It’s not uncommon to find businesses all over this country talking about the impact the current economic environment is having on their operations.

Just yesterday, I was speaking with my good friend, John Fodera. John is a partner in Eisner, LLP’s audit and risk management services group. He spends his days discovering how to reduce risk and streamline operations, while making sure that his clients remain compliant with regulations a diverse as labor law to SEC requirements. Not surprisingly, he hears about the impact of the recession all of the time.

As our discussion progressed, it became apparent that John brings some fresh thinking to these conversations. One of the thoughts that we shared is that cutting staff is not always the best way to deal with a slowdown in business.

John explained that the “knee-jerk” reaction is always to reduce costs and sometimes this is truly appropriate. But, like any other challenge, there are always opportunities.

When companies are concerned about business, they are more apt to rethink the way that they approach the marketplace. Leadership will also find that staff will be more open to trying new approaches. This is typical when the risk of remaining with the status quo exceeds the risk of trying new things.

Reaching out to existing customers and discovering and sometimes re-discovering what is valued in one’s offerings – and what isn’t – can change what is being sold and how it is being presented to other potential clients.

When something is not valued, often, the cost associated with adding and delivering that capability can be stripped out. Suddenly, the product may actually be more valuable because a level of complexity is removed and the cost associated with developing, selling, delivering it and training others has been reduced. Out of such discussions, many competitive advantages and opportunities are born.

And in an age where technology is changing as rapidly as it is, an economic downturn can provide the impetus to create new ways to produce meaningful value.

As John would probably tell you, the real risk is when you are not rethinking your business.  But don’t take his word for it.

Just ask the people running the newspaper industry and the postal service.

This is what the elder brother in the parable should have done; this is what a true elder brother should have done. He would have said, “Father, my younger brother has been a fool, and now his life is in ruins. But I will go and look for him and bring him home. And if the inheritance is gone – as I suspect – I’ll bring him back into the family at my expense.”

……Mercy and forgiveness must be free and unmerited to the wrongdoer. If the wrongdoer has to do something to merit it, then it isn’t mercy, but forgiveness always comes at a cost to the one granting forgiveness.

Tim Keller, The Prodigal God (pg.82-83)

We delivered this clip for our client last week. It was screened for our client, our client’s boss, his boss and their boss. That far up, surely that has to be Barrack himself? Anyway, after the screening, they burst into a round of applause! So our client is very happy indeed.

The CMS’ “pervasive deficiencies” in its internal control of contractors expose the agency to increased risk of improper payments and waste, the U.S. Government Accountability Office concludes in a new report.

Read more at modernhealthcare.com.

Editor’s note: Reducing cost in almost any area, gores someone’s ox. There are many studies that show if you do this or that, you can reduce health care by X. Of course the claims added together is greater than the sum of the current whole….sooo….here are a few examples of potential areas to investigate for savings or maybe not:

————-

A recent study estimates the percentage change in national health care spending that could be achieved if one of the following policies were implemented alone for 10 years:

• A “bundled-payment” approach which provides a single payment for all services related to a given treatment or condition: 5.4% decrease
• Bundling payments only for hospital-based services: 0.1% decrease
• All-payer hospital rate setting: 2% decrease to a 0% increase
• Adoption of Health Information Technology: 0.8% increase to 1.5% decrease
• Disease-management programs: 1.0% increase to a 1.3% decrease
• Medical Homes: 0.4% increase to 1.2% decrease

Source: “Controlling U.S. Health Care Spending — Separating Promising from Unpromising Approaches,” New England Journal of Medicine, November 11, 2009, http://healthcarereform.nejm.org/?p=2301&query=home

It’s offering only high-deductible, consumer-directed plans. That will save millions but may damage morale

By Jena McGregor

It’s been a hard year to work at General Electric (GE). Salary freezes have hit its famously performance-driven employees, with some managers taking pay cuts. The price of GE stock, which once made millionaires out of even hourly workers, has gone nowhere as the rest of the market has risen. A 68% dividend cut—the first in 71 years—has stung execs who rely on a heavy dose of restricted shares.

And now GE is making changes that could deal another blow to morale. The company is forcing its 75,000 salaried U.S. employees and 8,000 retirees under the age of 65 to choose what’s known as a consumer-directed health plan, which includes deductibles that run as high as $4,000 a year. Traditional plans, where employees pay higher premiums in exchange for predictable co-pays up front, are no longer available for salaried workers. One employee says his colleagues “are looking at this as a cut in pay.”

