I like the idea, but a lot of other factors are missing from the analysis.
1. I’ve yet to find a service that saves 5 hours per week per employee. How do I estimate the actual savings in time?
2. Work expands to fill available time. Will my employee use that time to the company’s advantage?
3. How much does this increase or decrease my personal time required as supervisor?
4. From a financial point of view, I’m still paying the employee and the service, so either I need enough services and time savings that I can eliminate a job, or the service has to have positive ROI of its own.
And probably many more. I often receive proposals of this type, that I could be “saving” so much by buying something. The money goes out up front, the savings are supposed to trickle back in these hard to quantify and use ways.
> I’ve yet to find a service that saves 5 hours per week per employee. How do I estimate the actual savings in time?
Sure you have, albeit by another name likely.
GitHub/Gitlab as a service easily saves more than 5hrs a week.
I have custom slack bots that easily save me a couple hours a week in aggregate.
Then there’s services such as managed CI or, heck even things like the “search” function on a wiki, those are all things that can be provided by a service.
But a tool like this will show you much much it might be worth investing in a service vs hiring someone dedicated and running something yourself.
> Work expands to fill available time. Will my employee use that time to the company’s advantage?
There’s two points to this argument;
1) if I save an employee time, what value does that give me?
2) if I’m an employee, and efficiency is improved; I still have to be in the office 9hrs per day.
The first argument is at odds with the notion that most knowledge worker jobs tend to only be around 40% productive.[0]
There’s no evidence that it goes lower than that; most of the reasons that percentage is so low, though, is friction. Friction can take many forms such as a bureaucratic process for approvals to change things- all the way to “needing to talk to that one guy who knows the thing, and teams is having an outage”. It’s hard to quantify, but there are so many frictions and there is evidence to suggest that removing these frictions increases productivity, not lessens it. (To a value of 80% which represents a significant increase).
(I will supply citations when I get to my pc, this comment is from a phone)
Problem 2 goes into the expectation that if you’re in the office you must be busy- there’s no value to you the employee of the company gets more efficient! Except obviously that’s not true in a more macro sense; I wouldn’t argue that. I would instead argue that the feeling of empowerment that comes with doing actual work and not busywork will make people more engaged and not less.
You wouldn’t feel motivated in your job if you had to assemble your chair each time you wanted to sit in it, it would be tedious and not challenging and certainly cause you to mentally check out.
> Work expands to fill available time. Will my employee use that time to the company’s advantage?
Take a management class or three, it'll save you a lot of money.
Seriously. If that needs to figure into the evaluation of the service, something is deeply broken in the culture of your company. Not because employees goof off - it happens, and only some amount of that is under your control. But because you assume that given any chance, people would goof off more.
That's far from normal. It usually happens if employees feel mistreated, or if they're not given a fair share of the value they create. Possibly if they're already halfway to leaving.
> 4. From a financial point of view, I’m still paying the employee and the service, so either I need enough services and time savings that I can eliminate a job, or the service has to have positive ROI of its own.
More likely, there's other work that the employee could be doing that will help your company grow
Under "Service cost" it could use an option for "one time purchase fee". Obviously that is going to create special cases for the "amortizations" output
Might be interesting to have a line items for "cognitive cost of having to deal with the crappy in-house tool when you know a good SaaS alternative exists" and "time spent wrangling the finance department"
A cynic might suggest 'cognitive cost of having to use overblown SaaS tools instead of a simple list, calendar event or email/chat message' and 'time spent making additional records in or collecting vanity metrics from the SaaS to justify its continued existence' ought to be in there in the interests of balance.
I was going to say. The biggest cost for most organizations is the recruitment and training costs of an employee that leaves due to demotivation stemming from having to do "robotic" tasks.
Oh god, those cases when you'd love to try some tool or increase the plan to go over an auditing line but no-one has the energy to push it through the bureaucracy
Hmm, cost of meetings (similar to training costs) is a good idea, definitely an issue I've seen before - thousands of dollars wasted arguing over $50/month for a tool.
Let's plug in numbers. This says that if a service costs 125$/month/employee and I have 1000 employees ($125000/month) I will save ~5 million a year.
