日本語
In recent years, due to labor shortages and the promotion of work style reforms, Japanese companies are required to operate efficiently.
Especially in the field of system development, it is essential to quickly adapt to technological advancements and market changes while providing high-quality services.
In modern business, the importance of improving productivity in system development has become more significant than ever.
“I want to improve productivity, but I don’t know specific measures.”
“I don’t even fully understand what productivity means.”
For those facing such concerns, this article will cover the theme of productivity in system development. We will thoroughly explain metrics for measuring productivity, the benefits of improving productivity, and specific measures, so please use this as a reference.
Akira Shimazoe
CEO of Solashi Japan LLC. Engaged in the development and operation of internal systems at Suntory. Founded Yper Inc., serving as CTO and CPO, contributing to product launch and growth.
What is Productivity in System Development?
Productivity in system development refers to how much output a development team can achieve within a given timeframe.
For example, if software or a system is developed in a shorter time than scheduled, it can be evaluated as high productivity. If development is carried out efficiently with fewer resources, productivity increases even further.
Not only time but also the quality of the deliverables is important. In system development, quality includes code readability, maintainability, and system stability.
If the quality of deliverables is low, frequent defects and prolonged debugging times may occur. As a result, project progress may be delayed due to various issues.
In other words, improving productivity in system development means developing high-quality deliverables with minimal resources.
Metrics and Formulas for Measuring Productivity in System Development
Two major metrics for measuring productivity in system development are Physical Labor Productivity and Value-Added Productivity. Below, we explain these metrics along with their formulas.
Physical Labor Productivity
Physical labor productivity is an indicator that measures the production efficiency per worker.
The formula is as follows:
| Physical labor productivity = Production volume ÷ Labor input Production volume... Number of design documents created, number of modules manufactured, number of test cases executed Labor input... Number of development team members, working hours, etc. |
One thing to keep in mind is that determining the scale of production volume in system development is difficult.
In a factory setting where identical products are mass-produced, physical labor productivity is very effective. If the production rate increases from 1,000 products per hour to 2,000, it is considered an improvement in productivity.
However, in system development, the key production measures such as "design documents," "modules," and "tests" vary depending on the project.
For example, even if the content to be checked, test conditions, and execution procedures in software testing are the same, a more complex system with higher difficulty will require more labor hours.
Therefore, using only the physical labor productivity indicator to measure the productivity of system development is not straightforward.
Value-added productivity
Value-added productivity is an indicator that measures how much new value is generated per unit of labor input.
The formula is as follows:
| Value-added labor productivity = Value-added amount ÷ Labor input Value-added amount ... The amount obtained by subtracting expenses and externally purchased costs from the product sales amount Labor input ... The amount of labor used for production. The unit is hours or number of people |
One important consideration is that value-added productivity is affected by sales revenue. If sales fluctuate, accurate calculation becomes difficult.
For example, in the case of an in-house web service where sales revenue fluctuates, it may be difficult to calculate value-added productivity.
"Physical labor productivity" and "Value-added productivity" are just one way to measure productivity. A method to make productivity easier to measure is through hierarchical evaluation.
Three Levels of System Development Productivity
System development productivity can be divided into three levels.
| Level | Type of Productivity | Description |
| Level 1 | Workload Productivity | How much work can be done within a set time |
| Level 2 | Expected Value-added Productivity | How much an individual initiative contributes to system value |
| Level 3 | Realized Value-added Productivity | How much actual value (such as revenue) has been generated |
Level 1 can be calculated from recorded working hours, making data collection relatively easy.
Be aware that evaluating the actual value in the second and third layers takes time.
To visualize and improve productivity, it is crucial to consider these layers and examine the issue from multiple perspectives.
Background of the Need for Productivity Improvement in System Development
Why is productivity improvement in system development considered necessary? Here are three key reasons:
- Labor shortages make it difficult to secure personnel
- Correction of long working hours is required
- Market competition is intensifying
Improving productivity has become an urgent task to solve these problems. Let's explain each one.