GE says the plan is being rolled out to make employees better health-care consumers and to coincide with its new “Healthymagination” strategy, a companywide initiative for health-care innovation. While GE says its future cost savings are unclear, people with knowledge of the situation estimate it could save $1 billion over the next decade or so. With three tiers of premiums and deductibles, GE spokesperson Sue Bishop notes, employees still have options. “It’s not that different from their car insurance,” she says. “You get to choose the amount of your premium, and that determines the amount of your deductible.”

VARIABLE COSTS

The total cost of care will depend, of course, on the individual. Consumer-driven plans can save money for healthy workers who rarely visit a doctor or shop around. Typically, employees have lower premiums and save pretax dollars in health-savings accounts to pay much higher deductibles, with companies providing contributions to offset expenses. (GE will fund up to $1,000 for two of the three tiers.) While GE’s plans offer free preventive care, for the first time, it’s making smokers pay an extra $625 a year.

Workplace experts say that while many companies are adopting consumer-directed plans—about half now offer one, according to consultancy Watson Wyatt Worldwide (WW)—most offer them as part of a broader menu. Wharton School professor Peter Cappelli argues that this isn’t the year to be piling big changes on an already battered employee base. “There’s the death-by-a-thousand-cuts issue,” he says. Veteran recruiter Peter Crist adds that the health-care change could add to the grousing he hears from GE executives. “At the high end, it’s not just the money,” says Crist. “It’s the aggravation.”

Indeed, there are indications that many are anxious about their new benefits, even if they can take comfort in knowing GE’s salary freeze will lift in 2010. Some are overwhelmed by the complexity of the new plans. GE is offering Web tools, town halls, and coaches to help. But James N. Cawse, a former staff scientist at GE Global Research, says: “I’m a statistical analysis guy and I finally had to draw up a spreadsheet to make any sense of it.”

This from David Broder of the the Washington Post:

The day after the Congressional Budget Office (CBO) gave its qualified blessing to the version of health reform produced by Senate Majority Leader Harry Reid, a Quinnipiac University poll of a national cross section of voters reported its latest results.

This poll may not be as famous as some others, but I know the care and professionalism of the people who run it, and one question was particularly interesting to me.

It read: “President Obama has pledged that health insurance reform will not add to our federal budget deficit over the next decade. Do you think that President Obama will be able to keep his promise or do you think that any health care plan that Congress passes and President Obama signs will add to the federal budget deficit?”

The answer: Less than one-fifth of the voters — 19 percent of the sample — think he will keep his word. Nine of 10 Republicans and eight of 10 independents said that whatever passes will add to the torrent of red ink. By a margin of four to three, even Democrats agreed this is likely.

That fear contributed directly to the fact that, by a 16-point margin, the majority in this poll said they oppose the legislation moving through Congress.

Republican budget experts such as former CBO director Douglas Holtz-Eakin amplify the point with specific examples and biting language. Holtz-Eakin cites a long list of Democratic-sponsored “budget gimmicks” that made it possible for the CBO to estimate that Reid’s bill would reduce federal deficits by $130 billion by 2019.

Perhaps the biggest of those maneuvers was Reid’s decision to postpone the start of subsidies to help the uninsured buy policies from mid-2013 to January 2014 — long after taxes and fees levied by the bill would have begun.

Even so, this depends on two big gambles. Will future Congresses actually impose the assumed $420 billion in cuts to Medicare, Medicaid and other federal health programs? They never have.

And will this Congress enact the excise tax on high-premium insurance policies (the so-called Cadillac plans) in Reid’s bill? Obama has never endorsed them, and House Democrats — reacting to union pressure — turned them down in favor of a surtax on millionaires’ income.

http://www.jewishworldreview.com/david/broder112309.php3

If you are looking for a profit, but lovely idea to decorate the windows, you can see the roman shades. Today it is hard to find something that is nice to see and yet not too expensive. Shades have been around for a long time, centuries, in fact, and remains one of the most popular types of blinds.

The blinds are hard-mounted on top of a window. The blinds times in sections, rather than run when a rope tied to the part of the blind is drawn. In this way, are similar to regular roller blinds are easy to bend or fall as they are more decorative.

There are two main types of regular Roman style blind folds.The hangs flat when lowered, folds or significantly in the high when it stopped. The classic flat Roman shades flat when fully lowered and the battery into the extent of the folds, as walk. Other styles feature curved hems, when pulled halfway up, or hem at the back, however, even if they have different styles are generally two categories of Roman blind.

