Although the exact wording of this point can vary, it is generally something like “Stop making decisions solely on the basis of costs.” However, I feel that the textbook title is inadequate. Deming speaks about not making decisions solely based on cost. He is talking about a plant perspective and the importance of having regular suppliers. This fosters long-term relationships that lead to loyalty and mutual improvements. It is not always cheaper to switch vendors based on price. You will end up paying more long-term.
This principle is applicable to projects in two ways. First, consider the costs and benefits of a project as a whole system. This includes not just the project, but also the department or customer that is paying for it. Second, consider the expected lifetime of the final deliverables and not just the duration of a project’s creation.
The Whole System
Projects must be aligned with the system in which they are being carried out in order to be effective. I have witnessed many projects that were focused on a narrow scope and caused unexpected problems for the customer or supplier of the final product. These dependencies must be considered and rework and other solutions will often be required later. These efforts often result in a situation that is not optimal for everyone.
A lack of broad consideration can also lead to higher total costs for the organization, even if the department that sponsored the project saved money. Department A might sponsor a project where the ROI is obvious when it is considered locally. Department A is dependent on Department B, so Department B must incur additional costs to adapt to the new state. It is possible that Department B would not have had to incur any additional costs if Department A was willing to do so. It is common for functional managers to “not care” about cost center silos within organizations. It is not their responsibility to look at the costs it causes for other departments. They are not responsible for the budgets of other departments, but only their own. This is an excellent example of the benefits of having a portfolio and project management team that is independent. The project can then be managed in accordance with the best interests of the entire organization.
The Total Lifetime
How many opportunities can a project manager see and use to make concessions to meet project constraints? Subtly, how many opportunities exist to improve the quality of the long term result that are missed because of a narrow-sighted project manager’s short-term focus?
It is possible to plan a project so that the actual production of the deliverable is cheap but the maintenance costs will be high and frustrating. You can run the same project so it takes longer and costs more upfront, but the maintenance cost is greatly reduced. Which option makes a project manager look more professional in a short-term setting? Which option should project managers be encouraged to choose? Which option is more likely to have a greater ROI for the entire organization if you take into account the lifetime of the project?
As a novice project manager, I find it frustrating to see the opportunities that are missed in every project. Project managers often focus on minimizing scope. The Standish CHAOS report supports this measure as a key to project success. These missed opportunities can be hard to quantify, but I believe the Standish report does not address them.
It is necessary to com