> How companies consider that a cost center is beyond me. But I’ve seen them do it.
I may have an answer: Because of our fetish with metrics. It is possible to measure the cost of an engineer or computer programmer. This can be assigned a cost which is arbitrarily precise. Calculating teh benefit is usually not so easy. So the decision makers (rational beings, just mislead by an intellectually bankrupt management philosophy) concentrate on what they can count.
There's also a tendency for humans to over optimise the wrong things.
John Sturman has a business game to illustrate this called the Beer Game[1].
It's supposed to illustrate shocks to a supply chain with limited knowledge of how the rest of the system is behaving.
The players in charge of their part of the system try to reduce costs to get a better score but in doing so often catastrophically open themselves up to shocks in the system.
IMHO the same thing is true for managers and accountants trying to reduce costs in their development teams. If you get it wrong you can get a short term gain and long term problem that kills the company.
Might be as simple as the decision maker assuming they won’t be around for the catastrophe. Or outright malice, for any number of reasons. “Hate of job” is a widespread phenomenon that people don’t even think they have to justify.
It’s simple. If you’re in operations it’s all about increasing operating margin (omx). The simplest way to do that is to cut op expenses until you scrape bottom and op revenue dips. Then you adjust, firefight, and find other op expenses to cut.
Or hire contractors like they do here in Europe.
So you go from spending up to 150kCHF for a lambda software engineering to paying 250kCHF to a consultancy. But the company "invest". Doesn't matter if that contractor will end up working there for 4 years or more, that's call investment in the finance book or Switzerland is a at will country (but with notice period).
Just madness.
How companies consider that a cost center is beyond me. But I’ve seen them do it.