Cost

Understand the scale of the problem and impact of any solution.

Optimum decision-making involves balancing these dimensions, which are often in conflict.

Increased investment should always be tied to clear risk reduction or value creation. If we are spending more, we need to understand *precisely* what additional risks we are mitigating or what new opportunities we are unlocking. Are these risks significant enough to justify the added expense? This question forces us to justify costs and ensure every dollar spent contributes meaningfully to risk management or business value.

Resource estimation needs rigorous justification, not just gut feeling. "X man months" is a significant commitment. We need to dissect the estimate and understand the *breakdown* of work. Are we over-engineering? Are there inefficiencies? Challenging timelines and effort estimations ensures realistic planning, resource optimization, and accountability. It prevents bloated timelines and cost overruns from the outset.

Cost transparency is vital for understanding true product economics. We need to separate core product development costs from compliance, administrative burdens, and overheads. How much are these non-product elements eating into our budget? Understanding this breakdown reveals hidden costs and inefficiencies, allowing us to optimize spending and improve the overall cost-effectiveness of our product and operations.

Problem sizing is critical for appropriate resource allocation. Are we tackling a massive, strategic issue or a smaller, tactical one? The scale of the problem directly dictates the scale of investment it warrants. Over-engineering a minor problem wastes resources. Under-investing in a major problem leaves significant value on the table.

Quantifying the benefits is essential to justify any product investment.

Measurable benefits provide accountability, demonstrate real impact, and inform future product decisions based on data-driven evidence of success.

Benchmarking and continuous improvement are key. Simply achieving some savings isn't enough.

Every cost component must be justified, especially non-value-add overheads.

CAPEX reflects upfront investment, OPEX reflects ongoing running costs. This distinction impacts budgeting, financial modeling, and pricing strategies, as both types of costs need different handling and approaches.

Though traditional contracts/projects need estimation for an effort, it's near impossible to know upfront how much effort is required. Naturally the incentive is to overestimate, add more buffer. Even when eventually the effort is smaller, there's no incentive to downsize, because it's additional work.

We're bring tons of people to the team, based on a vendor's hyper specialization and billable rates.

Every $1 spent unnecessarily is unacceptable. I'm a taxpayer too! And if you calculate per unit/transaction costs, you can see clearly excessive spending.

If something doesn't work or doesn't work well, then consider if stopping it gives you future savings + a chance at getting something that solves your problem, versus abortive costs and switching costs.

They are going to milk you like a cash cow via change requests (formal proposals for modifications to a system). Also, them offering you a non-product to you means you're their guinea pig to see if something is profitable, and you can be sure they know you're desperate for this set of requirements.

Budgeting and resource allocation should be data-driven and rigorously justified, not based on vague estimations or gut feelings.

Justification should be based on the problem and value delivered, not historical spend. Anchoring costs to previous projects ignores current needs, market changes, and potential for optimization.

A tiny market and forced user adoption are unsustainable. Projects should aim for genuine user value and market demand, not rely on regulatory mandates for existence.

'Unique requirements' is a common but often incorrect diagnosis of your needs.

What you do needs to be focused on solving the actual problem now, not continue what you have been doing.

It's wasteful. You wouldn't pay for it with your own money, why would you do it with someone else's? Scale up only when there is actual demand.

Resource allocation should be risk-based and proportional.

Digitalization and tech are the means to an end, not the end in itself.

It's fiscally irresponsible and prioritizes spending over value creation.

Scope creep driven by funding opportunism leads to unfocused and bloated projects.

This suggests a lack of initial clear objectives or achieved outcomes. Projects should be driven by clear value propositions and ongoing needs, not by the need to constantly invent justifications for continued funding.

Forcing approvals on complex issues that stakeholders don't understand undermines accountability and sound decision-making.