1.8 million hours or $36 million!

You must be wondering about the title.

TIME is MONEY, isn’t it?

Software companies in India typically target revenue of around $20 per person per hour. Now you understand why I equated 1.8 million hours to 36 million dollars!

But what significance does 1.8 million hours have? Well, since initiating sales in January 2011, our product Sapience has helped analyse $36 million .. oops, 1.8 million office hours.

Sapience is an enterprise solution that provides automated visibility into Time/Effort at work. In 2011, it analysed the equivalent of 1.8 million hours, which equals to 225,000 work days, representing 10,714 person-months, or 893 person-years of work effort!

This is simple accounting, so what’s the big deal?

The BIG DEAL is what Sapience discovered at over 40 customer and pilot installations. We found the potential for companies to gain 20% more productive work hours.

We all assume that a typical work day consists of 8 hours excluding lunch time. After discounting for tea/coffee and bio breaks, and some personal browsing etc., one expects around 7 hours of work.

Sapience discovered instead that productive work averages 5.5 hours, with a significant variation between the top 20% who put in 7.5+ hours and the last 20%. Sapience is helping companies to bridge the gap, gaining at least 1 additional work hours per person per day.

In 2011, with the base 1.8 million hours, our product has or can gain 300,000 or more work hours. This converts to a value worth 6 million US dollars collectively. This is the BIG DEAL that I referred to earlier.

We are excited about delivering exceptional value and return on investment (RoI) to our customers. With our customer and user base expanding rapidly, we expect that Sapience will deliver a similar value (worth 6 million US dollars) to our TIME CONSCIOUS customers in the first 3 months of 2012.

Avinash Sethi
Chief Marketing Officer
avinash.sethi@innovizetech.com

Time/Effort is the second most important ‘currency’ at work

At engineering and services oriented companies, ‘Time’ is the second most important currency after cash. Effort is the aggregate of Time spent by all employees in the team, project, business unit or the company. In any business where employees spend a lot of time in front of PCs to deliver the services and products of the company, accounting for this ‘currency’ is difficult.

Companies adopt a rigorous process to keep track of cash related expense and revenue. Expenditure and revenue is classified under a few accounting heads.  To get the big picture, you need to track each low level financial transaction through cash vouchers, receipts, invoices to clients and from vendors etc. This is rolled up into a high level P&L and Balance Sheet that is useful for senior management to track if their business is on course. Mid level managers can track their business unit’s revenue and spend, accounting executives may compare spending under different heads against the budgets before approving more spending.

Think of Sapience as providing the P&L and Balance Sheet for Enterprise Effort. Managers at all levels can view high level trends, and drill down to more detail if they want. At the lowest level, Sapience must track ‘time’ spent by each user on different applications, activities and projects. However, unlike monitoring tools, that is not what Sapience cares about because this kind of low level data is not what companies are looking for.  Instead, Sapience does aggregation and roll up of low level ‘time’ transactions to deliver the high level P&L about ‘effort’. It provides actionable advisories to individual employees and managers, through which work output can be enhanced at every level. Delivery becomes more predictable through accurate effort calculation.

Trust at Work

This is a continuation of our previous blog where we discussed questions about Transparency at work, in the context of Sapience. A related question is Trust at work.

In a trusted relationship, each party relies on each other to fulfull their respective obligations. At work, an employee expects that management will look after his/her professional growth, assign challenging tasks, and provide any learning and mentoring that is required. The company expects each employee to put in his/her best efforts to accomplish set goals, and notify if there is anything impeding the work from being done.

Within this framework of such a trust based environment, there are checks and balances to ensure that the system is not taken advantage of. As a company becomes large, it becomes difficult to ensure that trust is not being misused. That is the reason why you have processes related to Accounts and Purchase, for example, especially since they relate to the sensitive issue of cash. Companies have employee annual reviews and output tracking (engineering metrics, KRAs etc.). The more fact based they are, the less subjective they become. Culture still plays a role – in some companies, these processes are overwhelming and designed with the premise that ‘employees cannot be trusted’. In good companies, they are there to ensure basic compliance, but are not overly restrictive.

In IT companies, ‘time’ is a fundamental contributor to output. If an individual and team puts in extra effort, more work gets done. If they don’t put in enough effort, the output suffers. Time/Effort, which is so critical, cannot be easily measured due to the nature of work. even loosely. Even an individual is hard put to know how much time he/she has put in on actual work given flexi time, work from home, late working hours and distractions at work.

