“The Cost of Quality”

More than a decade ago, I was working with another Senior Consultant. He  remarked a phrase about the team “If you throw peanuts, you will get monkeys”. The phrase was mainly targeted at the resource experience and output quality. Since he said it out loud so the remarks were not taken too well by my team and also by myself. With the passage of time, I realized that this phrase is more directed towards the project company owners rather than have to do anything with the capabilities of the team.

It is an undeniable fact that quality and experience resource cost way too much as compared to any average level resource. But the question is that do we always need experienced resources? I have discussed in my article, Articles “Specialist or Generalist”  regarding importance of both categories and need of either one of them on a project

One fact that stands out despite whatever level of resources are being engaged on the project is that the Project Sponsor should realise the Cost of Quality. When planning the budget for a project, there are always two kinds of costs that are related to what level of resource to be engaged on the project. There are two kinds of such costs, direct cost and indirect cost

The direct cost refers to the upfront cost of the resources. As discussed earlier, quality resources will cost you much more. So based on the complexity and importance, the right level of resources should be requested. For example, if a project is expected to go through certain security checks or has high level security requirements, then you should certainly use an experienced resource in that domain. Similarly, If a project is of high value and is critical to have proper execution, an experienced Project Management Team or a seasoned Consultants to provide Governance and support during the project execution will be the way to go about it. This cost is always calculated as the part of the project cost and is almost clear from the start of the project.

The indirect cost refers to the cost that occurs to the rework. The rework  can occur due to poor Quality or changes in plan due to change of priorities or due to requirements visibility. This cost may or may not be part of the project reserve. This type of cost is never visible till it is actually realized and is mostly the main reason for early project cost exhaustion. It is often the main difference between different levels of resources that the quality of solution, the algorithm and the coding practices are  much better when executed by experienced resources. 

The poor quality can cause a lot of rework at different levels by different resources and all this adds up as a cost of poor quality. Similarly if the requirements are not clear or conceived  properly then it can also be a cause of additional indirect cost. The Customer and Project Sponsor should be able to understand reasons behind both direct and indirect costs so that they should be able to take the risks accordingly

For me, it is always important to have a good share of cost added into the project budget for direct cost as “Cost of Quality”. Similarly the project reserve should be set to an extent so that it can cater for any incurring indirect costs. The direct cost can always be measurable and indirect costs are unlimited. The same goes for cost control.