Wednesday, October 15, 2014

Why time tracking may be hurting more than your productivity

If you work for a consultancy time tracking is obviously important because you need to accurately bill the client for the work that was done. I'm not going to address that here because I don't work for a consultancy. Some companies that are not consultancies also do time tracking on an individual basis. The reason they typically give is to track costs related to different products or different parts of a product. I have two questions I want to look at: is this information useful and if it is, can we get it another way?

First let's take a look at the typical process in an agile development environment. The product manager works with customers, marketing, sales, whatever to figure out what features are important to the customer. These features are turned into stories and prioritized. The engineering team works on these stories in roughly priority order to meet the business needs.

Seems pretty straightforward so far, right? So, let's say we have two products that we sell. Let's also say that product A costs 10 times as much as product B. Some customers purchase one and some purchase both. After analyzing our time spent we determine that we are spending 40% of our time on product A, 40% on product B and 20% on stories that benefit both. We look at the cost vs revenue and determine that we are showing a loss on product B and a healthy profit on product A which more than offsets the loss on B. If that was the end of the story we'd conclude that we need to shift more time to product A, increase the cost of product B or get rid of product B altogether.

So what's wrong with this analysis? Several things in my opinion. The first is that it doesn't take into account the product offering as a whole. For customers that purchase both products, does the value of product A decrease without product B? What percentage of customers who use product B eventually also buy product A? A cohesive set of products is often more valuable than the individual parts. If we increase the cost of product B or get rid of it, how does that affect our sales of product A and/or B? In retail terms, is product B a loss leader?

The second and probably more important problem is that it ignores the fact that the process we outlined above means we are always working on the things that we believe are the most important to our customers. If our customers are more interested in new features for product B, why wouldn't we focus our time on product B? We should be concerned with overall satisfaction and revenue, not the satisfaction or revenue on any given part.

So let's say we understand all that but we still want to track the time spent. Is there a better way to get the information than having each individual track their time spent on each product? Part of the job of VPs/directors/managers is to be the interface between the business needs and the implementation of those needs. They are aware of sales data and they are also aware of how much time is being allocated to the various products because they are involved in the agile planning process. If we completed 40 points worth of stories for product A and 40 points for B, that gives them a pretty good estimate of the allocation of time for the team.

Maybe there is an argument for time tracking at the individual level that I am missing here, but I have a hard time seeing any concrete benefits. Even if the burden is very small, the small things tend to add up.

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