However a service costing 1.5 million at such a company has other costs.
Namely that a product that costs that much almost always needs an in house support team. I have never seen the case where an expensive product also didn't need 2-3 people in just to maintain and support it. But the employee time savings is still worth it.
The next cost is much harder. In the tool we said this will save everyone 1 hour a day. However saving people time is not normally what a tool actually does. PagerDuty for example doesn't save people any time, it just sends alerts. Alerts that come from another tool that must be set up. At 40/person/month for 1000 people, that is 40,000 a month for zero "saved time." The value of pagerduty for very different.
But anyone who has been in the field has seen, that list hidden cost is that a paid service isn't normally a perfect fit. It is missing something, or your particular use case doesn't map cleanly. You then have an army of people working around the tool, saving negative time. The business might have reasons to still use that tool. But saving time is not one of them.
So seeing this tool tell me that a service which cost $2,000,000 a year is going to save me $5,000,000 feels like naive marketing nonsense. And it isn't even marketing a product.
> PagerDuty for example doesn't save people any time, it just sends alerts.
Have you tried building a pagerduty in house? That is literally the time save. The "value of pagerduty" is still measured the same way as any other tool.
Do I build it custom in house? Do I pay someone else a modest amount?
That is what this tool is doing and is geared towards startups who make this decision very regularly. It's got 5 question boxes - of course, there's no way it's going to cover an enterprise consideration that needs 3 analysts to decide whether buying that SAP module is really worth $3mm/year.
Someone made a free tool and you're complaining about it as if it shouldn't exist. Very unsupportive.
I feel you missed the point (or maybe that the landing page for this tool should better communicate the value and when you should use it).
If you're a relatively small company looking to use a plug-and-play SaaS product with a modest subscription fee to serve some business purpose this is a great tool to get some quick and dirty numbers on whether it would be better to use or maybe build in house or go another route.
If you're purchasing some large, highly configurable enterprise tool (with high implementation and support costs) that all 1k of your employees will use daily and you'd like to understand cost/benefit, other means of calculating this should be used (and it would likely require days to weeks of multiple people's time to make such a calculation).
I see this exact same thing. Let’s take Splunk into consideration. Administrating splunk, all of our feeds into splunk, and trying to keep us from overrunning our quotas is about 1 full time person, and half a full-time person worth of DevOps work yearly. That’s in addition to the subscription costs we pay to Splunk directly.
Every piece of software requires in-house support; even pagerduty and their ilk require management time to set up schedules, adding and removing people. It’s not a lot of time, about .1 to .2 of a person’s time for all of our pageable employees, but a manager’s or leader’s time is not cheap.
What's this type of calculator often misses is how nuanced and complex is to estimate the cost of employee time.
It's not just the cost of an employee salary per hour... Is the opportunity cost of everything that employee could have instead done.
After all it isn't as though with more money you can just immediately get more fully ramped sophisticated employees to add value... All of that is complex.
There is also the cost of not understanding details that you left to someone else. If you save time but no longer know what is happening you can get into big trouble when those details matter.
This looks really cool. I put in some numbers for a service that I am considering, and the answer was the opposite of what I was intuitively expecting, which proves the need for something like this.
Some feedback:
- s/(one person)/(per person)/g
- The "cover costs" section doesn't really make sense to me. For example, in one example, the breakdown says that I will burn $10000 extra, but that I will also cover costs with 23 hours of use. How does it know how much use it will take to cover costs? How does it know how much profit is generated per hour of use? Am I misunderstanding something?
- It would be nice if the formula used was displayed in small text or in a tooltip or something.
The "cover costs" assumes your people will use the tool 8 hours a day. By the productivity you gain, it calculates how much you save in salary.
The "free up an hour" also assumes your people will use the tools 8 hours a day.
The "cover costs with" calculates how much your people must use the tool for it to eventually pay for itself. If it's larger than 8 hours, then the tool will never pay up.
I've been going back and forth on whether or not Hey is worth it for me. I really liked my trial, but $100 just feels like a high price. But according to this calculator I'd only have to value my free time at $3/hour to start "saving money".
