> From: [email protected] > Dave, while I might agree with you in the abstract, I think reality > isn't as cooperative as you suggest. The cost of licensing that > productivity improvement is a hard, easily-quantifiable expense that > must be paid with REAL money. On the other hand, the supposed > productivity increase might be hard to measure, quantify and confirm. > And the payback might also be in "soft" money ("improved staff morale", > for example).
I know a customer that needed to justify paying $8,000 a year to license a tool. He downloaded a free trial and ran some tests performing every day tasks such as browsing and editing (etc). He counted how many keystrokes it took to perform each task using regular ISPF versus the new tool. From that he was able to calculate his improvement in productivity. For example, he found the simple action of selecting members for edit saved him 4.44 hours per month. If it cost his employer $100,000 a year to employ him (roughly $52.08 per hour), then 4.44 hours per month x 12 months x $52.08 per hour = an annual cost saving of $2,774. That's for one user doing 1 function. He measured other functions and found the savings more than justified the $8,000 license based on his usage alone. For a large company with 100 users or more, this means the savings can easily reach a million dollars a year. The soft savings (faster resolution of production problems etc.) are just a bonus. > Using your example of a 10% improvement in productivity and assuming an > 8-hour workday, your hypothetical tool will allow my current 8 hours of > work to be performed in 7 hours and 12 minutes. What do I do with those > extra 48 minutes? It's getting towards the end of the day, I might not > want to get started on a new task that might take several hours to > complete. Maybe I take a bit longer for lunch, add a few minutes to my > morning and afternoon coffee breaks. Are you saying productivity shouldn't be improved because people might spend it taking longer coffee breaks? I don't know what someone might do with an extra 48 minutes per day. Maybe if they didn't have the tool they might have finished their work with only 48 minutes to spare before quitting time, and based on that decided it wasn't worth starting anything new. But maybe after they got the new tool and were able to do everything faster, perhaps they finished their current task with 1.5 hours left before quitting time? And based on that, maybe they decided it was worth knuckling down and starting their next task? If you break down the savings by minutes per day it's hard to know what someone might do with an extra 48 minutes. But that works out to an extra 240 minutes a week, or 11,520 minutes per year (based on 48 working weeks). That's the equivalent of saving 24 working days per person per year, or roughly a full working month. A lot can be accomplished in that amount of time. > I've been in meetings where someone tried to justify investing in something > based on saving 5 > minutes per day per programmer over several dozen programmers. Come on, > am I REALLY going to get that much more work done in 5 minutes! If that tool saved every programmer 5 minutes per day, that's the equivalent of 20 hours per programmer per year. And programmers are EXPENSIVE. Saving a few minutes here and there might not sound like much, but it all adds up. If the price was right, I wouldn't scoff at saving every programmer 5 minutes per day. If the situation was reversed and a new tool was introduced that took 5 minutes longer to do something than the old tool, would anyone complain? > Allow me an analogy: pretend I run a hospital where we frequently > perform a type of surgery that takes eight hours. A supplier offers me > some new technology that cuts two hours off that surgery. Do I go for > the improvement? Maybe not. I only have one surgeon qualified for the > procedure. With the new technology the doc could finish her first > surgery of the day in just six hours. But start a second surgery? I > don't think so. Two hours into the second surgery her shift ends; she > can't just leave the patient in the OR and pick up the next day! Using the the same analogy, let's say surgery used to take 6 hours but with the new technology it can be performed in 4 hours. This means the surgeon can now perform 2 operations a day instead of one. Do you go for the improvement? Dave Salt SimpList(tm) - try it; you'll get it! http://www.mackinney.com/products/program-development/simplist.html ---------------------------------------------------------------------- For IBM-MAIN subscribe / signoff / archive access instructions, send email to [email protected] with the message: INFO IBM-MAIN
