This is a guest post from our partners at PLAYBOOK. This series is based on posts by Eric Graves on the Cost of Delay. PLAYBOOK is a project execution software program that enables lean and agile methodologies.
Have you ever faced the following questions on a project?
• What is the impact of moving resources from one project to another?
• Is mitigating a particular project risk worth the time and effort?
• Is it worth the delay to add a new feature to a product?
• What would be the absolute best thing to spend the company’s time and money on today?
Questions like these are pervasive when developing products. Often the answers differ a lot depending on whom you ask. After hours or weeks of meetings, typically a decision is made based on intuition or other factors not related to project economics. Intuition-based decisions are commonly subject to change as new information arrives or opinions change, and achieving buy-in across the organization is difficult.
What if there were simple, quantitative, and objective answers to these types of questions? What if you could more easily see the impact of changes on the Return on Investment of a project? Less time would be spent disagreeing, changing minds, and reworking designs. Projects would be faster, more profitable, and the work environment more pleasant.
Cost of Delay (COD) is a metric to make decisions based on economic project loss or gain. The COD is what Don Reinertsen refers to as ‘The Golden Key.’ With a common model based on economics, we can gain project team consensus and make the ‘right’ decision quickly when faced with questions like the ones above.
Understanding the cost of delay, how to calculate it, and how to compare the cost to the benefits gained from a delay can create a strategic advantage. However, COD is a key metric most product development companies do not fully understand or know how to calculate.
In this series of six articles, we will explore why you should care about the cost of delay. The next posting (2 of 6) will explore ‘What is the Cost of Delay?’
Strategy 2 Market is excited to join forces with PLAYBOOK, a project execution software program that enables lean and agile methodologies. Again and again, we have seen our clients struggle when it comes to choosing the right projects, optimizing resources and improving time to market. More often than not, this is because they lack visibility into key pieces of information that can translate into a better bottom line.
“If you’re looking to shed months off your new project schedule, improve team culture and collaboration and track project execution in real-time… it might be time to hang up those tools that no one seems to pay attention to, and ax that weekly status meeting that seems bloated with old information.” Contact Mary Drotar at [email protected] or 312.212.3144 for more information on getting LEAN.
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Strategy 2 Market helps companies increase growth and decrease product development complexity. www.strategy2market.com
For more information or to speak with one of our consultants, please contact Mary Drotar at 312-212-3144 or [email protected]