For simplicity there are a whole host of underlying assumptions about what a work day is, what time spent means , etc.
Explaining at least some of those assumptions is on my list of improvements, but there will never be a 'correct' answer in a generic form like this. It's more intended as a quick investigation/conceptual check.
Okay I really like the idea. I think the bottom line whether the SaaS is worth the cost with the premise is that the SaaS saves time. However, time saving (item 4) is pretty difficult to gauge. Therefore, I suggest having a version where time saving is the output.
So then the question become, I have to believe that this SaaS will save XXXmin per employee for me to consider buying it.
I think a lot of users are missing the point. I don't see this tool as a final decision maker and it can never be one. The final decision has a lot of nuisances to that it is difficult to capture in one tool, so might as well just open a spreadsheet and bang it out.
I see this tool as a quick a simple way to eliminate all the tools that might look shiny and slick or save a few clicks, but doesn't actually save employee's time at all.
So the decision becomes, I like the way this new SaaS feels or looks than our current one, but is it really worth the additional cost?
Exactly, and scale is important too. The initial target audience was small (as in very small, maybe 1-10 people) businesses, whose owners often don't intuitively understand how beneficial small services costs can be.
In 99% of the cases, I rather buy the service than develop it from scratch and support it long-term. Most consumer-facing services I've seen are relatively cheap. I only tend to develop existing things if I find there are some functionalities which either I cannot buy directly or they require a special setup that does not go well with security and other constraints.
This is look at the cost, but what about value? Say, the total cost per hour (salary, insurance, benefits) is 50$, but how mych value does he/she create?
I used to do this calculation with 2x assumption. Say, a new IDE plugin saves 100 engineering hours, so it's 50 000 in cost and another 50 000, because they spend time creating features.
The two biggest line items are not easily measured and thus not included: The removal of an external dependency that you don't control and may not evolve with your needs, and the loss of the continuous improvement in that dependency without continuous investment from you.
but there's a hidden cost, that's never spoken of. cost of forgotten knowledge or expertise. say you use AWS RDS | Aurora, on paper it's cheap. AWS runs everything for you. what happens, when one day you need the knowledge to run your own db ? or migrate to something different altogether ?
[+] [-] projektfu|5 years ago|reply
1. I’ve yet to find a service that saves 5 hours per week per employee. How do I estimate the actual savings in time?
2. Work expands to fill available time. Will my employee use that time to the company’s advantage?
3. How much does this increase or decrease my personal time required as supervisor?
4. From a financial point of view, I’m still paying the employee and the service, so either I need enough services and time savings that I can eliminate a job, or the service has to have positive ROI of its own.
And probably many more. I often receive proposals of this type, that I could be “saving” so much by buying something. The money goes out up front, the savings are supposed to trickle back in these hard to quantify and use ways.
[+] [-] dijit|5 years ago|reply
Sure you have, albeit by another name likely.
GitHub/Gitlab as a service easily saves more than 5hrs a week.
I have custom slack bots that easily save me a couple hours a week in aggregate.
Then there’s services such as managed CI or, heck even things like the “search” function on a wiki, those are all things that can be provided by a service.
But a tool like this will show you much much it might be worth investing in a service vs hiring someone dedicated and running something yourself.
> Work expands to fill available time. Will my employee use that time to the company’s advantage?
There’s two points to this argument;
1) if I save an employee time, what value does that give me?
2) if I’m an employee, and efficiency is improved; I still have to be in the office 9hrs per day.
The first argument is at odds with the notion that most knowledge worker jobs tend to only be around 40% productive.[0]
There’s no evidence that it goes lower than that; most of the reasons that percentage is so low, though, is friction. Friction can take many forms such as a bureaucratic process for approvals to change things- all the way to “needing to talk to that one guy who knows the thing, and teams is having an outage”. It’s hard to quantify, but there are so many frictions and there is evidence to suggest that removing these frictions increases productivity, not lessens it. (To a value of 80% which represents a significant increase).
