Regarding COST and Schedule

Regarding COST and Schedule

Tuesday, June 22, 2010

How do we make products 

competitive, better, cheaper and in short period?

OR

How do we do build products in reasonable time?

As a person joins an organization, his senses of cost and time ($ + T) evaporate.

Simply because,

it is his Job to do his “Job”,

sadly “Job” definition does not cover the clause “in the required budget”.

When same person has to get things done for himself, 

out of his pocket and time,

all of a sudden he becomes rational about $ and Time.

Why it takes time to build products?

Because scope inflate.

Minor reasons also exists.

Why scope inflates?

Because there is poor self disciplinary intention.

Our natural intension of “being in safer situation” is stronger.

Adding more buffers in the plan and demanding further more resources.

Both Time and Resource inflate $ cost.

How to control scope inflation?

You have to force,

to make it in time, 

with available resources, 

with good quality and 

with less rework.

Two places scope inflates, 

• Product Management / Analysts and 
• Engg. the development part

The Product Delivery Head

Product Delivery Head must build,

complete and quality product in a defined $ + T budget.

We (the organization) must buy the product 

from Product Delivery Head 

as if it is internal outsourcing organization.

We must buy not as a user, 

but as a buyer who is business maker,

buying it to make profit out of it.

In my experience with various organizations,

Having Product Manager or a Analyst as the Product Delivery Head,

takes organization down turn and 

Engg becomes a common target,

for not being able to deliver the killer ideas to product.

Having Engg Head as the Product Delivery Head,

takes organization down turn and 

Analysts becomes a common target,

for not being able to understand the killer technical aspects that builds the product.

It is required that,

Product Delivery Head is one who understands the business.

Essence of making money out of the work

got done from various skills and people types.

The Product Delivery Head, 

must be responsible for both Product Management and Engg functions together.

Making Product Management responsible for $+T,
will cause bad relations with Engg and same if Engg made responsible.

In absences of Product Delivery Head,

best could be both Product Management and Engg made responsible together

Making Product Manager know per day $ burning cost and budget left can significantly force individuals to look for better, smarter and cheaper alternatives.

It will force to be careful and design before building.

It will force to be careful on requirements before hesitantly building.

It will force to make resources utilized effectively.

This is an effective approach.

Business owners often wonder 

why employees do not have focus on delivery 

and rather inclined to grand things

Ownership forces $ + T dimension referenced all the time.

Employees do not “own”, nor can you make them to have same sense of “ownership” as you have.

Whats the way out? 

Force.

By tracking per day $ burnt and budget remaining.

Product development has two phases,

• Building the product and
• Maintaining the product

Maintaining the product shall take 5% of costs rate of building the product.

Maintaining the product can never end. Every day burning cost shall be reduced significantly over a period.

Building cost can be considered for cost till making the product available to market with its first two GA releases.