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I'm part of a small engineering firm that's composed almost entirely out of people working on interdisciplinary projects remotely. We use various CAD software & programming IDEs.

Currently, our workflow is very primitive such that if one employee is tasked with something, he gives an estimate how long it takes him to complete the assignment, and gets paid an hourly rate. There's a lot of trust in the company, and things are usually within the estimate — so we don't have that much of a deal with this system, but we would still like to eliminate negotiations.

More importantly, when new clients ask us for a project, it is very difficult to give them a time frame because we don't have a way to compare them to similar projects.

I've heard about software like Toggl or Harvest which can track time worked on a task/project, but the thing is that it doesn't really track the time worked with each program, & doesn't give a clear picture of what the employee is doing.
On the other end of the fence, there are programs that capture the screen of the employee in regular intervals, which I think is extremely pervasive and we don't want to touch that.

I'm looking for a compromise: something that would allow the tracking of time spent in a focused window with any activity within a 10 minute span. We constantly use online resources, so usage of browsers isn't looked down upon.

To give an example, I am looking for a software which would output something like this:

cadsoftware.exe - 3.2 hours
chrome.exe - 1.7 hours
wmv_64.exe - 0.1 hours 

I thought of programming something myself since this is pretty simple, but wanted to check if there is already something of this type available.

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Firstly, I would suggest you look at a tool like ManicTime, that can help with tracking time spent in programs.

Secondly, there is also a previous answer that covers other available tools.

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