A Failure of Cost-Benefit Analysis

By John Parkinson  |  Posted 12-10-2009

I am always looking for ways to make the people I work with and for (and myself, of course) more productive. Often, that means looking for and eliminating wasted time.

I remember one example of this from quite a long time ago. I discovered that project team members were scattered across many separate locations over several floors in a building. By moving everyone around to a set of common, project team-related locations (a week to plan and a weekend to actually move), we salvaged almost 10 percent of their working day--which had been spent walking to meetings or trying to find people who didn't answer their phones because they too were walking around looking for people who . . . well, you get the idea.

There is good, objective research to support these kinds of simple process improvements, including research on the measurable productivity benefits of large-screen display monitors, higher network bandwidth and faster hard disk drives. Sure, these all are often (but not always) more expensive than their smaller and slower equivalents, but the gains in productive time more than offset the additional costs--and usually in a very short period.

In some cases, you can give people back as much as an hour a day in productive time because they wait less for a PC to boot (which often takes 10 minutes with many corporate software images, loaded as they are with security, monitoring and management agents) or spend less time navigating around a spreadsheet that won't fit on a small screen.

My own data, collected from a lot of places over the years, suggest that such savings can amount to around 40 hours a year for an average information worker (someone who spends at least half of the day in front of a PC)--and that's the net savings. You get some (probably quite a lot) of breakage from the actual total time saved because people don't work flat out all the time or they may already be doing something productive while they wait (checking voice mail, for example). And almost everyone needs a little slack in the day.

Still, 40 hours a year is an extra week of work (say 2 percent in a 50-week year) that you're already paying for, which translates into a couple of thousand dollars in improved productivity (and lowered staff frustration) for the average information worker. Across dozens or hundreds or thousands of workers, that level of improvement should easily drive a simple decision to give the staff better equipment.

Except it usually doesn't.

Go to most offices and you see the majority of people squinting at 17-inch monitors; scrolling backwards and forwards through giant spreadsheets; toggling between documents that should be side by side for efficient working; lost in the midst of their technology. And with plenty of time for a coffee and doughnut run while their PC boots up each morning.

Somehow, the "cost" part of cost-benefit analysis, CBA, which is always real and immediate, outweighs the "benefit" part, which is softer, although still measurable, and spread out over time. It doesn't matter that the "extra" $200 for a 24-inch wide-screen monitor will be repaid in less than three months. Or that the additional $300 for a fast drive in a laptop will save time in every meeting where it is used as a projection source.

The accountants and procurement groups don't seem to get their own ROI math, I guess. We've been here before. Remember when no one really needed a color monitor?