Gimme The Names

A lot of the projects that we work on are touted as being labor savings projects.  I say "touted" because often even though the projects are successfully implemented we never seem to see any reduction in labor costs.  Frustrated with this one of my old bosses used to have a stock reply to labor savings projects that usually went something like this:

Requester: If we do this project we'll save 80 hours of engineering effort per week.

Boss:  Gimme the names.

Requester: The names?

Boss: Yes, 80 hours per week is 2 people.  I want to know the names of the people that you'll be firing.

Requester:  (significant pause) Um, Uh, We weren't actually planning on firing anybody.

Boss: Well if no one is leaving how are we getting any labor savings?

Requester: We were planning on using them to do something else.

Boss: Before I'll let you "rehire" those 2 justify to me the merits of this something else.

The boss wasn't really on a mission to fire people but he did want to make sure there was a sound justification for what we were doing.  Fortunately there are some things you can do to make sure you get the economic return you were expecting.

A way to truly judge the effectiveness of a project is through the use of adequate metrics.  In the example above it is probably easy to track the total engineering hours.  The problem is that it is not specific enough.  Looking  at the in total doesn't show any change if the hours are simply being shifted to other tasks (which is what the boss is seeing and what is so frustrating).

Developing a specific metric related directly to what the project is about can show a true before and after picture.  For example, engineering hours developing general arrangement drawings if the project relates to that.  The difficulty is that these specific metric probably are not generally collected and there will be some hesitancy to go to the effort to collect the necessary data.  However, if you make it part of the project and it is seen as a way to help get the project approved you'll get more acceptance.  You might also consider making the data collection temporary to be used to establish a "before" scenario and then drop it after you are sure the "after" scenario has reached a steady state.

The other advantage is that sometimes the "something else" turns out to be exactly what was done before meaning nothing has changed.  You'll see this where a new system is installed and people choose not to use it or don't know how to use it and instead continue on as before.  Project related metrics can help show this so that corrective action can be taken.

By including project related metrics in your project plan along with defining the "something else" if appropriate you can show how and where labor savings are being achieved.  Who knows maybe it will help prevent your name from being added to the list.

"Your name is on my list" photo by schlaeger

If this topic was of interest, you might also like these:

• Kent Blumberg on IT as an Accelerator
• Developing a Credible Business Case
• Or the posts in the "Strategy & Management" category