Thursday, December 21, 2006

Little by little

I can't believe I just spent ... hours/minutes doing ... what a waist of time.
I've said it over and over as I sat in front of my computer. "This is taking to long!"

Yesterday I figured out how much just 5 minutes an hour wasted on software that doesn't do the job quite right costs my company (or your company). It works it self out to about 173 hours a year. Per employee. So one FULL month of work is accounted for by these little 5 minute chunks. That is insane!

But what to do? When I first started working for my self I found a bunch of the little things I did in the day could be automated. Backing up the my documents folder to another drive for instance took about 20 minutes per day. I didn't like that so I set out to get a program to do it for me. Now assume I take two days and I drop everything in a search for that software. When I can't find that software I go about spending another week writing it. What's my net cost? Well I spent 1.5 weeks fixing a problem that was costing me 20 min a day (or 86 hours). So I'm ahead 26 hours, even if I was the only employee. For each additional employee I gain an additional 86 hours of work in the first year, and 86 hours of work for every employee for the subsequent years.

Now lets assume I paid someone else to build it (for round numbers sake lets say it cost me 10,000$) Sounds crazy and even I'll admit it's a bit much for such a simple program. But for this argument 10k is what we'll work with.
Second assumption. You pay your employees 40k a year or 769$ a week.
You save them 86 hours a year.
Third assumption you have 5 employees.
You now save (because of this software) 86 x 5 = 430 hours = 10.75 weeks = 8266$

Oh no seems like you're in the red for this application to the sum of 1734$. Wait wait..
Forth assumption. You plan to be in business for more than one year.
Year 2 in the black for 6232$
Year 3 in the black for 14798$

Now this was a small small case with a very simple application that saved you 2.5 minutes an hour. Imagine a custom application that saves you 5 minutes per hour of work.
Or if instead of 5 employees for the measly 2.5minutes you have 10 employees.
39,600$ cash in your pocket after 3 years.

The question I guess I'll leave you with is can you afford not to get something custom built?

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