Sta Hungry Stay Foolish

Stay Hungry. Stay Foolish.

A blog by Leon Oudejans

The cost, quality & speed trade-off

In project management, there are three main criteria for measuring whether projects are successful: on budget, meeting deliverables, and on time. It’s nearly impossible to reach 100% for all three criteria simultaneously. Usually, you must compromise on one, two or even all three criteria. Hence, the title of his blog.

 There are several reasons for this cost, quality and speed trade-off:

  • project budgets are often based on marginal costing rather than full costing as full costing might delay and/or jeopardise project approval;
  • future deliverables are underestimated because existing deliverables (eg, in legacy systems) are (invisibly) supported by many (unknown) user-developed systems (eg, databases, spreadsheets);
  • timelines are top-down and based on wishful thinking rather than a bottom-up process that ensures organisational support. Moreover, top management involvement (in hours, on site) is often hands-off (eg, mitigation of reputational risk) unlike building a new HQ.

The most notorious example of the above is the implementation of Enterprise Resource Planning (ERP) systems, like SAP or Microsoft Dynamics NAV. These ERP systems have their own default deliverables that may not be obvious. A known or unknown mismatch between default deliverables and expected deliverables may create many (expensive) user change requests.

Human beliefs are responsible for the cost, quality and speed trade-off:

  • budgets: low-balling, “a persuasion, negotiation, and selling technique”;
  • deliverables: underestimating what needs to be done, while overestimating what can be achieved;
  • timelines: toxic positivity from start to finish, despite delays and setbacks.

In the view of the people involved and the management responsible, any project only has downsides (eg, failure to deliver on budget and on time, future staff redundancies, reputational risk). Often, project completion follows a famous proverb: success has many fathers, while failure is an orphan (eg, accountability and responsibility).

Remarkably, projects seldom have a clear upside (eg, bonus, promotion). Hence, the risk-reward balance (my blogs) in any project is unappealing for the people involved and the management responsible. Projects often feel like games without frontiers.

Games Without Frontiers (1980) by Peter Gabriel

artist, lyrics, video, Wiki-1, Wiki-2

If looks could kill, they probably will 

In games without frontiers, war without tears

Note: all markings (bolditalicunderlining) by LO unless stated otherwise.

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