Wednesday, January 23, 2013

Ten Costs of Poor Project Quality

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It costs money and time to build a quality solution. You may think that it is cheaper to skip many of the quality management steps, but this is usually not the case. It is important to recognize that there is also a cost to having poor quality. These costs may not be apparent when the project is progressing, but should definitely be taken into account as part of the full life cycle cost of the solution being delivered. (Review a free e-session on quality management.)
Ten Costs of Poor Quality
Examples of the cost of poor quality include:
  • Warranty work. This includes work that is performed on a product or application for free (or a reduced price) under a warranty. If your project produces a product with lower quality you will see a rise in the cost of warranty claims.
  • Repairs / maintenance. This is work that is done to fix problems after the solution goes live. Poor quality solutions usually have much higher repair and maintenance costs.
  • Client dissatisfaction. If a solution is of poor quality, the client will not be happy and may not buy from you again at a later date. If the project is internal, the client may not want to use the project manager and team members on subsequent projects. 
  • Help desk. Much of the effort and cost of maintaining a help desk service is required because the users have problems with project solutions or have questions understanding how to utilize the solutions.
  • Support staff.  Much of the effort and cost associated with a support staff is needed to maintain a solution because of problems, errors, questions, etc.
  • Rework. This is work that is required to fix deliverables that you thought were already complete and correct. Whenever you have rework it is a sign that your quality management process is not as rigorous as it needs to be. 
  • Bad decisions. If there are errors in your solutions you will end up making decisions based on bad or misleading information. These bad decisions could have long term consequences for your company. 
  • Failure investigation. It takes time to troubleshoot and determine the cause of errors and defects that occur on the project.
  • Poor morale. No one likes to work for an organization or a project that has poor processes or produces poor quality solutions. Costs of poor morale include increased absenteeism, higher turnover and less productivity from the staff.
  • Mistrust. When project teams deliver poor quality products the client starts to develop a level of mistrust with the project team and the performing organization. The client starts to believe that the project organization can never build a good product and this starts to lead to a mistrust of project team skills, processes and motivation.
Quality management has a cost. There is also a cost to delivering poor quality. One of the key points of formal quality management is that if you spend more time and cost on quality management, you will save substantially on the internal and external failure costs. In fact, the savings for external failure costs can be substantial. If you spend more time focusing on building a better quality product during the project, the cost of supporting the product long-term may be dramatically reduced.
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