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Software tools can improve the quality and maintainability of software, but are expensive to acquire, deploy, and maintain, especially in large organizations. We explore how to quantify the effects of a software tool once it has been deployed in a development environment. We present an effort-analysis method that derives tool usage statistics and developer actions from a project's change history (version control system) and uses a novel effort estimation algorithm to quantify the effort savings attributable to tool usage. We apply this method to assess the impact of a software tool called VE, a version-sensitive editor used in Bell Labs. VE aids software developers in coping with the rampant use of certain preprocessor directives (similar to #if/#endif in C source files). Our analysis found that developers were approximately 40 percent more productive when using VE than when using standard text editors.