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Track 2000
Case 5: Behind schedule, over cost and fine
In Figure 9, a project has a high Return on Investment [$150,000] based on estimates of development costs of $100,000 and suport costs of $100,000 but faced with potential development cost blowouts the team has two options.
- In Option 1 which is similar to Case 4, the team can degrade the quality of the system. This will result in the support costs being blown out from $100,000 to $200,000 and the expected Return on Investment being reduced to $50,000.
- Option 2 is that the team allows the development costs to blowout by 30% to $130,000 and to delay shipping by a few months. The support costs are maintained at $100,000 but expected benefits are reduced to $300,000.
Option 2 results in a better Return on Investment of $70,000 than Option 1. However, the team would be shown as behind schedule and over budget in traditional tracking reports.
