It doesn’t sound like much. Just sixty seconds. Not even enough time to grab some water or use the restroom. Barely enough time to greet a colleague. We rarely think much about the value of a minute, either because it seems like we have so many of them that they’re not worth worrying about… or because we’re so busy scrambling when we don’t have nearly enough of them.
For modern knowledge workers it’s easy to lose minutes here and there to slow, inefficient technology and business processes. We seldom think much of it, but the costs add up very quickly.
Imagine one of the least-expensive knowledge workers, one that costs $10 per hour. When we do these cost analyses, please feel free to use whatever cost definition makes the most sense to you – from base wage only to fully-loaded (wages, taxes, bonuses, benefits / perks, office space and equipment, management overhead, etc.). We base our math on workers that are on the job eight hours per day, five days per week, fifty weeks per year (2000 hours per year). If you’d like us to adjust for other circumstances, our salespeople and customer service managers have the tools to make these analyses fit your needs.
If our hypothetical $10 per hour worker loses only one minute per day, that adds up to $41.67 in lost labor per year. Not a huge number, but in reality it’s almost never just $10 per hour and it’s never just one minute per day. A more realistic set of numbers is a $20 per hour clerical worker losing 15 minutes per day, which adds up to $1,250.00 per year. Or a $50 per hour manager losing 10 minutes per day, costing $2,083.33 per year. Or a $125 per hour sales executive losing 12 minutes per day, costing $6,250.00 per year (around the cost of a typical company car).
How many of your organization’s purchasing and process decisions incorporate this math? We’ve seen some crazy outcomes. An organization whose workers logged in and out of so many different systems each day that the base wage cost alone of the time spent doing that was equal to 0.1% of their overall gross revenue. Quibbling over a dollar or two a month in spam management while their median workers spent over $25/month in base wages dealing with spam. Buying bargain-basement desktop computers “saving” $1,150 in up-front purchase cost and losing $3,500 in base wage cost over the life of the machine – just in starting up and closing down time at the beginning and end of each day, not including the seconds and minutes lost in-between or the significant amount of additional IT labor spent on maintenance and replacement. Overall, each $1,150 “saved” wound up costing over $10,000.
This is not as insane as it sounds. Capital expenditures (CapEx) are very easy and very mandatory to keep track of. Every successful organization controls their expenses, but it can only control what is measured. If you don’t pay attention to the impact of CapEx on operational expenditures (OpEx), then it’s very easy for the fiscal tail to wind up wagging the dog. CapEx tracking is relatively east and mandatory, OpEx tracking is relatively difficult and optional, and figuring out the impacts and interactions between the two requires significant time and effort on the part of already overburdened managers and, even then, often requires an outside perspective to really understand.
Additionally, organizations often silo expenses in ways that actively encourage inefficiency. Departments wind up managing expenses in much the same way that a small child avoids eating food they dislike – they push it around the plate until it “disappears” into someplace untracked and unmanaged or outside of their section of the P&L. Because of this, it’s not at all rare to see CapEx decisions being made that result in “savings” that cost an order of magnitude or more in additional OpEx. In a knowledge labor-intensive organization, it’s not even that rare to add up all of these unnecessary inefficiencies and see them exceed the organization’s net profit.
Not every dollar of these costs can be recovered, as people never work at 100% efficiency. Some do an excellent job “recycling” these lost minutes into other forms of productivity, but and some will just treat this as extra personal time for gossip or social media or whatnot. Even recapturing a fraction of the time lost would make a material difference in the financial statements of many organizations.
At BrilliantRoot, we don’t view our role as merely helping our customers survive their IT systems. We want to help them grow and thrive by helping them to maximize their net profit per knowledge worker. And the truly beautiful part of this is that eliminating inefficiencies and annoyances makes your workers and managers significantly happier in their jobs. We’re not pushing them harder to make your organization more money. We’re helping them work better, with less frustration and fewer obstacles.
BrilliantRoot’s holistic approach to technology management can help your company make more profit, with happier employees, better vendor relationships, and higher customer satisfaction. Let us know when you are ready to begin.