Resource Utilization and Productivity

February 14, 2017

Niki Saukolin

Important to avoid confusing resource utilization and productivity

I just spent a weekend talking about agile development with our software development and implementation teams. A very good weekend indeed and source of tremendouns learning. This lead me to thinking about resource utilization, which is what Promineo software is all about, and productivity, which is really what work is all about.

I realized that it is all too easy to have the concept of resource utilization somewhat intertwined with that of productivity, when the separation between the two is actually very important and should be kept clear.

To avoid confusion, it may be useful to think of resource utilization as a measure of the time a person is allocated to working on something, and productivity as the amount of completed work that gets done within that allocated time. When thinking this way it is easy to see that high resource utilization does not equal high productivity.

The challenges that need to be overcome to achieve high resource utilization and high productivity are also completely different.

Resource utilization is really about ensuring that your organization has the right amount of the right kinds of people, and that these people are always in the right places at the right times. Productivity is about organizing the work itself, to ensure that people are working in the most effective possible way on the right things to complete as much work as possible.

While the difference seems obvious, I’ve had too many discussions on the topic to admit that it is. In this vain, I thought that this "resource utilization trap" video by Crips Agile Academy illustrates the difference between resource utilization and productivity pretty well, and the next time I’ll have a conversation on the topic I’ll pull it out.

About the author

Niki Saukolin

Niki is the head of business development at Promineo and a software industry veteran with over 20 years of experience working with enterprise customers.

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