Xyberspace Case Analysis

960 Words4 Pages
Xyberspace consulting, ING. Case analysis The main controversy confronting Xyberspace is the method of allocating expenses associated to their training and educational services group in 1999. Since the services group’s actual cost has gone beyond its original budget and the consulting group didn’t received as many as training session as planned at the beginning of the year, the actual allocation rate charged to each training session has changed to $665, resulting in an extra $112 per session and 67,200 in total for consulting group. This result no wonder makes David Anderson feel unfair because his group have to cover some overrun spending which originally allocated to training groups while training groups’ absence for training session…show more content…
However, making budget is an essential process for every company to control cost. The process requires every manager in profit centers to participate and responsible for overrun. Just as David says, “If they have to bear the brunt of budget variances, they may think twice before going to another conference or paying extra for meals.” For same reason, under budget’s pressure, customer care group should consider the potential loss of their absence from training sessions. Another alternative choice is outsourcing. If Xyberspace chooses to outsource training program outside the company which only costs $500 per session, it seems like the cost allocating problem would disappear and the company can save a large amount of money in a year. However, a lot of fixed costs, such as software licenses and maintenance contract fee, still need to pay and hard to control internally. Beside, as a rapidly growing company, Xyberspace’s expanding would allocate its fixed costs across more training sessions in the future. In addition, providing premium e-strategy to customers is Xyberspace’s core mission and market differentiator. According to the company’s founder and CEO, “Our goal is to have absolutely the best-educated consultants in the marketplace and training our consultants in-house is critical to achieving this goal.” High quality and customized training program can’t give way to less cost, especially it is just short-term economical. Or the customers will doubt Xyberspace’s
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