Stores may be made of different materials. They are often made of a polyester material that lends itself to clear the folds and is much easier to clean than curtains. They hang well in any window and can be any style. You can also find bamboo boats, blinds, beautiful and very chic looking wooden blinds. So, whatever the basic decor of your room, you should be able to find a tone that corresponds to perfection.

The tents can be saved with lock material that keeps all sunshine and light off, or may be transparent, allowing sunlight through which light gives the room a very soft, warm. According to the Board, you can choose from many different designs of curtain material. There are many varieties of color and design of Roman shades, as there are with any other type of blind or curtain, making it easy to choose the best for your room.

Other uses of Roman shades In addition to covering a window, even highlighting the areas of the house as a feature or a bay window. Even saw a total of transparency Roman blind was hung from a window overlooking a valley, wooded area. The blind kept out some of the rays of the sun, as it was half of the light on him, but he still allowed to view and see the view. In fact, the use of the curtains was a very good idea as far as the development and care in sight. Normal curtains stayed there, it is possible that the curtain may have interfered with the scene.

Hewlett-Packard sees its latest profits increase by 18% after cost-cutting work offset another decline in sales…. From BBC News. Full story

This site may contain information about: retail shopping. The blog is also related to: shopping places.

If you’re the kind of person that feels the need to feel productive at all times, this is the blog for you. Believe it or not, many of today’s home- and real estate-related reality shows can provide you with valuable tips and information that can be applied to bettering your own property portfolio. So from now on, you can do the ultimate in multi-tasking: Unwind in front of the TV while growing your professional skill set. Following is a round up of some of today’s most valuable home improvement and real estate shows and what they can teach you.

Extreme Home Makeover (ABC, Sunday, 8:00 C.T.)
Sure, you may not have a team of a few dozen volunteer workers to help you gut and rebuild an entire home in a single weekend, but Extreme Home Makeover still proves an invaluable point: No property is unsalvageable. Sure, we all know that while you may pay less to purchase a fixer-upper (as opposed to buying a property that’s ready to go “as-is”), you’re still looking at thousands of dollars in additional costs to transform the property. But even with repair and renovation costs in mind, you may still come out ahead by purchasing a fixer-upper and building it according to your vision.

Extreme Home Makeover proves time and time again that any home can be transformed. If you have the vision, inclination, and a team of reliable contractors on-hand, searching for a fixer-upper may be the perfect route to saving some money and creating your ideal property from the ground up.

Bang for Your Buck (HGTV, Friday, 9:30 C.T.)
Speaking of saving money, HGTV’s Bang for Your Buck is chock-full of ideas for making improvements in the most economical way possible. Check out this show for cost-cutting measures that will help you make quality improvements to your property for comparatively inexpensive prices. On this show, you’ll find tips for everything from renovating kitchens to taking down walls and creating completely new spaces. Not only this, but Bang for Your Buck also demonstrates just how valuable these upgrades and renovations can be. Each episode compares the cost of making repairs to the additional price they will add to a property’s market value, clearly demonstrating the economics of frugal upgrades.

Flipping Out (Bravo, see BravoTV.com for schedule)
Speaking of market value, although he may be a bit eccentric, a lot can be learned from Flipping Out’s “home flipper” and real estate guru Jeff Lewis. This show follows the Los Angeles-based Lewis as he identifies fixer-uppers and completely transforms them in a matter of a few months, sometimes adding up to a million dollars onto their selling price. This show not only provides a template for those who are looking to get into the business of home-flipping, but it also shows how far a little bit of vision and insight into buyers’ minds can go.

Curb Appeal (HGTV, see HGTV.com for schedule)
When it comes to appealing to potential buyers and renters, we’ve discussed the value of curb appeal on this blog before. For those of us without a green thumb, though, it can be hard to know where to start. HGTV’s Curb Appeal is here to show you how to beautify your outside, taking everything from aesthetics to logistics into account. Here you’ll find tips on everything from landscaping to creating outdoor spaces for entertaining and utilitarian purposes.

For Rent (HGTV, Mondays, 10:30 C.T.)
Finally, if you’re looking for a glimpse inside renters’ minds, you won’t want to miss HGTV’s For Rent. Although this program (which shows renters how to install temporary decorations and fixtures into rented spaces) is designed for tenants, it can be equally educational for landlords. For Rent can provide landlords with ideas for the type of quick-fix amenities renters would like to find in their units. Particularly in a tight economy or in a location where there are many competitive properties, this show can give you tips on how to really appeal to renters through economical, easy-to-install “extras.” As an added bonus, if a renter comes to you with a request to incorporate a more permanent fixture in their unit, you’ll be ready with alternative solutions that will simultaneously keep your renter happy and prevent your unit from undergoing any permanent changes.

