 years ago i can honestly say that working for IBM is by far the worst experience of my professional career. I have never seen such a poorly run clueless organization in my entire life. IBM makes FEMA look good. New ideas and innovations will never be submitted to management because as most of the workforce know the management will then take the credit for it. There is no future at IBM for any workers in the USA. Don't let them sell you their lies. Get educated and get out as soon as you can. I liked an acronym that i saw on here awhile back, IBM=Idiots Become Managers. At the account where i work that is proven on a daily basis. -Anonymous-
  • Comment 09/25/05: IBM is so far out of touch with reality that is boggles the mind of the still employed workers in the USA. No one at my account believes anything that management says or promises. We have seen too many former workers that have been burned by managements false promises. The tragedy is that upper management is clueless on how to run a company or treat its workers with respect. My best day at IBM will be the day I give my two weeks notice. I encourage you all to look for jobs outside of IBM and even in other professions. IBM is by far the worst company I have ever worked for in my twenty five years in the computer industry. -Anonymous-
  • Comment 09/26/05: As a recently resourced employee, it's interesting to read the commentary from others. Thinking about IBM and how it is focusing more and more on selling 'knowledge' based services, based upon employee expertise, how at the same time can the company treat employees as just another widget and hope to succeed in the long run? If the employees ever collectively get smart, IBM could be severely damaged if all of a sudden these knowledge employees failed to show up for work! -Anonymous-