Love, As Always, Pete

The Weekly Letters, by A. Pedersen Wood

January 22 , 1993

Dear Everyone:

Have I mentioned that I no longer work for Company?  Company Corp, that is.  This is the result of the Infamous Phase II Study. 

Phase I was to benchmark other companies and compare how much they pay for “Staff Services”, which are usually all those pesky little overhead things like mail services and copy centers (and, incidentally, Records Management), to what Company was spending.  Needless to say, Company’s costs were considered to be a bit on the high side. 

Phase II was to determine how to cut those costs.  So they set up a new Operating Company (Standard Operating Procedure:  When in doubt, set up a new Operating Company) and Presto!  No more “overhead”.  I now work for Company Services Company (a division of Company USA), Business Products and Services (BP&S).  This change took place at midnight, January 1.  The IRS has a funny way of looking at things.  They think that if you change companies in the middle of the year, that means that you had two employers that year. 

Now, some people may think that moving the costs over to another company is just robbing Peter to pay Paul.  Not exactly.  It’s more like Peter can pay Paul, but Paul has to pay Peter back, i.e., “recover” his costs. 

Let’s say Peter is a Mail Room.  If it costs Peter X dollars to run his Mail Room, then he charges all of his customers enough to make up X dollars.  Peter doesn’t have to make a profit, he just has to take in exactly as much as it costs him to operate. 

Of course, it gets a little trickier when your customers don’t want to buy your product.  Like all those people who don’t want to be bothered with developing their Retention Schedules.  Not only do we tell them that they have to do their Schedules (taking time away from real work), but we add insult to injury by charging them for doing it.  We can get around this little point by telling them that Company Policy mandates that they have Schedules, i.e., create a need and then fill it.  Marketing made easy. 

But how do you charge for “developing and maintaining a Retention Schedule”?  By the number of Schedules you do?  (“Attention, Kmart® Shoppers!  There is a special on Retention Schedules today only on aisle 7B in Home Improvements.”)  By the number of Record Series per Schedule?  By the hour?  (A 35-year-old lawyer drops dead and finds himself facing The Devil.  Asking how he died, The Devil tells him, “You died of old age.”  “Impossible!” cries the lawyer.  I’m only 35.”  The Devil:  “According to your billable hours, you’re 162.”) 

Love, as always, 

 

Pete

 

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