Playbook Logo transparent
Elyssa Pallai

VP Marketing

Digital marketer and translator, Elyssa spends her time putting NPD and engineering concepts into plain english and working on new and meaningful ways to connect with Playbook's amazing clients.

Posts containing:

What is Cost of Delay?

Elyssa Pallai- 02/28/17 05:15 PM

What is Cost of Delay?

The Cost of Delay is the amount of money it will cost the company if a product launch is delayed. It’s a metric you need to know as the cost of delay is often worth millions of dollars in profit.

We can assume then, that creating fast flow in your new product development project is critical to your bottom line! 

Why is the Cost of Delay is important?

First, Cost of Delay provides a sound economic foundation for making decisions regarding which projects should get priority across an organization. It's also a good way to prioritize the implementation (or not) of new product features, tempering scope creep.

For example, Cost of Delay can answer the question, which project is going to cost me more profit if it is delayed? If the company knows the Cost of Delay for each project, it's easy to choose which projects make the most economic sense to put on hold, and which projects need to be driven to completion before the next project kicked-off.

Next, Cost of Delay can provide valuable economic input into the question, should we add this product feature before launch? With pressure from the business to add new features, the Cost of Delay can give a clear picture of the economic impact of waiting to launch in order to add a feature.

Obviously there are other reasons that a project may be prioritized over another project or a feature chosen over going live, but understanding the economic impact is a critical piece of the puzzle.

How do you calculate the Cost of Delay?

Check out our series of posts on calculating Cost of Delay. We also have a free eBook that will show you how.

Download my eBook