CAD Manager's Newsletter (#158)14 Sep, 2006 By: Robert Green
Knowing what costs to expect can help avoid budget-busting surprises.
In the August 24 issue of CAD Manager’s Newsletter I continued my series on outsourcing by identifying the business factors that affect your company’s decision-making process. In this issue I’ll give you a hypothetical example of a company considering outsourcing and show how you can use good, old-fashioned ROI (return-on-investment) methodologies to make a go or no-go decision.
The work of four CAD operators employed on an hourly basis at an average rate of $19 per hour (inclusive of pay, taxes, etc.) is being outsourced to a foreign service bureau that charges $8 per hour for similar CAD services.
To facilitate the outsourcing, a drafting/design checker who also acts as a job manager must be employed at $25 per hour on a half-time basis to make sure that all the work is done accurately and that everything flows smoothly. This person will be the liaison between the U.S. operations and the outsourced firm.
The company further estimates that accounting and legal costs of keeping track of invoicing, compliance, intellectual property and so forth will require the equivalent of 80 hours per year for accounting and 40 hours per year for legal services.
Setting up the arrangement is estimated to require 80 hours of legal resources for initial contracts, 80 hours for accounting setup and 120 hours of training to be provided by the new checker/job manager for the outsourcing company. To accomplish the startup, three staff members will be expected to visit the outsourcing company’s offices for two weeks.
Let’s examine the plan by crunching the numbers and see what happens. Read more >>
Now that engineers are designing and can CAD their own work, what’s the future for CAD technicians? Are we on the brink of extinction, or do you see a future in CAD still worth pursuing?
Robert Green replies: This requires a two-part answer.
First: The kind of CAD technician that came to forefront in the late 1980s and early 1990s — the kind that just worked from redline prints making simple edits and replotting drawings — is on the verge of extinction. Read more >>
Submit your questions to Robert Green at
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