A frequent topic for me is reacting to challenges. The reason for discussing these topics is that from my experience, things going wrong is what impacts projects and people the most. These issues cause extra costs and possibly impact project deadlines. Obviously, problems will happen, the key concept is to understand the cost of a problem. While some things are intangible, such as opportunity cost, the perception of the company, and customer satisfaction. There are costs that are measurable, the cost of the employees time, the cost of travel, expedited shipping fees for replacements, and the overhead costs for these tasks.
At times not all of these costs are considered when evaluating solutions. Several years ago I was traveling for a project when my laptop had a hard drive failure. I thought about the cost that this failure could be under different circumstances. There were multiple solutions I evaluated:
- Take the laptop a service center to have the laptop fixed
- Replace the hard drive and reinstall the operating system and all of the applications
- Have a laptop shipped from the office
- Purchase a computer
Which one would you pick?
I decided to purchase a low-cost computer, The reason was considering the other costs involved an extra day in the field costs more than a computer. There would not be a delay waiting for the laptop to be serviced or be shipped from the office. There would not be the time taken to install the operating system.
The calculation to come up with that solution was looking at all the impacted items. I started thinking about travel costs, I would need an additional hotel night (US$150). There would be additional costs of meals (US$40). The charge of an extra day of the rental car (US$40). The dollar amount to change the flights (US$150 service fee & ~$125 fare difference). The one that was hard to quantify, the cost to the relationship with the customer. The other key one, my time away from home. The cost was over US$500 from the travel impact alone. Of course, these numbers vary quite a bit. I purchased a computer with Windows installed and the level of processing power needed for under US$500. for the curious, it was an Intel Next Unit of Computing or NUC. The other item I thought about is that buying a NUC meant that I would have a spare computer after the project instead of spending the same amount of money for travel.
I now travel with a second computer the vast majority of the time. It could be the NUC or my personal laptop.
The cost of US$500 for a one-day solution of buying a new computer was the most practical option. It would not appear at first glance to be that way. It could be another scenario such as purchasing a product at a local store instead of going back to the shop to get the same product. The cost of time and mileage might be more than the difference in price between paying the retail price instead of the dealer price. Truly understanding the complete cost of a solution may change the solution that is chosen.
Thanks for reading and I hope this helps you be aware of the true costs. Now if you will excuse me, I need to backup work I did today while traveling…
Note: Bradford is employed by Harman and wants to indicate that clearly. Harman is also an underwriter of AVNation. He does recuse himself from discussions to avoid any conflict or confusion when appropriate. He will represent Harman on occasion such as interviews at trade shows. This column is his own opinion and does not intend or attempt to speak on behalf of Harman.