This feed is from the NEW There's Something About Harry Website at Something-About-Harry.com
Feb 21, 2001
Back in 2001 I offered a plan to outsource myself and my department. Didn't get accepted, but department was shut down by end of 2002.
Contingency Plan for Credit Department (Non) Re-Location
Presupposition: Given the options being contemplated for organization relocations and consolidations, it is possible that the physical space currently occupied by this department might be better utilized or needed by other Motorolan groups. It is also possible that the current location occupied by the credit department may potentially change ownership.
Objective: As a contingency of a potential physical relocation of this group, the Credit Departments goal should be to maintain high level of customer satisfaction, relocate to a more cost effective location, and eliminate any potential impact of cash collection operations.
Telecommuting and offsite location of Department
Office space within a 30-mile radius of the Boynton Beach facility should be identified for short term leasing (7-12 months). This office space should only be large enough for 1/3 of the office personnel remaining in the credit department plus space for necessary files, office equipment (faxes and copier), and a small conference room of approximately 10”x20”.
Credit Department personnel following normal Motorola policy would then set up office space at home utilizing their current computers, telephones, and office furniture (as needed).
Utilizing the office furniture and computers remaining from recent layoffs and attrition, the actual office space would then be capable of providing work space for the 1/3 of personnel as described above.
Credit Department personnel, including management, would then work on a rotational basis within the actual office. One manager or supervisor would be present in the office on each day of the week, and other personnel would rotate in the office either 1 or 2 days per week. A few individuals for various reasons will need to work continually in the office. This number of people should be kept to a minimum to allow for cost savings and future flexibility.
Relocation expense of employees from one area to another would be reduced. Using a rough average of $20,000 per employee to relocate long distance for a department of 15-20 people produces an immediate savings of $300,000 to $400,000 in avoided relocation expenses.
The leased office expense can be deducted for tax purposes. Due to the leasing nature, maintenance would be responsibility of the lessor and not Motorola. The decrease in required office space would be a significant savings for Motorola as well.
Additional Possibilities or Opportunities
Computer Lease Renewal
For many department computers, Motorola’s current lease expires this spring or next fall. As these leases expire all associates could replace their current desktops with laptops to facilitate the telecommuting possibility. This would also decrease Motorola’s cost and requirement of maintaining 133% of the computers necessary for the successful operation of office sharing.
Office Moving Expenses
Instead of contracting the move of all of our equipment to individual households, we could rent a small moving truck and in groups of 2 or 3 move individual office set ups to each associates home. This would prevent the entire department from being offline for an extended period of time. Moving on the weekend would be even better. A portion of the moving fee saved could possibly be paid to those within the department that help with this move.
Expansion of Office Sharing Model
Other South Florida groups that do not need to maintain permanent/full time office space could also take advantage of this opportunity. For example, telecommuting engineers could share desks with telecommuting credit analysts etc.
Consolidation of South Florida Groups
Even if the Boynton Facility remains open this model could be used to increase the available space in Boynton for groups that require permanent office space.
Often tax incentives are available for Corporations that encourage their employees to commute less. This option should be explored more fully.
Next Step Offshore Tax Savings
After a successful transition of this department to such a model, further cost reductions could be identified. This process would allow the group to address opportunities for a break away from Motorola as a subsidiary.
Given the proximity of offshore opportunities, the main office of a ‘credit department subsidiary’ could exist offshore (Bahamas possibly). Instead of commuting one day a week to a local office, associates could commute by hydrofoil one day a week. The federal tax relief opportunities here would include moving profit centers from high cost areas (US) to lower costs areas offshore. For example, the ‘credit department subsidiary’ would charge Motorola for the services provided. For these costs Motorola would realize expenses in the United States thus reducing taxable revenues. However, through the subsidiary Motorola would realize profits at a lower offshore tax rate. This profit could then be deferred until the profits are distributed back to Motorola.