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info@b-slate.com |
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Newsletter April 2004 |
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Measure Right, To Improve Process for Profit |
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Jay Kalawar, CEO, Business Transitions, Inc. |
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| “Forty
years ago people doing knowledge and service work were still less than one-third
of the workforce. Now such people account
for three-quarters if not four-fifths of the workforce in
all developed countries – and their share is still going up. Their productivity rather than the productivity of the people who make and move things is the productivity of a developed economy. It is abysmally low." Peter Drucker, Post Capitalistic Society, 1994 |
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Peter Drucker was prescient a decade ago when he made the above insightful comments. The advent of web-based technologies over the last ten years has, undoubtedly, impacted businesses world wide in many ways, but has it improved the productivity of the knowledge worker? And, if so, how do we measure productivity of knowledge-work? Are we measuring right for productivity? Let’s take one example to illustrate the problem of measuring productivity in a knowledge work process. Developing a software application to support a business process is knowledge-work: it requires understanding of business objectives, how they are to be accomplished, roles and responsibilities of people involved, and how best to accomplish the objectives at a reasonable cost. It also requires communicating such understanding to other knowledge-workers who can translate it into a machine language to make a computer system come alive and work in harmony with people involved in the business process. Obviously considerable collaboration is required among and between business process people, business and systems analysts and the system builders. How is the productivity of such a knowledge-work process measured? In most cases, measuring productivity of an IT application development process has been reduced to a combination of number of error free lines of code per person hour, total dollar cost-benefits and elapsed time. By doing so, a set of measurements suitable for widget production is being used to measure efficiency of a complex knowledge-work process. |
What is measuring right? A key parameter – the efficacy of collaboration among the various constituencies, which then translates into specific actions in the knowledge-work process – is not measured. When the degree of collaboration is not measured, the performance of the knowledge work process cannot be improved. This is particularly relevant as more and more US companies are implementing or considering off-shoring of their IT applications development processes. The apparent cost reductions from off-shoring, of up to 40%, quickly get cut down to 10 to 20%, especially because companies rely solely on measures appropriate for widget production and do not measure the key collaborative action factor of knowledge-work. Similar arguments can be made for other complex knowledge-work processes such as training and development, research and development, marketing and new product development and roll out programs. The question that should be asked which is often not, even as a search for productivity improvements in knowledge-work processes continues, is how do you measure the efficacy of collaboration in your knowledge-work process? At BTI, we have developed a CollaborAction™ Index to assist our clients measure, evaluate and improve upon collaboration based action in their knowledge-work processes. To find out more, please contact us at info@b-slate.com Copyright 2004 Business Transitions, Inc |
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