Sapience now gives this information – but at a high level that is suitable for companies. The information is valuable to people and the business. Employees can use it to improve their work-life balance. Companies can gain 15-20% in work output, which is transformational to its financials (which in turn benefits every employee). Sapience is a powerful tool for employees and companies. Its deployment can be adapted to your culture by deciding how much visibility to have. You can use the ‘Anonymous’ mode where individual user identity is masked, but team and project level trends are available. Sapience won’t determine or change your culture, your culture will decide how you leverage its gains.

Transparency at work

When selling Sapience, we frequently get asked about whether the product will impact their open work culture. What do people mean when they talk of open work culture? I think two things: transparency and trust. I will discuss transparency in this blog, and trust in my next.

Transparency comes from facts. To seek transparency from the government, there was a movement to get the ‘Right to Information’ (RTI) Act passed. In companies where employees spend bulk of time in front of the PC, two key attributes of their work are effectiveness and engagement with their work. The first is measured through performance metrics (KPIs). Any company introducing KPIs faces initial resistance, but it is becoming accepted as required.

The second relates to engagement. There is no objective way to assess that today. So, whenever an employee is not delivering, the first statement that a manager makes is usually ‘you need to work harder’. The standard response is ‘I spend long hours at work already.’ A similar blame game happens from the customer or senior management when a project team does not deliver on schedule. Judgements about people’s effort, both individual and team, are subjective. It is the manager’s perception of who works hard and who doesn’t. The person who is in office all day, or who is good at marketing his/her efforts, is working hard, whereas someone working regular hours (and maybe at home) probably isn’t.  For managers too, the flexi hours, distributed locations and work from home initiatives, is making it hard to be objective about someone’s effort. Therefore, only the end result matters (not knowing why the end result was unsatisfactory, or whether the end result could have been even better with more and smarter effort).

A related issue is teams being stressed for extended periods, and the manager unable to convince his/her bosses for more staff. This is less likely to happen, if senior management can see the relative workload on teams.

There is no transparency about work hours today. You get it with Sapience. It delivers automated information on average effort on actual work by a team. Though automated, what is work is decide by the employee, which means he or she is taking responsibility of confirming what is work. Only work time data become available to the company, and personal time details stay hidden. You get credit for all of your effort, whether early/late, at home or on weekends.

Transparency leads to the right corrective steps. During a review, if a person or team, has not met goals, either it is because of lack of enough effort, or despite it. Knowing the reality helps both sides agree on remedial steps.

Team workload is a strong lead indicator of potential problems

 

Small setups of 50 employees or less are managed directly by founders and CEO. Line of sight management ensures good governance. As companies scale, it becomes increasingly hard to know what is happening in the trenches. Teams may be overloaded for extended stretches, or may be spending relatively few hours on actual work (though time in office may appear reasonable).

Our product, Sapience, helps management at all levels to discover teams that are overloaded (>7.5 work hours per person per day) or under-utilized (<6 work hrs per person per day). This information is a ‘lead indicator’ of potential operational or management issues in the project. ‘Lead indicators’ are vital as they alert you and provide time to work out the right solution.

For one thing, both often cause attrition. Employees leave either because they are stressed for long stretches, or don;t have enough work. But the real problems can be even deeper.

Low utilization can mean:

- Lack of proper management oversight, leading team members to be relatively slack in terms of work

- Inadequate inputs from client, causing the team to be less productive

- Tendency to have a slow start on fixed cost projects, creating future pressure to meet deadlines

- In T&M projects, assuming that low productivity does not matter, since revenue is assured

All of these mean a significant (and often hidden) hit to revenue and/or profitability.

Overloaded teams also reflect serious under-estimation of effort, poor management (tendency to push team too hard), unreasonable client pressure (on T&M contracts), other operational issues. These can help improve profitability on future projects by making effort calculations more accurate, or being able to negotiate higher headcount on T&M deals.

With Sapience, you can improve governance significantly, head off potential problems, and boost revenue and profit.

Getting more productivity from your existing team

Productivity depends on many aspects, including the quality, motivation, training and tools available to your team. You can hire more experienced or talented people, get better managers, or provide them with better tools. However, that’s in the future. The challenge today is how to get more from my existing team?

Improving productivity is possible if you first measure it. When your teams spend hours in front of the PC to deliver your company’s products and services, it is hard to know how much productive work is happening. Coming up with KPIs or metrics is one way, but they are hard to measure, often debatable, and not uniform across teams. More importantly, they tell you who are your strong and weak performers, but if they are already doing their best, how can productivity improve? Having said that, you should continue with measuring KPIs to know which people need assistance to improve.

