Hidden Opportunity Costs

The Problem

While writing requirements most managers are keenly aware of the labor costs of design and development.  What they often miss is the opportunity cost associated with delays.  Every hour spent in development delays the launch of the site by at least that much.  The larger the project the longer it takes to scope out and build.

In the course of redesigning a website, or designing a new application it is  wise to think ahead and anticipate your future needs.  With so many possibilities it can be all too easy to make a project too large to handle.

A Better Idea

(the Agile development method)

Rather than attempting to layout a large project all at once, consider breaking the project down into smaller pieces.  Think about the minimum requirements needed to have a working and successful project.  Now compile a list of additional features you intend to add later.  Once the new project has been deployed you can then look back and decide how to proceed.

There are several key advantages to this method:

• Lower upfront cost
• Less risk
• Less time spent in requirements gathering
• Faster time to market
• Lower opportunity cost 
• More accurate time and cost estimates

The greatest advantage is experience.  Once launched you can more easily find the areas of the site users gravitate towards, as well as areas in need of improvement.