The costs of not dedicating resources

I've recently finished a project that exemplifies the hidden costs organizations incur through the lack of dedication of resources, or assigning more projects than what the current level of resources can successfully handle.

Every company, large and small has projects that need to be done. Projects are anything that is outside of the normal day to day activities involved in running the company. Some projects are done as a one time, while others like software upgrades will be performed periodically over the life of the software, company or both.

The company that I currently work for is big, a billion plus in yearly revenues. This company also has the luxury of high margins and a double digit growth rate. This roughly translates as money is usually not an issue to not do a project, and things change to accommodate growth. Things do change except in how the company views its projects. A large portion of growth for this company is through acquisitions of smaller companies. At smaller companies most projects can be done by someone as part of their normal day to day activities. Outside of something that totally changes your business, or you get bought by another company, you will rarely dedicate someone full time to a project. Since a large portion of the people in place to make decisions came from smaller acquired companies, the decision making on dedicating people to projects tends to follow the route that a small company makes. This becomes an issue when the project is now 100 times bigger for a big company as opposed to when they worked at a smaller company.

The biggest item that affects a project that lacks dedication of resources is time. Any time line defined for a project that does not have dedicated resources, will slip and miss deadlines. This project took 2 years to complete, with the first year of work being the equivalent of a throw away of all costs incurred. The project with proper dedication of resources should have taken 90 to 180 days. Training people on the upgraded software was the biggest time consuming item.

Another major item is the perception of a project. People do not want to commit time to a project, where dedication by upper management is questioned. Why is it questioned? If management did not think it was important enough to dedicate resources, then the project must not be that important to the company. This project was considered very important to the company, but it still lacked dedication. This software prior to the upgrade was preventing 10 other major company initiatives from being implemented.

A Third major factor is the increased risk of failure as the time line of a project drags on. When this project started out, The IT side had 3-4 resources semi-dedicated and knowledgeable about the product. The business side had 1-2 people semi-dedicated and knowledgeable about the product. By the end I was the only dedicated IT person, and the business had 1 that was dedicated but whose knowledge only came about by doing the project. Net effect there was 80% turnover and we were really down to if I left, the project would probably have to be extended for another year.

To sum everything up, not dedicating resources cost you time. Time costs you money and resources. More money and resources may cost you the success of your project. Rinse and repeat this with your company enough times and it may cost your company's long term viability. In other words, higher project cost brings lower returns on investment (ROI). Lower ROI, bring lower profitability. Lower profitability leaves less money to re-invest into the company.