(I will supply citations when I get to my pc, this comment is from a phone)
Problem 2 goes into the expectation that if you’re in the office you must be busy- there’s no value to you the employee of the company gets more efficient! Except obviously that’s not true in a more macro sense; I wouldn’t argue that. I would instead argue that the feeling of empowerment that comes with doing actual work and not busywork will make people more engaged and not less.
You wouldn’t feel motivated in your job if you had to assemble your chair each time you wanted to sit in it, it would be tedious and not challenging and certainly cause you to mentally check out.
[0]: https://talentculture.com/how-knowledge-workers-really-spend...
[+] [-] groby_b|5 years ago|reply
Take a management class or three, it'll save you a lot of money.
Seriously. If that needs to figure into the evaluation of the service, something is deeply broken in the culture of your company. Not because employees goof off - it happens, and only some amount of that is under your control. But because you assume that given any chance, people would goof off more.
That's far from normal. It usually happens if employees feel mistreated, or if they're not given a fair share of the value they create. Possibly if they're already halfway to leaving.
[+] [-] moonsu|5 years ago|reply
More likely, there's other work that the employee could be doing that will help your company grow
[+] [-] osel|5 years ago|reply
A few people expressed interest in embedding something similar in a landing page, so I've open-sourced the code for others to use if they wish.
[1] https://news.ycombinator.com/item?id=22497093
[+] [-] glaberficken|5 years ago|reply
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] Sebb767|5 years ago|reply
[+] [-] glenjamin|5 years ago|reply
[+] [-] notahacker|5 years ago|reply
[+] [-] glaberficken|5 years ago|reply
[+] [-] dtech|5 years ago|reply
Oh god, those cases when you'd love to try some tool or increase the plan to go over an auditing line but no-one has the energy to push it through the bureaucracy
[+] [-] osel|5 years ago|reply
[+] [-] _jal|5 years ago|reply
[+] [-] georgyo|5 years ago|reply
Let's plug in numbers. This says that if a service costs 125$/month/employee and I have 1000 employees ($125000/month) I will save ~5 million a year.
However a service costing 1.5 million at such a company has other costs.
Namely that a product that costs that much almost always needs an in house support team. I have never seen the case where an expensive product also didn't need 2-3 people in just to maintain and support it. But the employee time savings is still worth it.
The next cost is much harder. In the tool we said this will save everyone 1 hour a day. However saving people time is not normally what a tool actually does. PagerDuty for example doesn't save people any time, it just sends alerts. Alerts that come from another tool that must be set up. At 40/person/month for 1000 people, that is 40,000 a month for zero "saved time." The value of pagerduty for very different.
But anyone who has been in the field has seen, that list hidden cost is that a paid service isn't normally a perfect fit. It is missing something, or your particular use case doesn't map cleanly. You then have an army of people working around the tool, saving negative time. The business might have reasons to still use that tool. But saving time is not one of them.
So seeing this tool tell me that a service which cost $2,000,000 a year is going to save me $5,000,000 feels like naive marketing nonsense. And it isn't even marketing a product.
[+] [-] irjustin|5 years ago|reply
> PagerDuty for example doesn't save people any time, it just sends alerts.
Have you tried building a pagerduty in house? That is literally the time save. The "value of pagerduty" is still measured the same way as any other tool.
Do I build it custom in house? Do I pay someone else a modest amount?
That is what this tool is doing and is geared towards startups who make this decision very regularly. It's got 5 question boxes - of course, there's no way it's going to cover an enterprise consideration that needs 3 analysts to decide whether buying that SAP module is really worth $3mm/year.
Someone made a free tool and you're complaining about it as if it shouldn't exist. Very unsupportive.
Downvoted.
[+] [-] whatl3y|5 years ago|reply
If you're a relatively small company looking to use a plug-and-play SaaS product with a modest subscription fee to serve some business purpose this is a great tool to get some quick and dirty numbers on whether it would be better to use or maybe build in house or go another route.
If you're purchasing some large, highly configurable enterprise tool (with high implementation and support costs) that all 1k of your employees will use daily and you'd like to understand cost/benefit, other means of calculating this should be used (and it would likely require days to weeks of multiple people's time to make such a calculation).
