Cost of Delay (CoD) is a concept used in product management to quantify the impact of delaying the delivery of a project or feature. By using the CoD, product managers can prioritize projects or features more effectively and minimize potential revenue or value lost due to delay.
Cost of Delay is a term used in product management that refers to the cost of not delivering a product or feature on time. It is the amount of money that a company loses due to a delay in the delivery of a product or feature. The cost of delay can be calculated by taking into account the lost revenue, the cost of delay in terms of time and resources, and the impact on customer satisfaction.
Cost of Delay is important because it helps product managers prioritize their work. By understanding the cost of delay, product managers can make informed decisions about which features or products to work on first. They can also use the cost of delay to justify the allocation of resources to a particular project or feature.
Cost of Delay is also important because it helps companies understand the impact of delays on their bottom line. By calculating the cost of delay, companies can make better decisions about when to release a product or feature, and how to allocate resources to ensure timely delivery.
There are several methods for calculating the cost of delay, but one common approach is to use the following formula:
Cost of Delay = (Value of the feature or product) x (Time criticality) x (Risk reduction or opportunity enablement)
The value of the feature or product is the potential revenue or cost savings that it will generate. Time criticality refers to the urgency of the feature or product, and risk reduction or opportunity enablement refers to the potential impact of the feature or product on the company's overall strategy.
Cost of Delay is an important concept in product management that helps companies prioritize their work and make informed decisions about when to release a product or feature. By understanding the cost of delay, product managers can allocate resources more effectively and ensure timely delivery of products and features. Calculating the cost of delay can be complex, but it is an essential tool for any product manager looking to optimize their work and maximize their company's bottom line.