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Exactly. I've never understood why capital or cash expense costs are valued so much differently than salary costs. I've had jobs (like any manager) where I have

Exactly. I've never understood why capital or cash expense costs are valued so much differently than salary costs. I've had jobs (like any manager) where I have complete leeway on how I "spend" millions of dollars of people's time, but had to to through all kinds of approval to spend even the smallest amount of money.

JanisL 5y ago
A lot of it is path dependency whereby various practices turn into processes, regulations and laws. On top of this narratives form that guide peoples thinking as to what the right financial decisions are, then people can start to believe these narratives over time without questioning them. Eventually companies can create certain processes or habits on the basis that those narratives need to be true: https://www.epsilontheory.com/what-do-we-need-to-be-true/ https://www.epsilontheory.com/what-do-we-need-to-be-true/
throwaway2048 5y ago
graft is a serious issue with purchase orders, its much less of an issue with salaries.
Macha 5y ago
Another example is if I want a $100 keyboard I need ahead of time VP sign off for the non-standard expense, if I want $10000/mo extra in AWS services I need any other engineer to approve my change
SmellTheGlove 5y ago
There are a few reasons: - Reviewing purchases should put some reasonable controls around how much software you can accumulate. Adding to the tech stack has maintenance costs, and you don't really want to do it without some sort of review. In this case, it's not the dollars as much as the fit. - With SaaS tools in particular, there are often privacy or security concerns. Those teams should review. Probably want legal's eyes on it to get the right terms in place as well. Again, less about the dollars here, and more about the agreement, risk, required disclosures (subprocessor, etc), and those kinds of factors. - On the spend itself, you'd be surprised how this adds up, especially if folks are signing multi-year deals and not bothering to negotiate licensing. Remember, if it's easy for you and me to buy, it's easy for everyone else to buy too, and it multiplies quickly. Now, on one-off hardware purchases and such, I agree it should be a lot easier. At least at the startup I work at, anything under $500 is just an expense report, so just make sure your manager is cool with it and go for it. But there are considerations here also around stuff coming in that IT or facilities then needs to support - obligating their time with your purchase is something you need to agree on or avoid. EDIT: Also as someone else pointed out, grift on purchase orders is easy without any oversight.
55555 5y ago
Yeah, that's what we decided when figuring this out at our company. Everyone is spending thousands of dollars a month of the company's money (their time). We either trust them to spend our money wisely, or we don't (and they should work elsewhere). So we don't have all these policies. Having said that, these policies are a result of size. You wouldn't spend money poorly when the company is just you and four friends in a garage. But when you're big enough, hiring problematic people is absolutely going to happen and they just see the company's money as a free money pot. We're in a middle ground right now, but, as we grow, are finding it hard to avoid trending more towards the meme corporate policies.

JanisL 5y ago

A lot of it is path dependency whereby various practices turn into processes, regulations and laws. On top of this narratives form that guide peoples thinking as to what the right financial decisions are, then people can start to believe these narratives over time without questioning them. Eventually companies can create certain processes or habits on the basis that those narratives need to be true: https://www.epsilontheory.com/what-do-we-need-to-be-true/ https://www.epsilontheory.com/what-do-we-need-to-be-true/

throwaway2048 5y ago

graft is a serious issue with purchase orders, its much less of an issue with salaries.

Macha 5y ago

Another example is if I want a $100 keyboard I need ahead of time VP sign off for the non-standard expense, if I want $10000/mo extra in AWS services I need any other engineer to approve my change

SmellTheGlove 5y ago

There are a few reasons: - Reviewing purchases should put some reasonable controls around how much software you can accumulate. Adding to the tech stack has maintenance costs, and you don't really want to do it without some sort of review. In this case, it's not the dollars as much as the fit. - With SaaS tools in particular, there are often privacy or security concerns. Those teams should review. Probably want legal's eyes on it to get the right terms in place as well. Again, less about the dollars here, and more about the agreement, risk, required disclosures (subprocessor, etc), and those kinds of factors. - On the spend itself, you'd be surprised how this adds up, especially if folks are signing multi-year deals and not bothering to negotiate licensing. Remember, if it's easy for you and me to buy, it's easy for everyone else to buy too, and it multiplies quickly. Now, on one-off hardware purchases and such, I agree it should be a lot easier. At least at the startup I work at, anything under $500 is just an expense report, so just make sure your manager is cool with it and go for it. But there are considerations here also around stuff coming in that IT or facilities then needs to support - obligating their time with your purchase is something you need to agree on or avoid. EDIT: Also as someone else pointed out, grift on purchase orders is easy without any oversight.

55555 5y ago

Yeah, that's what we decided when figuring this out at our company. Everyone is spending thousands of dollars a month of the company's money (their time). We either trust them to spend our money wisely, or we don't (and they should work elsewhere). So we don't have all these policies. Having said that, these policies are a result of size. You wouldn't spend money poorly when the company is just you and four friends in a garage. But when you're big enough, hiring problematic people is absolutely going to happen and they just see the company's money as a free money pot. We're in a middle ground right now, but, as we grow, are finding it hard to avoid trending more towards the meme corporate policies.