6 indicators of web production efficiency

By offering website development at low cost and providing high quality, you can be sure that you will not face a shortage of orders. But keep in mind that from a business point of view, such a model is very unstable. If you chase after quantity, you can quickly lose your customers, and by lingering, you can go completely into a minus without getting a chance for development.

I have always been interested in creating a balanced scorecard, focusing on which, one could effectively manage web production, striving for a golden mean. In this small article I will tell you about the system for evaluating the effectiveness of WebCanape production .

If you want to try on this system at home, keep in mind that these figures are most likely suitable for industries that produce a homogeneous product and have a clear pricing policy. In our case, we are developing several products: an information site, a site with a catalog of goods and an online store. Prices vary depending on the functionality, but the order of pricing is generally the same.
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WebCanape Performance Indicators

The primary task is to simply get an assessment of the result of the work of production, looking at which, one can say, good or bad, we finished the month. For this we use 6 indicators.

General plan for income (CAP). This indicator indicates the ability of production to generate the necessary cash flow.

It's simple. We set two planned indicators: the minimum and the desired. The minimum required to cover the costs desired - to make a profit. Both plans increase each month, taking into account the company's annual growth plan.

If the indicator is not met, take urgent measures to improve work efficiency or reduce costs. If the rate is good, think about additional services for your customers without expanding production staff.

The use of working time fund (FRV). This indicator indicates the level of discipline in the workplace and the efficiency of the organization of labor, which is the foundation for a successful business.

FRV consists of the total number of hours allocated to developers involved in production. To calculate the indicator, let's divide the actual time spent by developers on the total FRV. The indicator is best displayed in percent. The higher the number, the better. The number of working hours per person per month can be found in any production calendar .

For us, the norm is 80%. This means that 80% of the available working time fund is spent on project work. The remaining 20% ​​we leave for training, tea, discussion of solutions for various tasks, meetings.

The use of FRV for commercial projects (FRV $). With this indicator, we estimate the targeted use of the company's production resources.

Defining it, we find out what percentage of the FRV went to commercial projects. For the division of hours (commercial / non-commercial), we use trackers in Redmine, for which it is easy to make cuts of statistics in the future.

To calculate the indicator, we divide the total time for commercial projects by the time worked for all projects and multiply by 100%. In our case, the FRV $ must be at least 80%. The rest of the time we can spend on domestic projects and development.

Compliance with regulations. Through this indicator, it is possible to assess the ability of production to comply with the standards incorporated into the value of the product.

Each contract with a client is a certain number of hours to develop a project. At the end of the month for each completed project, we calculate the amount of elapsed time and compare it with the planned (contractual), estimating how far we have met the standards or exceeded them.

To calculate the indicator, we divide the average planned time by the average actual time and multiply by 100%. It is quite normal if this indicator is less than 100%. The main thing is to ensure that it does not become less than 70%, and to strive for a value of 100% or more.

Return on production assets (RPA) . In fact, this is the total cost of the hour at which we worked a month.

This indicator should be no less than the planned cost of a standard hour in the studio. If it is smaller, it is necessary to take measures to improve work efficiency or more accurately (for the greater part) to estimate the cost of projects at the initial stage.

The indicator is calculated easily. The average time for a project (in hours) is divided by the average cost of the project. The data on the spent hours is taken from Redmine (or any other task-manager), and the cost of developing the project is from the contract.

Fulfillment of terms . The final and very important indicator for us to assess is the fulfillment of commitments by deadlines.
To calculate it, we take into account the actual working days spent on the project, and compare them with the planned contractual deadlines. We divide the planned average project term by the average actual term and get the deadline rate. The rule is the same: the indicator should be at least 70% and should grow with each month.

If interested, I suggest to get acquainted with the table , which can be used for calculation.

I note that it makes sense to consider these figures not only in the context of the entire production, but also in relation to the projects for each manager. Analysis of the indicators separately for each project manager gives good ground for reflection. This is the most valuable in these calculations.

We analyze the results for a month to timely diagnose problems - we sort out at meetings, analyze bottlenecks, use them to select the best developers and managers.

Our figures in numbers

April 2013:
The implementation of the plan for income: 116%
Use of working time fund: 73%
Use of FDR for commercial projects: 83%
Return on assets: 101%
Compliance with standards: 112%
Fulfillment of terms: 60%

Standards to the current figures pulled about 8 months. We reached the required numbers thanks to automation, expanding the functionality of our software platform and developing developers.

With an increase in the rate of compliance with standards and a slight increase in prices for basic versions of sites, the profitability index, as a rule, can be kept at the right level.

We paid serious attention to meeting deadlines a few months ago. After that, a decision was made to control the time when projects were in “In Work” status, plus an idea was born with a TV . The timeframe has so far been able to draw up to 60%. Judging by the current data, the results of May will be better.

Congratulations to all with the beginning of the summer. Good week to all and high performance!

Vasily Churanov and the Web-canape team