Re: Weighing the benefits of productivity improvements #value

Peter Dorfman <pdorfman@...>

All of which suggests a simple best practice: Build in your internal marketing
for the initiative, whatever it is -- and this includes a constant commitment to
getting end users to speak up as advocates/references/case study subjects for
whatever you've given them -- from DAY 1. Do NOT expect the benefits to be
self-evident, and don't be stuck playing catch-up a month before the next budget

Peter Dorfman

On Thu Aug 14 0:25 , Andrew Gent <ajgent@...> sent:

Yao and Bill,

With improved enterprise
search ... knowledge workers can reduce the amount of the time spent on search
... a saving 10% of the
time (1 hour per week) can be translated into potential saving of $1,425 a
year per worker.

I am going to play devil's advocate here. Not because I don't like your
arguments. I have used almost the exact same argument myself. But I have also had
the following discussions with senior business managers. The conversation goes
something like this:

We just spent $XXX thousand dollars last year on a new search engine. Where are
the savings from that improvement?1 hour a week is 2.5% of a 40hr week. Show me
where I am getting a 2.5% increase in production or performance? (Not theory but
actual improvements in the bottom line.)"... a saving of 3,000 x $1,425 =
$4,275,000" $4 million return on an investment of what? -- say 4 people for a
year, approximately $500K -- that's an ROI of 700% in one year. Who are you
kidding? Real ROI for
things like SAP are 200-400% over a 6 year period, not even breaking even for
2-3 years. I don't believe it.
Now having said all that, it occurs to me that there are two types of
conversation like this. The justify-your-program discussion with your direct
manager and the justify-your-expenditure discussion with upper management. What I
have just described is the latter, which is why justifying KM programs is so
difficult. Saved time and unmeasurable performance improvements simply don't go
over in budget discussions.

However, for justifying your program to your direct manager, the argument
concerning saved time is important, because usually that person is also managing
the people whose performance you will impact. So I would suggest three things for
that discussion:
Keep the argument about saving time. This has meaning to that manager (since
they directly manage
employees such as yourself)Don't bother getting into the theoretical monetary
savings, because it is meaningless. That manager is not going to see that money,
so it is a waste of time.As Stan has suggested before, use multiple arguments.
Argue the saved time. Also provide supporting evidence -- emails, forum postings,
performance review input -- from people who say your program has helped them save
time or be more effective. It is best to collect this information on an ongoing
basis so you have it handy when you are asked to justify your program. It is
hard-to-impossible to collect in a hurry at the last minute.Best,

Andrew Gent
(603) 888-0370

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