Thanks to reality home TV, gone are the days of feeling like a couch potato after a few hours of television. Now you can unwind and better your business at the same time!

Comments »

Do you really want the lowest bidder? A question you must ask yourself, especially in situations like this one:

Here are my thoughts on the matter, for all PMs having to go through bidding processes, unless of course you are following the first rule of government spending…

As project managers, one of the legs of our triangle is “cost”, so, obviously, we would like that the lowest possible. Which brings us to the widely used and accepted bidding process – you generate a scope and/or bill of materials, bid it out, get the results and select the lowest bidder. (Ok, so I simplified it a bit – but usually, cost is that which rules all others).

My question here is – is choosing the lowest bidder really getting you the lowest cost?

I would like to challenge that.

I’m sure that if you’re reading this, you can come up with a few ways of how cheap can become expensive, probably (and sadly) based on your past experience… The lowest bidder didn’t fully understand the scope, planned to use lower grade materials, planned on using low-cost inexperienced labor, forgot to quote parts of the scope – or all of the above and other things not mentioned here.

Here is where I want to offer some suggestions to help you pick the RIGHT bidder for your project (It’s of course assumed your company policies and your country laws allow the use of these methods…):

1. Know your bidders – before adding bidders to your list, see their work, talk to their customers and see if they do quality work and have happy customers. if not – well…
2.  Know your project – is your bidder capable of performing the work fully? will he need to take additional subcontractors? do you want that? when trouble arises – will you be pointed to the sub sub sub contractor for solutions?
3.  Create a matrix – Evaluate and compare your bidders based on several factors, not just cost. The more sensitive the work, the more weight should be given to past experience, quality etc.
4.  Grow a “home” contractor, but always challenge him – Its’ great to have a contractor you always work with who’s quality you like and you know you can trust – but don’t stay complacent – make sure you challenge your home contractors to make sure they stay competitive.

Alex

Added a useless practice done by the Filipinos.

A practice that should be removed because altogether it increases costs, defeats its intended purpose, and just being used for other things that ought not be.

Background: author understands the construction business, understands basic traffic rules and regulation regarding said item, and concern for change.

THE REID BILL: “HOLY WAR?”

When state mandates are added in, the true cost of Senate Majority Leader Harry Reid’s (D-Nev.) health care bill is closer to $2.5 trillion, says Michael F. Cannon, director of health policy studies with the Cato Institute…

———

Senate Majority Leader Harry Reid (D-Nev.) has finally unveiled his massive 2,074-page health care bill.  The Congressional Budget Office (CBO) reports that the insurance-expansion provisions would cost the feds $848 billion over 10 years, says Michael F. Cannon, director of health policy studies with the Cato Institute.

To raise those funds:

• The bill would tax wages, medical devices, prescription drugs, sick people, health insurance premiums (twice), health savings accounts (HSAs), flexible spending accounts (FSAs), health reimbursement arrangements (HRAs), and cosmetic surgery.
• The remainder would supposedly come from $491 billion of Medicare cuts, even though Medicare’s chief actuary says such cuts are “unrealistic” and “doubtful.”
• The $848 billion only accounts for part of the federal government’s share of the tab. There is other new federal spending.

There are also costs that Reid and his comrades have pushed off the federal budget.  For example, the $25 billion unfunded mandate that Reid would impose on states, will bring the total thus far to over $1 trillion, says Cannon.

The biggest hidden cost is that of the private-sector mandates, says Cannon:

• In both the Clinton health plan and the Massachusetts health plan, the private-sector mandates — the legal requirements that individuals and employers purchase health insurance — accounted for 60 percent of total costs.
• That suggests that if the Reid bill’s cost to federal and state governments is $1 trillion, then the total cost is probably $2.5 trillion, and Harry Reid — like House Speaker Nancy Pelosi — is hiding $1.5 trillion of the cost of his bill.

Without a cost estimate of the private-sector mandates, Reid has not yet satisfied the request made by eight Democratic senators for a complete CBO score of the bill 72 hours prior to floor consideration.  The House passed its bill without a complete CBO score.  The Senate should not follow suit, says Cannon.

