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Cost of Delay: Why You Should Care

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Cost of Delay: Why You Should Care

TLDR: No finished product, no money in the bank.

· Agile Zone ·
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The real problem is this: Why should you care about how much a delayed release costs you? Maybe you have a “sweet spot” in the way you start your projects or release them. “It just takes that long here.” (That’s the sign of a system impediment.)

Now, let’s try to calculate that cost of delay.

The longer it takes for you to release, the more sales you lose from the maximum potential sales. You wait a month to release? You lose a month of max sales. You wait a year to release? You lose a year of max sales.

That’s right. Do those numbers start to look big and scary now?

You not only have aggravation and impediments in your current project from the delays from multitasking, technical debt, indecision, slowdowns from other teams, but you also lose the potential revenue from maximum potential sales, every week you don’t release.

Now, I am not saying you should release horrible product. Goodness knows, we have enough horrible products that barely work or don't work at all out in the field. I want to see great products! The idea behind this picture is so people understand that it is worth their while to consider change.

You can change to shorter projects and release something useful faster. 

You can change to agile or incremental lifecycles so they can see progress and release something useful faster. 

You can adopt a more reasonable approach to the project portfolio, and make decisions more frequently. (Does anyone really think project portfolio decisions last a year? Come on.) 

You can consider paying off some technical debt. I used the build system in my example. I could have used automated tests or the thousands of defects some of you have in your defect tracking systems. It’s whatever prevents you from knowing you could release on a “moment’s” notice. I would like that moment to be under an hour. I bet for many of you, less than a day would be a huge improvement.

You can optimize for the entire project or program, not their feature or team. Too often, I hear, “My part is done.” That does not matter. It matters what the entire team, project, or program finishes.

In my talks about project portfolio management, I am fond of saying, “It doesn’t matter how many projects you start, it matters how many you finish.”

With cost of delay, it matters when you finish them. Because until you finish them, no one pays you.

Originally published June 2014

Further reading

How Do You Calculate the Cost of Delays?

Lean Tools: Cost of Delay

Topics:
agile ,cost of delay ,making money ,teamwork ,project management ,technical debt ,impediments ,roadblocks ,time to market

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