Let's start with time. What criteria drives this parameter? New regulations? Other big projects planned for next year? To be clear, time is not about planning. The project team will carry out Planning later. This process involves defining a time window that will enable a successful project to be delivered. But first, we must think about the costs associated with delays and artificial deadlines.
Costs of delay
A business exists to make money, so it is logical to prioritize profit-maximizing activities. Calculating your cost of delay allows you to do exactly that. It is a way of communicating the impact of time on the outcomes that you hope to achieve. Let us use a simple example to illustrate this concept.
If you're developing a product that will add a value of $10,000 per week to your company, you are essentially losing that amount for every week that you are late. A delay of six weeks will cost the company $60,000. If you have the benefit of knowing this up front, it would make sense, for example, to hire an additional programmer for $15,000 to get the product released on time. After all, you would still be $45,000 better off
Artificial deadlines are those imposed by management rather than a customer's expectations, legal requirements, or a deadline negotiated fairly between a project's stakeholders and the project team. Quite simply, an artificial deadline does not materially affect the end product. Of course, practically any artificial deadline can be justified. The question is, what is its importance relative to other deadlines and priority items? Examples:
- We need to implement the CRM tool by March 31.
- We need to finish our reorganization by the end of this month.
- The customer wants the product by July 31.
- The new compliance law is active as of January 1.