Management Decision Problem

Measuring Productivity from a Knowledge Intranet

1 .       You head a growing e-business consulting company with over 150 employees in an expanding but fiercely competitive field. You need to recruit many junior consultants every year to replace employees who have left the firm and to fill new positions. In the past, your firm trained new employees by first sending them to a one-month training program. After completing the program, they could work full-time on projects. This process has proved very expensive and a drain on company resources. Junior consultants cannot work on any projects to generate client billings for the firm until they have finished the training program. In January 2003 your firm installed an intranet that provides the following:
  • An online training class in company practices and methods.
  • Repository of "best practices", model proposals with search capabilities
  • Directory of employees, the projects they have worked on and their special expertise.

You have started to compile a table showing training time and costs before and after installing the intranet. Training time goes down as the company gains experience using the intranet.

 

2002

2003

2004

Time to train a new consultant

20 days

14 days

12 days

Daily training cost per consultant

$2000

$1400

$1000

Additional billings per consultant

0

   

  1. If your intranet trains new consultants more quickly and each trained consultant can start billing clients $1700 per day for work on projects, how much should this new intranet increase revenue from client billings generated by newly-trained consultants in 2003 and 2004? Your firm hires and trains an average of 40 new consultants each year.
  2. Using only these metrics, how much knowledge worker productivity has your intranet created since the intranet was installed?
  3. What other capabilities would you add to the intranet to make your consultants even more productive? How could you measure productivity increases from these capabilities?