The cost and benefits of quailty

Building quality steps in the schedule adds a certain amount of effort and cost to the project. However, these incremental costs will be rewarded with shorter timelines and reduced costs throughout the life cycle of the solution. Examples of the cost of quality include:
Deliverable reviews. There is a cost associated with the time of the people attending the reviews. This includes any preparation, the actual review time for all participants, and the resulting follow-up work from the review.

Creation of the Quality Management Plan. The time required to plan quality into the project and the solution, including identifying completeness and correctness criteria.

Client approval. The time and effort required for the client to review interim and final deliverables and formally approve them as being correct and complete.

Testing. Testing is a part of the project life cycle and it is done to ensure the solution meets requirements and quality standards.

Quality control standards. The time and cost associated with defining relevant standards utilized throughout the project and/or the organization.

Audits. Audits are opportunities to have an outside party review the processes used to create your deliverables. Third party auditors provide a fresh perspective and unbiased opinion on whether good work processes are defined and are being followed. However, there is no question the audit takes extra time and effort on the part of the project manager and the person doing the audit.

Checklists. These are usually used to validate that all steps of a process were completed or all the components of a deliverable are in place. There is a cost to create them and a cost to fill them out.  

Quality Control and Quality Assurance Groups.  If your company has distinct groups that specialize in quality control or quality assurance, their costs are part of the overall costs of quality for the organization. 

Gathering metrics. Metrics are normally gathered to show the status of a process and to correct or improve the process if necessary. Collecting metrics takes time and there is an associated cost.

The Benefits of Quality

The costs of quality must be weighed against the benefits of providing a quality solution. Whereas many of the costs of quality show up in the project, many of the benefits of quality show up over the entire life cycle of the solution. The benefits of quality include:

Increased client satisfaction. Fewer defects mean that the client will be more satisfied. Higher service quality will also make the client experience much more pleasant. If you are in a “for-profit” business, this will result in goodwill and may translate into additional sales, or higher margins on future products.

Higher productivity. Fixing errors and reworking previously-completed deliverables are a drain on productivity. In fact, they contribute to negative productivity. If the deliverables are produced with higher quality and less rework, the overall project productivity will go up.

Lower costs / shorter duration. Although there is an initial higher cost to a quality process, this is more than made up with less rework toward the end of the project. This will save time and cost on the project.

Higher project team morale. Team morale suffers if there are many errors uncovered during the project. People feel bad when errors are uncovered and it can be frustrating to have to correct errors repeatedly. Team morale will rise (or at least hold steady) if deliverables are created with fewer errors the first time.

Fewer errors / defects. Higher quality shows up over the life of the solution with fewer defects and errors. If you are producing a product for sale in the marketplace, higher quality means fewer returns, less warranty work, fewer repairs, etc. If you are creating a long-term solution, this means less support and maintenance problems over the life cycle. 

The Cost of Poor Quality

It costs money and time to build a quality solution. You may think that it is cheaper to leave the quality steps out, 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. 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.

Repairs / maintenance. This is work that is done to fix problems after the solution goes live.

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 (but not all) of maintaining a help desk service may be required because the client has problems with your solutions or has questions understanding how to utilize the solutions.

Support staff.  Much of the effort and cost associated with a support staff is needed to maintain and support a solution because of problems, errors, questions, etc.

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.

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