Breaking News
Engineer’s Bookshelf

# Engineers Should Study Finance: 5 Reasons Why

Page 1 / 6 Next >
Page 1 / 5   >   >>
User Rank
Author
Re: I have my MBA and....
9/30/2014 5:38:51 PM
NO RATINGS
@zeeglen "You have just related an excellent Reason #6!"

Thanks Zeeglen! Now, if I could only master more of the stuff that the IT guys do hoodwink me on!!!

User Rank
Author
Specialization
9/12/2014 7:41:51 PM
NO RATINGS
As mentioned earlier in the comments...

"There is a reason for specialization and why some people are into finance, and some are into management."

The reason is the result of a type of intelectual "fractional distilation".  The heavy brains sink to the bottom while the mostly empty ones float to the top and are directly transfered into government.

User Rank
Author
Re: Area under the curve?
8/12/2014 11:08:45 PM
NO RATINGS

Yes, "area under the curve" would lead to the correct result, as long as the area we are measuring is the Gross Profit (Revenue - Manufacturing Costs). The chart I had showed revenue. If the two are related by a simple ratio, your math is still valid. If the feature changed the gross margin (the ratio of gross profit to revenue), then the gross profit curves would be needed as a substitute.

And yes, going for the change would be correct if my handdrawn figure was accurate, as you stated. However, I just drew the chart to illustrate the concept, any given project will be different.

You aren't missing anything. I think you have it.

User Rank
Author
Area under the curve?
8/11/2014 3:17:44 PM
NO RATINGS
@Larry, for question number two your math seems overly complicated.

"Here's how I would look at it. Calculate the increased gross profit over the original lifetime due to increased sales volume. Then subtract an entire quarter of the new gross profit. Ouch."

Wouldn't a simple area under the curve analysis work?  Using the overlapping graphs you provide, subtract out the common area and then compare the area above that ccommon area to the area to the left of it.  In this case I'd say go for the change - the top's much larger.

What am I missing?

And, btw, I do love this statement: "...since the death of the product is defined by the marketplace, and is fixed."  Not only does that remined us all who's boss, it helps put urgency into perspective.

User Rank
Author
Re: Engineering and Economics
8/2/2014 7:10:05 PM
NO RATINGS
a smart phone here sells in very good price and win success, later it turns out that it sells in "expect" price 6 months later, as electronic components prices are usually going down.

so it is very important for engineer and product success for knowning some finance knowledge.

Meet embedded computer and smart automation robot machine.

--www.quickembed.com

User Rank
Author
Re: Engineering and Economics
8/1/2014 12:32:48 PM
NO RATINGS
Thanks for your article, never was a truer word said. So many engineers know there craft but don't understand time to market and margins etc.

User Rank
Author
Re: A contrarian view
7/29/2014 1:45:19 PM
NO RATINGS
David - The big difference between finance folks and engineers is that engineering creates things that are new. As such, a broader knowledge base, even outside of the field leads to a broader perspective, which leads to more practical designs.

I don't think engineers need to be able to do detailed financial analysys, but an understanding of the principles can be helpful.

User Rank
Author
Re: A contrarian view
7/29/2014 12:15:07 PM
David,

Thanks for spicing up the debate. I'm surprised that no one has replied to your contrarian view.

Of course you are right: All employees do not need to know everything about a business. But knowing some things outside of your specialized domain can be advantageous- for your company, but especially for you. A lot of innovation occurs at the nexus of business and technology.

In my own case I took single semester cousres on intellectual property and industrial engineering. Those legal and financial courses laid the groundwork for me to contribute at a higher level than pure engineering, especially when combined with engineering.  I've also noted that top engineers in development centers I've managed have a nice handle on the business as well, and are the ones most likely to become thought leaders in their organizations and advance either on technical ladders or management ladders. That's why I recommend engineers knowing the basics of business and finance.

But if you're happy with a pure technical focus- go for it!

User Rank
Author
Re: I have my MBA and....
7/28/2014 9:55:54 PM
NO RATINGS
@Karen

Title is "...5 Reasons..."

You have just related an excellent Reason #6!

User Rank
Author
I have my MBA and....
7/28/2014 3:06:05 PM
NO RATINGS
I think the biggest benefit is that "knowledge is power." It minimizes the potential for me to be hoodwinked by finance guys!

Page 1 / 5   >   >>