The grain of sand that slipped through my fingers yesterday without quite being completed is below.
Does the risk of the transition equal the gain provided by the new solution?
- The math for this is fairly complex. The first consideration is of course do you have to transition (if you are not competitive in your market because you don’t have a capability you have to add that capability.} That’s a forced transition and in that case speed is the most critical aspect. You find forced capabilities most often in the red ocean of competition. (interestingly by the way why do all the CSP’s have transitional frameworks – the red ocean that is IaaS.).
- A second consideration is time. Time is the driver and the destroyer for transitions. The window which represents the optimal transition time is critical. Missing that window makes the transition a failure. If the cost remains high and the transition misses its potential window in the end the chance of cancellation increases.
- A third consideration is the overall cost. Time, I’ve been told time and time again is money. Time isn’t money. If time were money immortality would have been achieved by the elite years ago. Time is an asset in transitions money is also. Enough money can buy time. A project that comes in with a high price tag may have a larger window than a project that has a small initial cost. Its inverse to logic but in reality if you are spending a lot of money the ability to cut the cord moves up the food chain (how is that for mixing two metaphors and creating a new one). Reality the more money it costs the higher the person has to be in the organization that can in the end terminate the project (or in the first place approve the project as well). Simply put expensive projects often have board level visibility which can be good. (of course the inverse is also true).
- A fourth Consideration is the Return on that initial cost or ROI. There is an old saw about doing technology for technologies sake. It isn’t relevant in the end because not one ever did that. Certainly some R&D shops play with technology that is beyond the pale. But it isn’t beyond the need. The R&D failure of today can become the hot new thing once its market is realized. That means that in the end if your project can align to the mission or business goals and return value beyond the cost it becomes an interesting project.
Measure the following:
- We are at a competitive disadvantage (remove time as a factor)
- We are not at a competitive disadvantage (adds time removes competitive pressure)
- In our company projects over X must have CEO approval (adds level pressure)
- Our company likes to see projects that return the cost in 18 months (adds ROI pressure)
We can dance around other variations as well there are 100’s. The four listed above are the ones I am going to build out for this series. Less that they are the be all and end all of this discussion rather they are the ones I picked.
More to come!