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March 29, 2007

IT "End Clients" As Victims Of The "Prestigious Ones"


There is a tendency on the part of the larger IT organizations, the “Prestigious Ones” to try to control and influence the “End Client” business plan in order to be able to use their “package solutions”.  This effort results in priority being given to system solutions rather than to the “End Clients” business plan.  The results are totally inadequate business solutions.

It is not that they lack knowledge as to the proper way to solve problems, it is that they lack temperance in their desire for large Margins.   We suggest as a solution to bypass the “Prestigious Ones”.

The client must control all systems decisions, as those decisions may impact the client’s “Business Plan”.  Systems contributions by the Consultant should be limited to the development, enhancement and implementation of the systems that will deliver a client’s proven successful “Business Plan” intact.

Due to the fact that the “Prestigious Ones” have extensive Mark-ups to cover their large overheads and profit goals, the Consultants that are presented to the “End Client”  are limited to those that fit their extensive Mark-ups, depriving the “End Client” of  the talent that do not fit  such Mark-ups.

Peningo’s efforts to bypass the “Prestigious Ones” excessive Mark-ups by eliminating the tiers of companies between the “End Client” and the Consultant result in providing the opportunity for the “End Client” to  retain the best talent available while reducing their own costs. As the “Prestigious Ones” support a “bench system” (that is consultants not on assignment are “benched” awaiting allocation to projects) the end result is that the “Prestigious Ones”  have a great pressure to use such idle resources as they are costing money and are not billable.  This is how the “Prestigious Ones” find themselves offering to the “End Clients”  Oranges” when the “End Clients” needs are for “Apples”


March 26, 2007

Outsource The Outsourcers of our IT Jobs

My friend......I know how you feel!!!

Help PeningoGee Wiz!!! With all these “Prestigious” names in Information Technology doing all they can to monopolized our IT Consulting Industry……..while driving down our hourly rates…….. and ……. shipping as many jobs as they can offshore….it’s enough to drive one crazy!!!! With Peningo, we can reverse this trend, by cutting out these “Prestigious Ones”. Let’s fight back by Outsourcing the Outsourcers!

It is the opinion of Peningo Systems, that our Consulting and Contracting IT Industry is slowly being monopolized by the larger IT organizations. Many of these organizations are some of the more prestigious “NAMES” in Information Technology Consulting. At Peningo, we often refer to these prestigious “NAMES” in IT as the “Prestigious Ones”. The more control these entities have over our industry, the more we see a decrease or stagnation in our rates and salaries for IT related work. Outsoucing and Offshoring is just one of the many tools that these entities are using to gain control over the IT Consulting Industry.Our mission at Peningo is to reverse this trend, while placing the “End” Client in direct contact with the IT Consultants they truly are seeking without going through these larger entities (Prestigious Ones), whose mission is to monopolize the end product .

The Time has come to go direct to the “End Client” and bypass these “Prestigious Ones”!

March 23, 2007

The Monopoly Game Applied To The IT Industry

Consequences of the Monopoly by the "Prestigious Ones"

 Our IT industry is being monopolized by a few large players that have formed CARTELS of companies into NETWORKS.   The larger IT players trie to monopolize demand which then is funneled through the NETWORKS, which have as the major function to imposed lower rates for the individual consultants. 

This may take the form of outsourcing the consulting assignments “offshore” where rates will be lower as the consultant will not be subject to Federal, State, and Employment Taxes.

You probably are saying to yourself that this set up is so illegal that it is not possible that our Government and some major names in Corporate America have colluded to perpetuate such an act.  It is Peningo’s opinion that it is happening.  Our response should be for the  End Clients, the IT Consultants and Peningo Systems Inc. to bypass such networks and contract directly among ourselves, excluding the organizations that are attempting to do what we believe to be illegal “Corner The Market”

It is up to us to carry this banner as many names, icons of  Corporate America  are no longer fully Americans as their stockholders are disperse all over the world and in order to obtain a few additional pennies per share are destroying the American Tax Base.  It is difficult to understand such attitudes.  We are sure that when it comes to fighting for the liberty and privileges of our democracy that protect their businesses they will not outsource such jobs.  The same Americans that they are short changing are supposed to fight and die, if necessary, for the Cartels privileges.

March 21, 2007

Outsourcing IT Jobs Offshore to support Operations in the USA is Tax Evasion!

Let's catch those lost Tax Renvues from the Outsourcers

CatchIt seems that the new culture in the IT Industry is to either Outsource the IT department to an Offshore location or to create a Captive Satellite IT Department in an Offshore Country (i.e. India).Many of the big time IT Consulting and IT Service companies are leaders in the transferring and OffShoring of IT Jobs. They’re doing this to make a few extra pennies per share for their shareholders who reside all around the globe. Corporate America is no longer Corporate America.

So, back home what is happening is that IT Jobs are lost and hourly rates / salaries are cut. The Larger IT Consulting Organizations control the flow of work…..which in many cases ends up in an Offshore location. For the Jobs that are Offshored, the employers have cut out the cost of their Payroll Taxes (ie. Federal, State, FICA, Medicare), but still have their Operations in the USA supported from the Offshore location. The elimnation of the Payroll Taxes in the USA is the “core cut in cost” that the Outsourcers are profiting on and the incentive to continue to Offshore as many jobs as they can. To me this is called “Tax Evasion”.

Yes, we’re dealing with big time “Tax Evasion”. If you’re working Physically in New York City or Chicago, you will pay from your earnings, Federal, State, FICA, Medicare, State Disability and unemployment taxes. In some case you will also owe a local City tax (i.e. NYC). Now with OffShoring, you can cut those jobs in USA, eliminating the earning and taxes paid in the USA, but still have your USA based Operations supported from an Offshore location.
We must find a way to stop this “Tax Evasion” now and bring back equity in out Job IT market!

I think one way to fight this dilemma is to bypass these Larger IT Consulting firms (who are the largest Outsourcer of IT Jobs Offshore) and deal directly with the “end clients”. By doing this, we can cut out the Larger IT Consulting firms high overhead / profit margin that is factored in their billing hourly rate to the end clients, thus cutting cost to the “end client”, while keeping our jobs, salaries and tax obligations here in the USA.

March 19, 2007

Contract Direct To The "End Client"

Let's go direct to the "End Client" and hang the Outsources out to dry!! 

hangingPeningo Systems has identified that the whole technical services industry is moving in a direction that we at Peningo do not want to follow.  Our reasons for rejecting such a direction are:

Suppliers of IT services have been organized into Networks of organizations or Cartels, with the purpose to control and enforce a reduction in the rates of individual consultants.  On the one side the Networks hopes to control demand and through the Networks force the rate reduction that will allow them a larger Margin.

The "End Client" recipient of the services continues to pay an ever increasing rate for such services, while the quality of the consultants being delivered to them, declines, as the more experienced refuse to participate in such equalitarian scheme.

 As the rates for the individual consultants have been reduced or become stagnant, the Networks have increase needs to seek "offshore" resources to maintain their margins.  These "offshore resources" generally are not in tune with the needs of the American Business Community.

We invite your efforts to participate as an Author on this Blog in order to bring to the attention of the "End Client" the benefits of contracting direct, which will result in increase rate for the Consultant and lower billing rate to the "End Client"