Sunday, January 08, 2012

Productivity is not equal to increased Profit

Have you ever been part of a tool selection team ?   Have you proposed procuring any new tool to your supervisors ?

Image: John Kasawa /

I have done this many times. I have been part of  such tool selection committees.  Most of  the times we as developers are impressed with the new tools for many reasons.  The reason for falling in love with a tool could be because of :
1. Ease of use,
2. Stability,
3. More features,
4. Better communication, etc

All the above reasons are valuable, and in addition I have seen most commonly quoted reason being "Improved Productivity".

Let us discuss more on this subject. If the tools getting procured are going to have an impact on multiple groups, one should look at impact of productivity in one group on the other.
Let us take a fictitious  example of Product owners procuring a tool that can generate User Stories with a click of a button.  Product Owners are now productive, and they have increased generating User stories by >20%.   What if we don't have similar tools at developers end to churn out these stories ?
These generated user stories would go and sit in the backlog  as inventories, which are wastes.

One should be cognizant of the fact that Improved productivity may not  increase in the bottom line. In fact, it might cause bottlenecks and increase in inventory.

One of the key things to ensure improved productivity is by limiting the work in progress (WIP).  If a tool that is getting procured is going to affect WIP, it has negative consequences on the system.

Whether the tool is a high resolution communication device or a simple document repository one, the stakeholders shouldn't get carried away only looking at productivity.   If the stakeholders intent is long term investments, they should look at the impact on their bottom line.  Tool selection might increase productivity in one corner of the organization but might impact the bottom-line at the other corner.

Summary: Tools are important for the organization. During tool selection process, improved productivity shouldn't be the driver for new investments.

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