Source: Michael F. Cannon, “The Reid Bill: “Holy War?” Politico.com, November 19, 2009.

For text:

http://www.politico.com/arena/perm/Michael_F__Cannon_7685B271-D21F-44A4-9C8B-37A95FE88D7E.html

202431     เศรษฐศาสตร์และการประเมินราคาทางวิศวกรรมเคมี     Chemical Engineering Economics and Cost Estimation

การอ่านข้อมูลทางการบัญชีและงบการเงินของอุตสาหกรรมเคมี การประมาณราคาต้นทุนของเครื่องจักรอุปกรณ์ในกระบวนการผลิตทางเคมีและการวิเคราะห์เชิงเศรษฐศาสตร์เพื่อประกอบการตัดสินใจในการออกแบบโรงงานทางวิศวกรรมเคมี การวิเคราะห์เชิงเศรษฐศาสตร์ในการเลือกกระบวนการเคมี และการลงทุนในอุตสาหกรรมเคมี

(Interpreting the accounting data and financial statements in chemical industry, chemical process equipment cost estimation and economic evaluation in chemical engineering plant design, economic evaluation for selection of alternative chemical processes and investment in chemical industry.)

(202431 มหาวิทยาลัยเกษตรศาสตร์)

It was later in the evening, after Popstar’s siblings had already gone to bed. We were snuggling in the family room when Popstar turns to me and states

“Mommy, I hate your school.”

Wow, we were having such a nice night, then wham! “Why do say that?” I asked, already knowing the answer. She went on to question why I can’t just quit school, forget about getting a job, and stay at home with her.

Breaks my heart every time this comes up. How do you explain in seven year old language, why I need to work. I’ve told her how much I enjoy school and I want her to see how rewarding a fulfilling career can be. She doesn’t care. I remind her that our lifestyle, including all of her fun activities, is more enjoyable when both mommy and daddy work. She doesn’t care. I try to make time for some one-on-one time daily, but it’s never enough.

I don’t want to burden her with details that shouldn’t concern her, so how do I know how much information to share. She will ask things like, how much does our house cost? Or, how much did our truck cost? I don’t think she should be concerning herself with these things and sharing them with her friends, but at the same time, I want her to appreciate and respect these necessities. I guess her concept of money and appreciating it’s value isn’t real strong, yet.

Is seven the right age to start receiving an allowance? Maybe that would help Popstar start connecting value to purchases. My hesitation is that I do not want her to expect to be paid for contributing to the household. As a member of our family, she needs to want to share the responsibilities; not be bribed into it.

What do you do? I’d love to hear from you.

“There is a great difference between knowing and understanding: you can know a lot about something and not really understand it.”
Charles F. Kettering

The difficulty encountered in forecasting future revenues is often a major stumbling block in the decision making process. But revenues are only one part of the simple equation that measures business success. Getting a good handle on the other part of the equation, the expenses, is easier, equally important and frequently overlooked.

Developing a professional understanding of your costs and expenses, while it won’t help you predict the future, it will give you the means to manage these items, establish necessary revenue objectives and to better understand the relationships between expenses and revenues. Begin by defining each of your various expenses as fixed or variable, understanding the concepts of marginal contribution and operating leverage and then calculate your break-even point.

The process of classifying these expenses is not nearly as complicated as it may seem. Once you have established these definitions you will have an understanding of how these individual cost items will react as the volume of activity changes in your business.

The relationship of changes in an expense item and changes in the volume of activity result in the categorization of fixed and variable costs. Fixed expenses are those which are related to the passage of time and not related to the changing levels of business activity.

Those items which you have committed yourself to for at least the next year in order to run the business in a normal manner are fixed expenses. Items such as rent, depreciation, insurance, taxes and salaries are properly defined as fixed expenses. Fixed expenses will be expressed in absolute dollar terms.

Those items that will fluctuate in close relationship to the variations in business activity are variable expenses. When the activity of any particular volume measure such as units sold, units produced or dollars sold increases, the amount of a variable expense item will increase proportionately. When the volume decreases, the expense item decreases. Expenses such as manufacturing supplies, raw materials and sales commissions are all variable expenses.  Variable expenses should be quantified and expressed as so much money per unit of output. For example, raw materials cost $2.50 per unit or labor costs $.34 for each dollar of sales.

It is about at this time that a gray area known as semifixed or semivariable expenses arises to paralyze the process with confusion. Remember two things, first this is your business that you are dealing with and not some abstract example in an accounting book, and secondly you will not be judged by the perfection of the process but rather by the decisions that you make as a result of the process.

