Project Justification: Trade-off Options
The justification for a project isn’t always obvious. There could be a lot of negotiation to address conflicting business needs. And it can go beyond juggling the triple constraints of cost, scope, and time. When the team is struggling to agree on project justification, here are some trade-offs to consider.
- Resources versus project finish date. Project requirements often come with pre-set, aggressive deadlines. Adding resources, including contracting specialized skills, is one way to meet those deadlines. Keep in mind, even with more resources, aggressive deadlines can increase risk because the schedule is more sensitive to resource changes and task completion issues.
- Using out-of-the-box, configuration, or customization when implementing software. Software products often come with a standard set of business processes they support. This out-of-the box approach to implementing software is the easiest and least expensive. Most software packages also supply features to configure the product, providing flexibility to support varied business processes. While configuring is more expensive and time-consuming than using out-of-the-box software, configuration can enhance business efficiency and effectiveness. Alternatively, businesses might choose to customize the software to address specific or unique processes. Customization is costly and comes with inherent risks, such as compatibility with future software updates from the vendor. Prioritize using out-of-the-box or configuration. Reserve customization for cases where the business relies on proprietary and unique processes that require tailored software support.
- Deliver in phases versus running one large project. Many stakeholders submit a broad set of project requirements. While they are all useful, you might not need all of them to deliver business benefit. Breaking a project down into phases means you can deliver value earlier. It also reduces risk, especially when project team members have day-to-day operational responsibilities. A longer project means it’s more likely that key team members will be pulled away to handle operational needs. Finally, when the business is cost-conscious, a smaller project is helpful. The initial project phase will cost less. Also, stakeholders will scrutinize the requirements for future project phases, because they need a stand-alone business case. Finally, as business conditions change, a seemingly important requirement might not be as crucial.
- Quality versus speed. Quality versus speed is a powerful yet risky trade-off. Sure, you can reduce project cost and deliver products sooner by using fewer quality assurance processes. However, the project cost might increase if the delivered products have errors that affect the business, or worse yet, your business’s customers. This trade-off is often made late in a project when deadlines are at risk, and teams are desperate to deliver on time. Discuss this trade-off possibility in advance before deadline pressure is present. Negotiate to keep the quality assurance processes needed to protect the business from costly errors.
- Long-term maintenance versus initial development. In product development projects, a crucial decision involves identifying the ongoing maintenance activities required once the project concludes and the product is in daily use. You can minimize product maintenance by investing more effort, cost, and time during development. Development for a simpler product can be faster and less costly, but it can increase maintenance effort and long-term usage cost. For example, you could build a machine that is self-lubricating, which would be more costly. However, maintenance would involve ensuring that there was enough lubricant for the machine to work properly. The simpler machine would cost less to build. But then, it would require effort, resources, and downtime while the machine is periodically disassembled and lubricated manually. Working with the product designers, project managers can identify the holistic total cost of ownership to negotiate project approval.
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