Visual management allows you to have tangible everyday conversations about the work in progress -- it makes work visible. It's such a simple concept and the return on investment is huge. It's a core principle of Lean.
What's the ROI of visual management?
Every once in a while, someone asks me for help in creating a cost justification for a Lean Project Management initiative. Budgets are usually prioritized by ROI or similar measure, and unless the request includes a believable description of the economic benefit, it’s going to be ignored...
We’ve blogged several times on the very high Cost of Delay. And most companies seem to accept the fact that being late to market with a commercial product will cost them a lot of money. But they are sometimes skeptical about whether or not Lean or Agile management software will really have a big impact on schedule. This concern most likely comes from the fact that a lot of companies have implemented a lot of solutions with the promise of reduced cycle times, and many of them have not delivered.
However, I recently thought of a new way to show how Visual Management Software compares to other solutions and why it delivers such impressive results.
Why is Visual Management Important?
One of the biggest changes to hit R&D for manufacturers was the switch from 2D wireframe CAD to 3D solid modeling. Once the benefit of these tools became known in the early 90’s the next fifteen years were a frenzy of adoption. I was an engineer at a company that made that switch and I documented a 4X increase in the number of parts the mechanical engineers designed per year. It was quite impressive!
But it's clear to me that Lean and Visual Work Management will actually have a bigger economic benefit.
How can I say that?
Even though an engineer can design parts four times as fast, that doesn’t mean the project gets done in one fourth the time. That’s easy to understand. There’s a lot of other work on a project, and the mechanical design might only be on the critical path for a small percentage of it. (If at all.)
The image below is a highly simplified example of major project phases, various departments, when they’re active on a project, and when they’re on the critical path.
So here’s an example of 3D CAD and how it might have made an impact on a very small portion of the critical path for Engineering.
Why Lean Visual Management Software Has a Higher ROI
But Lean Visual Work Management is a different story. Because it’s used by the entire team for the duration of the project, its impact to the schedule is much, much greater than any point solution could ever be.
This helps to explain how we consistently get case studies of cutting project times in half or more. In fact, our best case study actually cut their development time by 85%. (I know that sounds impossible so I’ll write a separate blog explaining in more detail how that happened.)
So the next time you’re trying to get a Lean or Agile Project Management initiative on your budget and need to prove its value, use the explanation above to show that it has the potential to make a bigger impact on the schedule than any point solution possibly can.
(Warning shameless plug…)
Wanting to explore more about Visual project management software? Check out the on-demand video demonstration below that shows you two paradigm shifting concepts about why projects are late. Then watch part 2 to see how Playbook solves for these issues.
5 Visual Project Management Software Requirements
Lean Project Management and Kanban
Visual Management Boards
Four Essential Features of a Visual Management Board
2 Essential Features of Visual Management
Visual Management ROI
Guide to Visual Management
Guide to Kanban