Don’t get hung up on perfecting the definitions of fixed and variable. Most will be quite obvious. If you are locked into the expense for the better part of a year regardless of what happens to sales, it’s fixed. The rest are variable so long as you can identify there cost per unit of volume.

In business, your exposure to risk is a function in part to the extent to which a firm’s costs are fixed. If your fixed costs are high, a small decline in sales can lead to a large decline in profits. Therefore, all other things remaining the same, the higher a firm’s fixed costs, the greater its risks.

The extent to which a business uses fixed costs in its operating structure is called operating leverage. With a high degree of operating leverage, a business has great risk but has a greater opportunity for reward in that a small increase in sales will result in a large increase in earnings.

Marginal contribution is the contribution which a sale makes toward covering your fixed expenses. If a product sells for $1.00 and the variable costs associated with it are $.60, each sale makes a contribution of $.40 towards the company’s fixed cost.

An understanding of the behavior of the cost structure is indispensable for making major decisions. The potential profit from new activities can easily be projected by comparing variable costs and anticipated revenues.

The concept of contribution margin forms the basis for calculating your break-even point. With your expenses properly classified, the formula is as follows. The break-even point in sales dollars “S” is equal to the sum of the fixed costs “FC” plus the variable cost per dollar “VC” times sales “S”. Expressed as a formula it looks like this, S = FC + VC(S).

You know your costs. Because it’s your business, make sure that you understand them and use that understanding in the decision making process.

Here are our additional photos taken during our Coron Island hopping. Enjoy!

De curand am fost implicat in alegerea unui nume ce, cu putin noroc si mult efort, va deveni un brand, caci toata lumea isi doreste un brand, nu-i asa, marca e demodata. Sa va spun cum s-a desfasurat: intai brainstormingul, desfasurat ca la carte, mai ales dupa regula “nimic nu se comenteaza, totul se aduna”. Am adunat la final 483 de variante de nume. Sa nu uit, este vorba de numele unui site Internet, activitatea desfasurandu-se in mediul online.

Pasul al doilea: critica. Toate numele care nu au sunat bine sau nu au dat bine cu www in fata si cu .ro in spate au fost excluse. Rezultatul: 128 de variante unice. Inca multe drept pentru care am aplicat regulile de baza: sa fie scurt, sa fie sonor, sa fie un nume propriu, sa fie simplu, etc. Am ajuns la 35 de nume dezirabile, majoritatea pe gustul si profilul nostru.

In continuare, verificarea disponibilitatii domeniului .ro, etapa care a mai “ars” 18 denumiri, ramanand deci o lista scurta de 17 variante una si una. Cum alegi cand toate merg? Tabel, valori, valorile site-ului, ale afacerii, nu valori numerice (inca), prioritati, ponderi, calcule si in final au ramas 6 variante. Urmeaza verificarea la OSIM pentru a ne asigura in prima faza ca nu vom avea opozitie pe denumirile pe care urmeaza sa le comunicam, in al doilea rand pentru a le inregistra. In final va ramane un nume care, cu mult noroc si inca mai mult efort va deveni brand, un site vizitat si cu o multime de clienti.

Cred ca numele articolului ar fi putut fi si “Branding cu costuri minime”, nu-i asa?

Blades in the data center:  Cost saver or cost waster?  It’s an open question for me at this point.  In the past five years of blades really gaining traction with IT data center spending, how much have they lived up to the predominant value proposition of being cost savers?

I ask this not with an eye to issues such as power savings or space savings, but, perhaps more importantly, professional services and in-house staff expenses.  Have blades forced companies to incur greater costs in these areas than rack mounted servers?  My gut tells me, “Of course!” but that instinctual response is bolstered by knowing some folks who work in professional services and talk about the increased amount of time required to get blades up and running — and keep them working — compared to rack mounted servers.  And how, although it’s more complex, blades are helping them generate greater disposable income for them personally.

I haven’t seen one yet — and I’m actively looking — for an objective study that provides a cost analysis of the purported savings from blade servers versus the increased and additional costs of them over rack mounted ones.  And I wonder, what would the formula be for calculating one?  It seems like it should be straight forward.  However, in the past, at the beginning of the ramp up of blades, the reports and studies I undertook rarely considered the increased costs of professional services — and they never quantified them.

How much do blades really cost?  Are they actually worth it?