Why Product Engineering Always Goes Over Budget — and what to do about it

Mar 1, 2023 | 0 comments

In our research on why product development often exceeds the initial budget estimate, we found more than 60% of the root cause to be a failure to understand all the tasks that needed to be done to complete the project.

Most engineering teams were good at determining how many man-hours it would take to complete a specific task; however, what they were not good at was determining all the tasks that needed to be done.

One interesting, and reinforcing, fact from the study was what tool you used to determine budgets. If you used a GANTT chart to determine budgets you were three times more likely to go over budget than if you used a Drawing Tree.

GANTT charts do a great job of managing the interdependence between tasks — but they do assume you know what task needs to be done.

Drawing Trees are less about the interdependence of tasks, and more about defining which tasks need to be done. Some would argue that a drawing tree defines “done”, in that it requires one to know all the drawings that need to be completed; where complete equals drawing done, drawing reviewed, prototype made and prototype tested.

Although we never saw a case of a team that used both a GANTT chart and a Drawing tree, the two are not mutually exclusive.

Our conclusion is that a drawing tree does a much better job of making sure you understand all the tasks that need to be completed in order for the product development project to be “done”. Whether you decide to use this tool or not, the point is that it is just as important to understand all the tasks that need to be completed as it is to understand how many engineering man-hours each task will take.

For us, a drawing tree feels more relevant than a GANTT chart as the output of product engineering is a set of drawings that, if followed, will create a product that meets the requirements.

We have a good Drawing Tree template Here.

BTW — the second most common root cause for being over budget was not understanding the difference between Invention and Engineering. See our White Paper here.


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