💰 Potential Economic Benefit (PEB) Calculator BETA

🧭 Overview

The Potential Economic Benefit (PEB) Calculator helps teams and leaders translate software delivery improvements into tangible financial value.
It connects engineering outcomes with business impact by showing how better Speed, Efficiency, Quality, and Productivity drive measurable cost savings.

💡 In simple terms - PEB tells you how much value your improvements are adding.

⚙️ What It Does

KnowHOW continuously tracks delivery KPIs and calculates performance trends.
The PEB Calculator converts these gains into cost savings, giving you a single financial summary of improvement.

When you input:

👥 Team Size
💵 Average Cost or Billing Rate per Developer
⏱️ Duration (Month / Quarter / Year)

KnowHOW:

Aggregates KPI trends
Calculates category-wise gains
Converts them into monetary benefits
Displays results instantly on the Potential Economic Benefits board

🧩 Productivity Gain Calculation Logic

1. Purpose

The Productivity Gain metric measures how a project’s performance evolves by analyzing key KPIs across Speed, Efficiency, Quality, and Productivity categories.
It provides a single composite score indicating whether the team is improving or declining in delivery effectiveness.

2. Core Concepts

Term	Meaning

Term	Meaning
Data Point	A KPI’s measured value for a time unit (e.g., sprint or week).
Number of Data Points	The count of values used to calculate gain (default = last 6 sprints or weeks).
Positive Gain Trend	Defines whether a higher or lower value indicates improvement for that KPI.
Weight	The relative importance of each KPI or category in the overall score.

3. KPIs Considered

Each category contributes to the overall productivity score:

Category	Description	Sample KPIs	Gains

Category	Description	Sample KPIs	Gains
⚡Speed	How fast teams deliver working software	Sprint Velocity, Mean Time to Merge, Code Build Time	↑ Velocity (Ascending), ↓ Times (Descending)
Efficiency	How well teams use their capacity	Capacity Utilization, Wastage, Work Status (Delay)	↑ Utilization, ↓ Wastage/Delay
Quality	Delivery stability and defect reduction	Defect Density, Defect Seepage, Defect Severity	↓ Defects
👩‍💻Productivity	Overall delivery effectiveness	Commitment Reliability, PR Success Rate, Revert Rate	↑ Reliability & PR Success, ↓ Reverts

Each category contributes to overall productivity gain through a weighted scoring model.

4. Calculation Approach

Step 1: Data Preparation

Collect the last 6 data points for each KPI.
Ignore KPIs with missing or all-zero values.
Assign weights:
- Sprint-based KPIs → weight = 2
- Week-based KPIs → weight = 1

Step 2: Determine Gain per KPI

Baseline value = first non-zero data point.
For each subsequent data point, compute variation (%) from the baseline:
- Ascending (higher = better) →
  (current - baseline) / baseline * 100
- Descending (lower = better) →
  (baseline - current) / baseline * 100
Multiply each gain by its data point weight.
Sum all weighted gains → KPI Gain Total.

Step 3: Calculate Category Gain

Average all KPI gains within the category:

Category Gain = Sum(KPI Gains) / Total Weight Parts

Step 4: Calculate Overall Productivity Gain

Each category has a predefined weight:

Category	Weight

Category	Weight
Speed	0.30
Quality	0.30
Efficiency	0.25
Productivity	0.15

Final score:

Overall Productivity Gain = 
(Speed Gain * 0.30) + 
(Quality Gain * 0.30) + 
(Efficiency Gain * 0.25) + 
(Productivity Gain * 0.15)

5. Example

If:

Speed Gain = 4.4%
Quality Gain = 2.5%
Efficiency Gain = 3.0%
Productivity Gain = 1.8%

Then:
Overall Productivity Gain = (4.4×0.3) + (2.5×0.3) + (3.0×0.25) + (1.8×0.15) = 3.1%

6. Economic Benefit Calculation

(Average annual CTC × Total no. of devs × productivity gain) for each category

7. Key Takeaways

The algorithm adapts to both sprint- and week-based KPIs.
Only KPIs with valid, varying data are considered.
Positive trends differ per KPI (some improve when they increase, others when they decrease).
Category and KPI weights ensure balanced impact across performance dimensions.

🧮 Using the Calculator

1️⃣ Enter team size
2️⃣ Enter average developer cost or billing rate
3️⃣ Choose duration (Monthly / Quarterly / Yearly)
4️⃣ Click Calculate PEB
5️⃣ Review real-time savings across Speed, Efficiency, Quality, and Productivity

Your results remain visible until you change inputs or recalculate.

📈 Summary View

You’ll see:

Category-wise Gains with % improvement
Cost Savings ($) for each category
Total Potential Economic Benefit
Inline tooltips explaining metrics
Auto-refresh on parameter change

📊 A simple, financial snapshot of your engineering performance.

🚀 Coming Soon – AI Adoption Insights

The next evolution of the PEB Calculator integrates AI-assisted Agile metrics, helping you quantify how AI tools and practices amplify business value.

You’ll soon measure:

⏩ Productivity gains from AI-assisted backlog, coding, and testing

🤖 Efficiency improvements via automation and intelligent recommendations

💸 Verified ROI from AI-driven delivery acceleration

Potential Economic Benefits