Three Pencils

     How Many Pencils?

One of the most ubiquitous conversations that occurs in organizations is about productivity, although the word itself is rarely used.  The conversation might be about the need to get more value from the software development budget or the ability to deliver more new functions with the same staff.  The concepts of labor, capital, material and total factor productivity are an undercurrent in these conversations even if the word productivity is not directly mentioned.  There are several possible reasons why the word productivity is not used in polite software development company.  Those reasons range from a mistaken belief that productivity concerns are reserved for blue collar occupations to the complexity of defining productivity in software development and maintenance environments.  Complexity is often the most pernicious reason that keeps productivity in the background during strategic conversations that affect products and jobs. However, with the exception of total factor productivity, the mathematical computation of labor, material or capital productivity appears to be very straight forward. 

The equation for productivity equals output divided by input. The simplicity of the equation obscures the complexity hidden in the term productivity.

Unwinding the complex concepts of measuring productivity begins with understanding and making three critical decisions that define the output side of the equation. (more…)