Bigger Profits from Faster Projects
The benefits of completing projects quicker and getting products to market is not a recent area of management concern. Indeed a seminal work in this area is "Competing Against Time: How Time Based Competition is Reshaping Global Markets", published in 1990. Part of the book was about New Product Introduction, although much of the thrust of this book was about the Supply Chain and Business Processes, which is covered by Pandora Consulting's 'Fast Five' method. [link to Pandora Fast Five page]
"Competing Against Time" looked at the benefits of getting to market quicker. Besides the obvious advantage of controlling the "beachhead" of the market they identified quantitative advantages for faster projects. The other key feature is the "time elasticity of price", which means the less time someone waits to get the benefit the more they are prepared to pay. Rapid innovators can charge a price premium for a 'fresher' product.
With a 25% reduction in the product development loop profits double for a typical project. Although this is a clear bottom line benefit softer benefits include:
- Position as the technology leader
- Cost reduction through improved design
- Reduced development costs
- Better development team morale; less time spent on 'intractable' (or wicked)problems
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