Product Development Budgets – Wishful Thinking?
“Ask no questions, and you will be told no lies”
Charles Dickens
Great Expectations
Ask your average product development engineer how long a project will take or how much it will cost, and you may get wishful thinking. Sometimes people tell you what you want to hear versus what you need to hear.
In order to make good decisions, you need good information. This is especially true when it comes to new product development. By definition, you are developing a product never before produced, and perfect information about its cost and/or development schedule is just not possible; however, here are some tips for getting better information.
Ask the right questions –
No one can know the cost to develop a product that is not well defined. Trying to know the development cost before a vetted Requirements Document and Conceptual Design is done is not going to produce useful information.
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Do not assume perfection –
People have a tendency to plan based on success only. Why plan to fail? However, product development is risky, complex, and just plain hard to do. Producing a plan that has no “wiggle room” is just not realistic. You should always ask: How much-unplanned activity did we have on the last project? Did we build this same percentage into this new plan?
Keep Asking –
We evaluate plans every week. How much have we spent so far and what percentage of the project is completed? If the number changes significantly, it’s time for reevaluation.
Culture –
Product Development does not thrive in a culture where “failure is not an option.” As Winston Churchill said, “Success consists of going from failure to failure with no loss of enthusiasm.” A culture which accepts failure, and learns from it is going to be more likely to integrate new information and pivot the plan to success as compared and contrasted with stubbornly sticking to original assumptions until it’s too late.
Wondering if your product development budget is realistic? Click here for our Project Estimator Spreadsheet .
Excited to explore how this guide can transform product development strategies! Budget hurdles shouldn't hinder innovation.