Have you noticed that costs and benefits are rarely seen together? I mean literally on the same page or board. Are we afraid of what the truth might tell us? I think this is the case when I’ve seen business sponsors protect initiatives dear to their heart. Also when product managers continue to add features to their product when user demand has already been satisfied. The blinkers are on. They pretend they can’t see anything that might cause harm to their ‘darlings’. If it can’t be seen it doesn’t exist, right?
Imagine the realization: “That benefit is a lot less than we expected. And look what it cost! That wasn’t money well spent.” It’s not nice to come to terms with this but surely it’s better to know than not to know. Clearly looking at benefits without looking at costs, and vice versa, provides only part of the picture. It’s no good business people hoping the benefits defined in the business case will materialize as promised while being ignorant of the true costs. And it’s definitely not helpful that true costs are obfuscated by the complexity of the IT organization.
Costs and benefits can change significantly at any time, during product development as well as post launch, in ways that aren’t always possible to foresee. Tracking the costs and benefits from day one and keeping them visible together can help you decide if you’re spending money usefully or not. It’s not easy to back out of an investment that isn’t yielding the expected benefits. Conventionally, tracking costs is done against the budget on a monthly or quarterly basis to check the budget is under control and the work is on schedule. Instead, look at the benefits and costs together on a regular basis and ask yourself if you’re getting a good deal because you need to decide whether to continue investing, refocus on other features, pivot or cut your losses and stop.
When business people focus on business things and techies focus on technical things, people tend not to pull in exactly the same direction. Sadly the traditional client-vendor relationship prevails between business departments and IT, with its contractual commitments and ‘I win-you lose’ mentality. And it’s difficult to replace because it’s so entrenched. Something like co-ownership, where there’s shared risk and reward is too radical.
Nevertheless, I believe the co-ownership of benefits and costs improves the odds of a successful outcome. Even if the outcome was to stop investing and walk away. If there’s technical risk, business people need to understand what its impact would be, the likelihood of impact, and take an active interest in the steps to deal with it. It’s no good just assuming the techies are taking care of it because they might not be. If there’s business risk, such as the actual business benefits aren’t adding up to those in the business case, the techies need to understand with the business people why the market is responding as it is and find options to take action.
In a recent client, we kept all measurements, from budget burn rate and profit to unique visitors and ad impressions to throughput and rework, out in the open on a big dashboard for everyone to see. We saw business people contributing to technical decisions and we saw technical people contribute to business strategy and come up with new business ideas. It looked like everyone involved demonstrated responsibility for the costs, benefits, risks and delivery of the product. The venture was a success within ten weeks and continues to be so to this day.
“All for one and one for all” as they say.