An ignored aspect is actual time being spent on work and using that work time for the right activities. It is ignored because it is hard to measure. Timesheets are a waste of time since you only get what you expect. There are industry studies showing that over 2-3 hours at work are non-productive, often without employees knowing the extent. What if one hour of that time can switch to work through self-awareness? What if the 6 hours of work can be optimized for the core activities? Then, with the same team, you can get 15-20% increase in productivity without any change in process.

We don’t know of any method that can give this kind of a boost, so easily. So write to us at InnovizeTech, and find out how you can achieve this.

 

Even office bus timings can impact work!

Many large companies in India have offices in distant (and low cost) suburban locations in the city, and offer bus transport for employees. At one site where our product, Sapience was deployed, the client had a bus service with 10 AM arrival and 6:30 PM departure times. It was expected that of the 8.5 hours at the office,  around 6.5 to 7 will be available on work. As is common at all installations, Sapience initially baselined the time on actual work at between 5.5 to 6 hours. With the self-awareness that Sapience generates at individual and team level, the work hours climbed steadily to around 6.2 hours but would not go up further.

Then it was noticed that total estimated time in office (on work, as well as lunch, breaks etc.) was also only 8, instead of 8.5. It turned out the bus routinely arrived 15 minutes late due to traffic, then employees would take time to settle in. In the evening, everyone would leave 10-15 minutes early to ensure that they got the early bus. Tweaking the bus timings became the solution – obvious only because of the facts provided by Sapience.

Shifting outsourcing trends make Workforce Efficiency critical

Outsourcing is shifting gears from T&M (time and material) and fixed price deals to Managed Services. This represents a transition from contracting for services rather than bodies. The emphasis on Service Level Agreements (SLAs) rather than resources.

This has important implications for vendors. They can no longer be complacent that they will get paid based on number of people on a project irrespective of output and productivity.  Performance matters. In view of the increasingly competitive nature of outsourcing, a vendor must show high SLAs. This can only happen with increasing workforce efficiency.

Efficiency has two components: quality of staff to get the best results, and the quality of time they spend at work. Organizations track performance metrics for the first. They need our product, Sapience, for the second. Find out more about Sapience at www.innovizetech.com.

InnovizeTech selected for IIT Bombay’s prestigious E-Summit

Great News!  InnovizeTech is amongst the select group of companies who will feature at IIT Bombay’s prestigious annual Entrepreneurship Summit (http://www.ecell.in/esummit/). The StartUp Expo features some of India’s leading early stage companies, and we will have a kiosk there showcasing our product Sapience.

This is the third in a row – in the past two months we have been recognized as Innovator at Innovations 2011 in Pune, and been a finalist at Computer Society of India’s ‘2010 Awards for Excellence in IT’.

These events are a great way to network, meet other entrepreneurs and learn from industry leaders. It doesn’t necessarily lead to more business, though one does get potential leads.

Indian Stretchable Time (IST) impacts focus at work

These is a distinct difference between work patterns in US and other Western countries, and in India.  In the US, employees typically work from 9 to 5, and are very focused during these hours. Even at IT companies, where you have flexi time, employees may come a bit early or late, but their hours in the office are around 8. Lunch is short, and coffee break is just a walk to the machine and back. Outside of work hours, they make calls and answer emails using their Blackberry and other handhelds, wherever they may be.

In Indian IT companies, employees appear to spend long hours in office – often 9.5 hours or more. Most offices get filled up only by 10:30 AM, but people work till late, sometimes waiting for conference calls with clients. Yet, visiting US colleagues in the past have observed how lunch and other breaks are quite extended. An employee goes for a quick tea session, but ends up spending 15-20 minutes chatting with other colleagues as they stop by. Even when on the PC, an intended quick look at the cricket score, becomes a longer browsing session reading up the latest political scam, or Bollywood movie review. Chat and Facebook are distractions in all countries.

Our product Sapience is consistently revealing that out of 9.5 hours in the office, only around 6 to 6.5 hours is on proper work. Employees complain of work-life balance issues, while management frets about whether people are putting enough time. This big gap of 3-3.5 hours can be bridged to benefit employees and the company. With proper time management, employees can, for example,  spend 30 minutes less at work (9 hours per day), deliver 30 minutes more on projects (7 hours) and still get 2 hours for personal time. Sapience provides visibility at work to employees and the company, thereby enabling self-improvements at every level.