The killer argument

Evaluating costs: why "one-time" set-up costs matter.

When evaluating a project’s output IT and Engineering departments have a killer argument for evaluating what costs matter and which ones don’t. They handwave away one-time setup costs as necessary evils and focus on the time required to accomplish the variable future work. They argue that once the system is put in place, the fixed setup costs will be a wash relative to the variable ones. 

It’s a hard point to argue with and unfortunately that doesn’t just kill the debate -- it kills innovation. 

At the heart of a company that’s innovating is the ability to easily figure out WHAT to build. A process that, in the startup world, is known as finding product market fit

When a company is iterating through the product discovery process, agility is key. The company must, as quickly as possible, learn from fast iteration loops and customer feedback. This is where the old adage of fail fast comes in.

Therefore, I’d argue that we need to be a little bit more deliberate about analyzing the costs that we incur in projects. We should account for setup, access, deployment and testing times. 

We should pull the process improvement chord every time we find ourselves waiting for something that can be done instantly through automation. 

We should keep ourselves honest about the impact that all these non value add costs have on our organization as a whole.

Above all, we should keep everyone excited to work on the hard problems they are solving and allow them to maintain their flow in the problem solving process.

It’s simple: the more projects you do, the faster you fail at projects, and the more the project setup costs matter.