Labor Shortages Make It Difficult to Secure Personnel
Due to labor shortages, securing IT personnel has become increasingly difficult.
According to the "DX White Paper 2023" published by IPA (Information-technology Promotion Agency, Japan), a survey conducted in 2021 revealed that more than 70% of companies reported that IT personnel were either "somewhat insufficient" or "significantly insufficient."
This indicates that many companies are struggling with labor shortages and finding it challenging to secure IT personnel. As a result, companies are focusing on improving productivity to achieve greater results with fewer human resources.
(Reference: DX White Paper 2023 | IPA Information-technology Promotion Agency)
Correction of Long Working Hours Is Required
As part of work style reforms, the correction of long working hours is being demanded. The revised Labor Standards Act, enforced in April 2019, set an upper limit on overtime at 45 hours per month and 360 hours per year.
Long working hours exhaust employees both mentally and physically, leading to decreased performance. Moreover, if long working hours become a norm, it may lead to mental health issues, resulting in leave or resignation.
However, simply reducing working hours is not a fundamental solution. It may lead to declining business performance or prolonged project timelines.
Thus, improving productivity in system development is essential. By increasing productivity, higher results can be achieved within limited working hours, effectively shortening the time required for system development.
In this way, initiatives to improve productivity are necessary to maintain employee health and performance.
(Reference: Overtime Work Limit Regulations | Ministry of Health, Labour and Welfare)
Market Competition Is Intensifying
The intensification of market competition is another major reason why productivity improvement has become a crucial issue.
In recent years, globalization has led to an influx of foreign capital into the Japanese market. Countries with lower labor costs can manufacture and sell products and services at lower prices, giving them a competitive cost advantage.
Additionally, rapid changes in consumer needs also contribute to the intensification of competition. Companies must quickly identify consumer trends, develop new technologies and services flexibly, and introduce them to the market.
For these reasons, companies involved in system development must improve productivity to maintain a competitive edge in the market.
Four Benefits of Improving Productivity in System Development
Here are four key benefits that can be gained by improving productivity in system development:
- Reduction in human resource requirements
- Competitive advantage in the market
- Improvement in product and service quality
- Encouragement of innovation
Reduction in Human Resource Requirements
By improving productivity, tasks can be performed with fewer personnel, leading to more efficient use of human resources.
One of the measures to improve productivity is operational efficiency. Operational efficiency refers to reviewing business processes to reduce and optimize the resources required for operations. By improving operational efficiency, it becomes possible to perform tasks with fewer people and shorten the development period.
To maximize output with a limited number of engineers, operational efficiency is highly effective. For specific measures, please refer to "How to Improve System Development Efficiency? Causes of Decline and Measures for Improvement."
With the increasing difficulty in securing human resources, the ability to save personnel resources is a significant advantage.
Gaining a Competitive Edge in the Market
Improving productivity is essential for securing a competitive advantage in the market. There are two main reasons for this.
First, increasing productivity reduces costs, allowing for a competitive edge in price competition. Enhanced productivity lowers development costs, enabling companies to offer products at a more competitive price.
Second, accelerating development speed allows companies to respond swiftly to market changes. Quickly addressing new market needs gives companies a step ahead of competitors.
With the entry of foreign capital and diversification of consumer needs, market competition is intensifying. In this environment, improving productivity in system development offers a significant advantage.
Enhancing Product and Service Quality
Enhancing productivity in system development enables the delivery of higher-quality products and services.
Increased productivity accelerates development processes, allowing for a rapid PDCA (Plan-Do-Check-Act) cycle. This enables frequent iterations of improvements within a short period. As a result, companies can quickly respond to customer feedback and market demands.
Furthermore, the know-how for quality improvement will accumulate within the company, making it possible to implement more effective measures efficiently.
High-quality products and services will lead to improved customer loyalty and market dominance.
Innovation is Promoted
Improving productivity in system development promotes innovation within the company.
Many may be struggling with responding to the changing market, creating new businesses, or transforming internal operations with digital technologies. Achieving these requires innovation that transforms the organization with creative ideas and new methods.
