Why time tracking is paramount
As an owner-manager of a B2B software business, understanding efficient time management of your team is pivotal for sustained success and growth. Time tracking provides invaluable insights into resource allocation, productivity assessment, and strategic planning. In this article, we'll delve into the why, how, and what of time tracking, exploring methodologies, common pitfalls, and some effective strategies.
Time tracking is more than mere clocking in and out; it's a strategic tool for informed decision-making. It offers clarity on where your team invests its efforts, revealing hidden inefficiencies and areas ripe for improvement. By breaking down time allocation into layers, such as internal vs. customer-facing activities, we gain a comprehensive view of resource expenditure:
Layers of time allocation
There are fundamentally three broad activity categories your teams could engage in - 1) Internal, 2) Customer-facing and 3) IP development. In order to effectively track time and make improvements, you need to know the specific activity type that your team has been spending their precious time on. These layers of activity are:
Internal allocation:
- Layer 1A: Holidays – Ensuring proper work-life balance and rejuvenation.
- Layer 1B: Admin time, meetings, training – Vital for internal operations but often underestimated.
Customer-facing activities:
- Layer 2A: Presales – Time invested in supporting sales activities.
- Layer 2B: Support and maintenance – Distinguishing between support team (Level 1/2) and development team (Level 3) efforts.
- Layer 2C: Customer projects – Time dedicated to client-specific endeavors that don't add to intellectual property (IP).
IP development (R&D Team):
- Layer 3A: Technical efficiency – Enhancements that improve product architecture or deployment processes.
- Layer 3B: Roadmap committed – Features committed for product enhancement to one or more customers. Committed doesn’t necessarily mean that we have a PO from the customer; this is what we have contractually “committed” to them. This excludes commitments where you haven’t specified a timeline to the customer (this goes into Roadmap uncommitted).
- Layer 3C: Roadmap uncommitted – Potential features for future product improvements.
Using a structured approach to track time helps to create transparency and identify time-consuming activities.
It also helps us understand cases where customers ask for free services or product features. We spent time developing these, only to find they had limited market potential, leading to an inefficient use of resources.
Therefore, it's vital to evaluate the potential return on investment for each feature or service before starting development. This strategy will help you avoid spending time on projects that offer little in the way of benefits.
Efficiency enhancements
- Optimising time efficiency involves more than just tracking. Implementing strategies like sprint sessions, maintaining a regular cadence, and aligning efforts with business goals are crucial:
- Scalability and planning: Layer 3A efforts demand meticulous planning. However, it's essential to discern if the planning effort justifies the envisioned outcomes.
- CEO's role: Recognising that while tracking time for all is pivotal, the nature of the CEO's role might hinder meticulous tracking due to constant firefighting.
Key takeaways and recommendations
- Tracking responsibility: Except for the CEO, everyone should track time to capture insights, enhance efficiency, and align efforts with strategic goals.
- Specific use cases: Highlighting examples from different departments (like development, support, and pre-sales) exemplifies how tailored time tracking illuminates inefficiencies and aids in decision-making.
- KPI refinement: Refining KPIs from lapsed time to actual time spent on crucial tasks (like support tickets) ensures a more accurate reflection of resource utilisation.
Summary
In conclusion, effective time tracking, allocation, and management are pillars of success in the software business. Leveraging structured methodologies, learning from experiences, and focusing on efficiency enhancements pave the way for sustained growth and profitability.
By integrating these insights into your managerial approach, you can harness the power of time as a strategic asset, steering your software business towards greater heights of success and efficiency.
Footnotes