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As an IT person, my observation is public companies make similar claims when it comes to IT projects. Claims like we are going to use IBM Watson to improve our
by mmsimanga 8y ago
As an IT person, my observation is public companies make similar claims when it comes to IT projects. Claims like we are going to use IBM Watson to improve our call resolution speed by 80%. Only for the project to fail after millions spent with no consequences. Many ERP projects are late and cost twice the budgeted amount. The point I am trying to make is executives always exaggerate.
- rchaud 8y agoIt would be an issue if the cost of the project had a material impact on the company's finances. Usually the auditors work with the CFO to determine materiality. It goes without saying that stating a production capacity of 20k/month and barely making 10% of that, is more likely to be a material misstatement.
- ucaetano 8y agoIT and Finance are completely different fields with very different rules. One can't simply apply one's understanding of one field to the other (which, sadly, seems to be the rule on HN).
- mmsimanga 8y agoI am genuinely interested, would you mind explaining why the rules are different? Should they be different?
- ucaetano 8y agoThe first reason why rules are different is because in one case (IT) you're dealing with a seller-customer relationship, and in the second (Finance) you're dealing with a investor-company relationship. Second, public equity markets are a heavily regulated environment, for many reasons, and require strict rules to function to avoid widespread fraud, market manipulation, insider trading, etc. This is similar to Healthcare as well. You can't just go selling a random untested drug claiming that it cures cancer. And they should be different because of different configurations of power and impact. Investing isn't just buying a product or a service, it is allowing someone to use your money freely within certain conditions.
- mmsimanga 8y agoI agree when IT is viewed as seller-customer. However, in many corporations whose primary business is not IT, IT is the enabler. In the same way, a mining company will invest in big earth moving machines, knowledge companies such as insurance companies and even retail companies build or buy IT solutions to gain efficiencies in their business. The IT system does, in fact, have an impact on the profitability of the company.
- ucaetano 8y agoSure, but it is just a product or service being provided, which is different from an investment mechanism. It isn't just because you can create an analogy between two things that they are the same.
- lallysingh 8y agoThat's how I interpret Musk's statements. They've got the same "aspirational" feature as software projects. Completely unrealistic goals outside of some everything-is-easy-and-works-the-first-time utopia that doesn't exist. I don't know if he's keeping this tendency to keep people interested, or just never adjusted to something closer to reality.
- threeseed 8y ago> The point I am trying to make is executives always exaggerate This statement is ridiculous and has zero basis in fact. If the majority of executives around the world were lying on a constant basis businesses would never be able to function. Companies would be constantly under threat of law suit or government investigation and they would never stand up to independent audits. The board would be untenable and internally it would be pure chaos. Also marketing claims that companies make are often very much real they just don't apply broadly and you should ignore them accordingly.