New product launches are an exciting time for a company and the project teams working to get everything ready. But they can also be tricky from a budget management perspective. With so many moving parts and so many elements that are outside the project group’s influence, there are plenty of opportunities for costs to climb. Project leaders need to proactively control waste and optimize internal processes to keep these potentially chaotic budgets in check.
If your team is getting ready to put a new product out into the world, consider these tips to help you avoid a budget blowout along the way.
Begin by developing clear, detailed objectives. A lack of clarity around what you want the product launch to achieve sets your team up for budget problems since there’s a good chance stakeholders will eventually try to redefine what they want the project to accomplish. That could mean adding features to the product before it’s released, scaling the marketing program, or conducting additional focus group interviews. Your team could be pushed into making uninformed decisions when presented with new or expanded requests, and additional charges may also result—from expedited shipping, off-hours labor, or other unplanned costs—if your efforts to resolve what amounts to scope creep also result in delays.
As you put your launch project together, focus on maintaining rigorous quality controls to help you keep costs in check. This may seem counterintuitive—people frequently cut corners in an effort to minimize expenditures, but eroding your product’s quality can actually create cost overruns. It often happens when the lack of attention to quality becomes an issue when someone notices it at the eleventh hour, leading to steep expenditures as the team scrambles to quickly fix everything that was overlooked earlier. Stay on top of quality checks and you can avoid those last-minute ballooning costs.
Create a project plan that’s thorough and concise. Most product launches have a plan, but often they’re vague, leave too much leeway for tweaking mid-project, and generally don’t provide solid guardrails to keep stakeholders on track. You don’t want your team wasting resources on activities that aren’t necessary for the launch, such as bringing on product specialists long before they’re needed or spending ad dollars too far ahead of the product’s expected availability date. Give everyone enough details to keep the project’s dollars focused where they’ll do the most good at each stage.
Take the time to develop cost estimates that are accurate and timely. For some companies, there can be years between new product introductions. Unfortunately, that means the cost data from the most recent launch may not be of much use. Rather than padding those far outdated figures and hoping for the best, encourage your team to put some solid effort into researching what expenditures for the project’s activity list look like in today’s market. Consider reaching out to your peer network to see if anyone has recent information they’re willing to share or contact an industry or trade group and inquire about benchmarking data that may be available.
Evaluate new technologies for potential cost-saving opportunities. Automation platforms, collaboration software, and document management systems are among the technologies that may have useful tools to help your team tame budget overruns. These systems can help you maintain better visibility into approval status and contract compliance, for example, enabling you to more reliably avoid unexpected (and unbudgeted) penalties and surcharges related to late permit submissions or uncontested change orders. Purpose-built platforms also provide real-time insight into market data to ensure your product targets the latest customer preferences and edges out competitors’ current offerings.