[+] [-] onion2k|5 years ago|reply
However a service costing 1.5 million at such a company has other costs.
$125/month is the price, not the cost. You need to plug in the full cost.
[+] [-] falcolas|5 years ago|reply
Every piece of software requires in-house support; even pagerduty and their ilk require management time to set up schedules, adding and removing people. It’s not a lot of time, about .1 to .2 of a person’s time for all of our pageable employees, but a manager’s or leader’s time is not cheap.
[+] [-] redwood|5 years ago|reply
It's not just the cost of an employee salary per hour... Is the opportunity cost of everything that employee could have instead done.
After all it isn't as though with more money you can just immediately get more fully ramped sophisticated employees to add value... All of that is complex.
[+] [-] bluGill|5 years ago|reply
[+] [-] Flimm|5 years ago|reply
Some feedback:
- s/(one person)/(per person)/g - The "cover costs" section doesn't really make sense to me. For example, in one example, the breakdown says that I will burn $10000 extra, but that I will also cover costs with 23 hours of use. How does it know how much use it will take to cover costs? How does it know how much profit is generated per hour of use? Am I misunderstanding something? - It would be nice if the formula used was displayed in small text or in a tooltip or something.
[+] [-] marcosdumay|5 years ago|reply
The "cover costs" assumes your people will use the tool 8 hours a day. By the productivity you gain, it calculates how much you save in salary.
The "free up an hour" also assumes your people will use the tools 8 hours a day.
The "cover costs with" calculates how much your people must use the tool for it to eventually pay for itself. If it's larger than 8 hours, then the tool will never pay up.
[+] [-] PascLeRasc|5 years ago|reply
[+] [-] osel|5 years ago|reply
For simplicity there are a whole host of underlying assumptions about what a work day is, what time spent means , etc.
Explaining at least some of those assumptions is on my list of improvements, but there will never be a 'correct' answer in a generic form like this. It's more intended as a quick investigation/conceptual check.
[+] [-] drapery|5 years ago|reply
So then the question become, I have to believe that this SaaS will save XXXmin per employee for me to consider buying it.
[+] [-] Abishek_Muthian|5 years ago|reply
P.S. I've added your calculator to my curated list of startup tools[1].
[1]https://startuptoolchain.com/#operations
[+] [-] KerryJones|5 years ago|reply
Had a whole article that went into this: https://medium.com/hackernoon/how-much-time-should-you-inves...
I like the idea and it's certainly more detailed than mine, but I think some explanation of how this should be used and context is important.
[+] [-] drapery|5 years ago|reply
I see this tool as a quick a simple way to eliminate all the tools that might look shiny and slick or save a few clicks, but doesn't actually save employee's time at all.
So the decision becomes, I like the way this new SaaS feels or looks than our current one, but is it really worth the additional cost?
[+] [-] osel|5 years ago|reply
[+] [-] _pdp_|5 years ago|reply
In 99% of the cases, I rather buy the service than develop it from scratch and support it long-term. Most consumer-facing services I've seen are relatively cheap. I only tend to develop existing things if I find there are some functionalities which either I cannot buy directly or they require a special setup that does not go well with security and other constraints.
[+] [-] lukasm|5 years ago|reply
I used to do this calculation with 2x assumption. Say, a new IDE plugin saves 100 engineering hours, so it's 50 000 in cost and another 50 000, because they spend time creating features.
Is it a good assumption?
[+] [-] saadalem|5 years ago|reply
[+] [-] ponker|5 years ago|reply
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] adibalcan|5 years ago|reply
[+] [-] osel|5 years ago|reply
[+] [-] osel|5 years ago|reply
I submitted this just before retiring for the evening NZ time thinking not much of it, it was awesome to find this discussion this morning!
[+] [-] AQXt|5 years ago|reply
Add "One-time payment" option to the cost of the service.
This could be used to decide if you allocate resources to implement a new feature in an internal system.
[+] [-] pseingatl|5 years ago|reply
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] dzonga|5 years ago|reply