Cost-Benefit Analysis of Developer Productivity

I’m going show how investing in high performance computers for developers, to save as little as 10 minutes a day, will provide a return on investment in under a year in addition to the many soft and indirect benefits.

The concept of a developer getting “in the zone” is well documented. It seems that most programmers with a blog have at least one post discussing how they best get “in the zone.” This is the idea that the highest quality code is written when a developer can fully immerse themselves in the code or problem at hand and completely lose awareness of their surroundings. Joel Spolsky has noted this occurs most frequently when a developer has quiet surroundings, possibly aided by headphones, see number 8 and 9 in his list of ways to improve your development process. Keeping a dev “in the zone” is key to keeping them as productive as they possibly can be.

One of the easiest ways to get a developer out of the zone is to keep them from waiting for their computer to catch up. Most processes that a developer waits on such as opening new applications, compiling, and running unit tests can be shortened by better hardware. Though expensive, the hardware is much less expensive than the developer themselves. As such it easy to show how the smallest time savers can improve productivity and save money.

Take a developer making $50,000, an amount not uncommon for entry level developers. Assuming 2 weeks of vacation, they’re working 2,000 hours per year (250 days) works out to $25/hour. Let’s also assume a cost of $2,000 for a new computer that will have a useful life of 2 years. If this developer waits 9.6 minutes per day on their computer, the cost to his/her company is $4/day ($25*(9.6/60)). Take $4 per day for 250 days per year works out to $1,000/year. Over a 2 year period the organization will break even, financially. The chart below shows the break-even point for developers at different salary levels and the amount of time saved per day that would justify a $2,000 computer.

Salary Minutes
$50,000 9.6
$60,000 8.0
$70,000 6.86
$80,000 6.0
$90,000 5.33
$100,000 4.8
$110,000 4.36
$120,000 4.0

The above chart shows only the break-even point. Consider a developer making $60,000 working on a slow machine that he/she waits on for 20 minutes each day. That 20 minutes in which the developer waits costs their organization $2,500 per year! Spending $2,000 results in a return on investment in less than 10 months. Over the 2 year life of the computer that results in an internal rate of return (IRR) of 91%. Let’s assume for a minute that a company expects a 15% return for any investment to be accepted. Over the 2 year span an investment of $2,000 to save 1 developer 20 minutes each day results in a net present value (NPV>) of $2,064.

Providing high performance machines for developers not only increases productivity but can also provide incentive for new hires as well as perks for existing ones. Developers enjoy working on the latest and greatest and providing that equipment can result in better employees.

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