A Lean perspective on product delivery cost optimisation

Optimise for overall cost by looking at the entire system, not by local cost-cutting. If you study any product delivery process, you will notice that most costs are associated with non-value adding activity, typically waiting, coordination mistakes, and ineffective learning.

Localised budget and/or headcount caps almost never lead to systemic cost improvement. Context-free caps are more likely to lead to gaming between areas rather than seeking overall understanding.

Having said that…

You can probably run your product delivery process more effectively with less people. Alternatively, you can probably produce more value from your product delivery process without adding more people. Many product delivery systems have too many people involved because of over-specialisation, which requires more coordination, which requires more coordinators, who themselves require more coordination…

For the moment, the advantage humans have over machines is that we can learn and adapt to situations more effectively. “That’s not my job” should be what a machine says, not a human. Humans are nominally more flexible than machines; over-specialisation of roles undermines human flexibility.

As long as everyone has some visibility of the larger context, it’s okay to engage in local cost-cutting as well. It can add up. More importantly, it allows everyone to participate and feel involved.