However, it is not easy to secure time for new initiatives while being overwhelmed with daily tasks. Furthermore, excessive work burdens can lead to employee fatigue and a decline in motivation.
To pave the way for innovation, it is essential to secure time for employees.
By improving productivity in system development, results can be achieved with fewer human resources. This allows employees to spend time on creative activities.
For example, it becomes possible to engage in activities that promote innovation, such as improving business processes, materializing new ideas, or launching new businesses.
Four Major Factors Hindering Productivity Improvement in System Development
Let's explain the four factors that reduce productivity in system development.
- Inefficient business processes and work steps
- Insufficient engineer skills
- Rising labor costs
- Improper personnel allocation
If these factors are left unaddressed, even if measures for improving productivity are implemented, the expected results may not be achieved. Let's explain each of these factors.
Inefficient Business Processes and Work Steps
Inefficient business processes cause project delays and a decrease in quality.
For example, creating overly detailed documentation or adding unnecessary features to project requirements increases tasks unrelated to the quality of the deliverables.
Additionally, insufficient requirement definitions or inappropriate project management may lead to task rework.
If inefficient tasks are left unaddressed, they will continuously waste time and resources. This also leads to reduced efficiency in system development, so immediate improvements and optimization of business processes are necessary.
Lack of Engineer Skills
Lack of engineer skills is a factor that reduces productivity in system development.
When assigning junior engineers or engineers with limited experience in a specific development field to tasks, delays and quality issues are likely to occur. Time and resources are spent on redoing tasks and solving problems after releases.
To address this issue, continuous education and skill development for employees are crucial. However, it takes time for engineers to raise their skills, and immediate results may not be expected.
Therefore, while developing talent within the company, it is also effective for maintaining and improving productivity to secure talented personnel from external sources.
Rising Labor Costs
Rising labor costs lead to reduced productivity.
This happens because rising labor costs reduce the value-added amount. The value-added amount is calculated by subtracting labor costs, material costs, and other expenses from sales and is used in calculating labor productivity.
Value-added labor productivity = value-added amount ÷ labor volume
This productivity is obtained by dividing the value-added amount by labor volume. If labor costs rise, it causes a decrease in value-added amount and labor productivity.
In the current situation of labor shortages, the cost of hiring skilled personnel is high, and the labor costs of employing them become a significant burden.
Therefore, it is essential to use methods such as outsourcing, where costs are incurred only when needed, to effectively control labor costs.
Improper Personnel Allocation
Improper personnel allocation also leads to a decrease in system development productivity.
Examples of improper personnel allocation include:
- Assigning highly skilled engineers to simple tasks
- Having no suitable tasks for employees' skills, leading to idling
In companies with a shortage of human resources, it's easy to fall into a state where talent is not utilized effectively, as mentioned above.
To address this issue, it is important to leverage various methods, including outsourcing, to ensure proper allocation of talent to the right roles.
For example, outsourcing simple tasks allows you to assign more complex work to talented engineers who are available.
Five Measures to Improve System Development Productivity
Here, we introduce five measures to improve system development productivity.
- Review and streamline business tasks
- Introduction of business tools
- Securing talented personnel
- Employee training
- Utilizing outsourcing
Review and Streamline Business Tasks
Reviewing and streamlining business tasks is an essential measure. Efficiency improvements are ongoing and provide lasting benefits once implemented, making it a priority measure to execute.
Start by reviewing the business processes to identify unnecessary tasks and inefficient steps for improvement.
The process of improving business efficiency should involve the entire company, not just a select few employees. Gaining cooperation from staff will help move the initiative forward efficiently and collect diverse opinions and ideas.
Additionally, utilizing consulting or outsourcing services that specialize in business process improvements can provide valuable external insights.
Introduction of Business Tools
Introducing business tools dramatically improves system development productivity. By implementing tools tailored to the company's needs, you can expect shortened development cycles and improved work quality.
