Archive for February, 2009

Sampling as a workforce productivity measurement tool?

If I asked you which one is more accurate what would you say?

1) 4 weeks of approved timesheets showing what your project teams have been working on

or

2) you get up and walk around twice a day and only two days a week, at different times of the day and different days of the week, to observe what randomly chosen people from different groups are working on. As much as possible try not to interrupt people or look too “suspicious” as this would change the results. What you are trying to do is observe without interference. Take notes and record your data each time. After 4 weeks you have some sample data.

At the end of the 4 week period, compare your sample measurements to the timesheets, and status reports you have for that same period.

I ran this expirement for 4 weeks by observing the following departments in our company: sales, support, R&D and service teams. The results were quite surprising. I will share the results with you in a future blog. In the mean time, I look forward to getting your feedback on which option you think is a more accurate measurement of what people are working on.

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The Measurement Inversion in Project Management Software Investments

In his book How to Measure Anything – Finding the Value of Intangibles in Business, Douglas Hubbard makes an astute observation regarding how companies measure the value of their IT or software projects:

The Measurement Inversion: In a business case, the economic value of measuring a variable is usually inversely proportional to how much measurement attention it usually gets.

measurementinversion

(Diagram reproduced from the book How to Measure Anything by Douglass Hubbard, Copyright 2007 John Wiley & Sons)

Hubbard makes this observation based on his analysis of 20 major information technology investments. Each business case having 40 to 80 key variables that were used to decide on project funding, internal resource allocation, and vendor selection.

At Tenrox, I can concur that we see this time and time again, specially for projects that fail or experience significant stress. An example of this was alluded to in my previous post. After a few more discussions by our team with the customer the conclusion seems to be the following:

The customer has now identified several key work processes in their everyday business management that were not originally scoped. As a result, even though the implementation of the original project’s scope is 95% complete they still cannot derive the full benefit of the investment that has been made. So what happened?

As the Measurement Inversion finding confirms, when making IT or enterprise software type investments, companies measure initial costs, long-term costs, and cost-savings benefits the most. Why? Because they are easier to measure. However, these are the least important measurement values for the ultimate success of the project.

The more important measurements are the probability of project completion, successful navigation of the inevitable but often necessary scope changes, technology adoption rates and revenue increase. Yet, such things are hardly ever measured because they are not easy to measure. Hubbard suggests that companies should pay a lot more attention to how they measure project value, and to what they should measure, before they ever embark on such strategic investments. Of course, based on our experience with such projects, I could not agree more.

Back to our Excel story, the company in this case focused too much on initial cost, long-term costs, and cost savings. As a result, several months later, new scope changes are being discovered that put the entire project at risk.

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It’s easier to use Excel

Our VP Services heard quite an interesting comment from some of the team members at a recent implementation of Tenrox project management software. This customer has spent several months and tens of thousands of dollars to implement the Tenrox solution for end to end billing and cost accounting. The system manages projects that are initiated from salesforce.com (opportunities that turn into projects), through to project planning, execution, billing, invoicing and accounting integration; the full project life cycle. Virtually the entire work is complete, including all integration points, live and functioning.

In what was to be a routine call on project status in preparation for the eminent go live date, the customer's project team declared that using Excel was easier and they have decided to consider reverting back to working with Excel.

I find this comment quite astonishing.

Yes, Excel is easier. Paper is even easier than Excel. As a matter of fact, just leave it to the memory of the managers to run the projects right as well as to bill accurately and on time. Lack of accountability, poor traceability (who did what when) and transparency, the potential for errors and worse fraud is also more likely with this type of thinking. One thing is for sure, there is a lot more job security in a company like this. You can make yourself indispensable with fancy manual processes and spreadsheets flying all over the place.

I hope the leaders of this company watch the news sometimes. To see how loose processes, lack of accountability/transparency can lead to total disaster … this whole financial mess we are in came from this kind of thinking. Not one person has gone to jail and yet so many innocent people have been hurt by this crisis. Everyone is losing their jobs and their homes because a few people were able to game the system, and, it seems, get away with it.

Yes Excel is easier … so is smoking, binge drinking, gambling and fraud … in the short term.

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