How to Measure Productivity Benefits and Losses of New Technology

Technology exists to make our lives easier. Even simple machines and basic tools saved our ancestors countless hours of manual labor; these days, the latest gadgets promise to shave minutes off our already-lightning-fast tasks, help us communicate more efficiently, or even fully automate tasks that once populated our to-do lists.

When you purchase a new device, upgrade to a new kind of software, or phase out some antiquated technology, your instinct tells you that your team will be more productivebut what do you have to back that up? Some companies, like Dialpad, have been able to run general studies; confirmation that eliminating desk phones can save a company more than $1 million over the course of 6 months. But how do they calculate this figure? And more importantly, how can you make these calculations for your own investments in technology, before you even pull the trigger on them?

Potential Values of Upgrades

First, make a list of all the ways that your planned purchase would benefit your company. These are some of the most common ways:

• Reduced direct costs. Technology could help you eliminate direct costs altogether. For example, if youre paying hundreds of dollars a month for a subscription service that could be automated using an inexpensive app, those cost savings would be instantly realized.
• Task expedience. As technology consultant James Gaskin explains, even though it may seem expensive to replace your years-old desktop with a new computer, you could easily make up that cost in terms of your employees new level of performance. For example, if the new computer performs actions, on average, 10 percent faster throughout the day, your employee will be able to get 10 percent more tasks done.
• Setup, teardown, and maintenance. Dont forget requirements like setup, teardown, and maintenance of your new technology. For example, how much does it cost to keep your physical servers in top condition? Would a better model or a different service be able to spare you this time?
• Latency, hiccups, and misfires. Some forms of technology, especially older varieties, are prone to issues like latency and miscommunications. If investing in a new product, such as new product management software or a better office product, can reduce the likelihood of mistakes, youll save countless hours of effort over time.
• Employee morale. Finally, dont underestimate the effects on employee morale that new technology can have. Working faster, smoother, and with more advanced technology will make your employees more satisfied with their jobs, driving them to become more productiveand more loyal to your company too.

Collecting Employee Data

With a surface-level view, you can easily estimate how much a particular upgrade might be able to save you, but how can you measure this effectiveness once youve rolled out the change? Your best bet here is to collect data on your employees, with the following tactics:

• Time tracking. Time tracking is the most objective standby for measuring employee productivity, but as the Harvard Business Review notes, it cant give you the full picture. Track how long your employees spend on given tasks, but dont use this data as the ultimate indicator of your technologys effectiveness. Use it as one of a series of measurements.
• Total output. As the Microeconomic Review explains in an exploration of the steel industry, sometimes you can measure the impact a technology has by looking purely at the output. In this simple example, a steel mill that produces more assets is clearly more profitable, by a fixed amount, than its competitor. You can do the same in your workplace, even if youre measuring how many campaigns you can run simultaneously instead of how much steel you can produce.
• Subjective surveys. Finally, turn to subjective surveys to see if your employees and their supervisors feel like the technology is making them more productive. These serve as a complement to your objective data and may lead you to new insights about how your employees work best.

Before, during, and after your technological upgrade, you should have a general idea of how much time and money that upgrade is going to save you. While most technology is designed to make things more efficient, not all technologies are equal in their capacities. The more thoroughly you plan for these new acquisitions and advancements, and the better you understand their effects, the more productive your workforce can become.