For example, automation tools are a prime example. Automating repetitive tasks, such as routine work, significantly shortens task completion time. Test automation tools are widely used in system development environments.
Project management tools are also highly effective. They visualize the progress of projects and ensure optimal resource allocation. Additionally, team members can track project progress in real-time, facilitating consistent understanding and the early identification of issues.
Utilizing such business tools leads to improvements in both efficiency and quality of work.
Securing Talented Personnel
Securing talented personnel greatly enhances productivity in system development.
Engineers with both technical skills and problem-solving abilities realize project efficiency and quality improvements.
Additionally, incorporating new insights can foster innovation, such as idea generation and solving organizational challenges.
However, the current hiring market, especially in technical fields, is facing a significant shortage of skilled professionals, making it increasingly difficult to find talented personnel. Therefore, it is effective to actively hire not only full-time employees but also freelancers and contract engineers.
Employee Training
Improving employees' skills can significantly enhance system development productivity.
Offer growth opportunities such as internal training, participation in external seminars, and online educational programs to help raise the technical level of engineers.
As a result, inefficiencies and unnecessary steps can be reviewed, leading to better output.
Furthermore, actively supporting employee growth has the added benefit of improving employee loyalty. This increases attachment to the company, boosts motivation, and can lead to improved performance and reduced turnover rates.
However, employee training requires both time and cost. Consider it a long-term investment, while simultaneously implementing company-wide efficiency improvement measures.
Utilizing Outsourcing
Outsourcing involves delegating development tasks that are currently done in-house to specialized development companies.
By utilizing outsourcing, you can entrust development tasks to experienced engineers and request services such as business process improvements and IT infrastructure development, which allow you to incorporate knowledge that was previously unavailable in-house.
As a result, you can focus your internal resources on core business activities, thereby improving productivity.
When selecting outsourcing, it's crucial to choose services that align with your company's needs. Consider factors such as the scope of services, service quality, and pricing.
Offshore development is also an excellent option within outsourcing. Offshore development refers to delegating system, software, and application development, as well as maintenance and operations, to overseas development companies that offer lower costs than domestic ones.
In recent years, Vietnam has gained significant popularity among Japanese companies. You can keep personnel costs low while securing talented engineers. With expertise in cutting-edge technologies, high-quality development is achievable.
Vietnamese offshore development company Solashi Co., Ltd offers high technical development capabilities and Japanese language skills to deliver system development tailored to customer requirements at a low cost. Please feel free to contact us.
Improve System Development Productivity with Solashi
This article explains the benefits and specific measures for improving system development productivity.
Due to labor shortages and increasing market competition, companies must achieve high performance even with limited resources. Therefore, improving system development productivity is an urgent task.
There are various measures to enhance productivity, but implementing effective strategies requires specialized knowledge and skilled IT professionals.
If you are considering improving system development productivity, trust Solashi Co., Ltd. Our highly skilled IT professionals will help solve your challenges.
We are an offshore development company based in Vietnam, a leading destination for offshore services. Compared to outsourcing in Japan, we offer cost-effective development solutions. Our team includes highly skilled Vietnamese engineers and Japanese project managers who can handle a wide range of tasks, including requirement definition, development, design, and maintenance.
If you are looking to improve your current system development environment or secure development resources, please feel free to contact Solashi Co., Ltd.
Akira Shimazoe
Representative of Solashi Japan LLC. Born in April 1989 in Fukuoka Prefecture. Graduated from the Graduate School of Information and Mathematical Sciences at Osaka Prefecture University. Joined Suntory System Technology Co., Ltd., an IT subsidiary of Suntory Holdings, in 2014. Broadly responsible for the development, operation, and implementation of vending machine delivery management, efficiency improvements, and sales management systems. Founded Yper Inc. in 2017, serving as CTO and CPO. Contributed to the launch and growth of the app-linked delivery bag "OKIPPA." Selected for Toyo Keizai's prestigious "Amazing Venture 100" and Forbes' "Forbes 30 Under 30 Asia 2019."
