Timely completion of any project—system implementations or upgrades, production line improvements, development of a new product, the addition of another facility—is critical in ensuring the organization gets the best return on its investment. Delays inevitably lead to costs in one form or another. Financial impacts often occur in the term. For example, if the schedule slips and it isn’t noticed until late in the project, any corrective actions are likely to be expensive but still close to the primary project time window. Further down the road, delays could also result in spending more time and money to execute follow-on projects that clean up the mistakes made the first time around.
Other costs might also come back to bite you later. Some are less obvious or tangible, and several have the potential to cause damage over the long term. If your project is at risk for delays, consider all the ways it could cost you.
Lost market opportunities
Depending on the project’s anticipated results, there’s a chance your company will lose out on opportunities in the marketplace if activities aren’t completed on time. That could mean you aren’t able to expand operations because you missed a favorable window in the financial environment, or your competitors jumped on an emerging market before you were in a position to take advantage of it yourself.
Regulatory fees and penalties
Any number of mandates could be at play in your project. Safety obligations, industry requirements, local permitting or zoning conditions that must be met—they will all have some form of penalty if your organization doesn’t comply. Lagging behind a compliance deadline typically incurs hefty financial costs, and while mounting fees and penalties are bad enough, the nature of the regulations might also be prevent you from conducting business until you’re compliant. You can add lost revenue to the mix for every day your project’s schedule slips.
Low employee morale
When workers see that their efforts aren’t producing the desired results, frustration will soon take root. This could escalate if the situation continues, and will be further exacerbated once it becomes clear that problems are lingering rather than being resolved. As delays continue, your company runs the risk of gaining a reputation for poor project performance. This could prompt key employees to leave for more satisfying job opportunities elsewhere.
Reduced hiring prospects
Job candidates are increasingly savvy when it comes to researching potential employers. If your organization becomes known for late projects—and all the negative impacts that follow—you’ll have more difficulty attracting the best professionals. It’s a particularly vexing problem for project teams because it signals the beginning of an unfortunate cycle: you feel you need more experienced employees to achieve consistent project success, but those skilled individuals rarely want to work in an environment where they know they’ll be buried in recurring, systemic problems.
Diminished customer satisfaction and loyalty
Your customer base isn’t blind to delays that impact market availability of your product or the release of new or updated offerings. Customer retention will inevitably take a hit if delays prevent you from properly supporting your market base, and buyers will soon begin looking for alternate providers to serve them. Some of those customers may never return.
Internal waste and inefficiency
Projects intended to streamline operations or improve business processes can be among the most costly. For every day your project remains behind schedule, your company is losing money on wasteful practices and inefficient workflows. You’ll continue to spend more than you need to on labor and you’re unlikely to maximize your potential for revenue until the delays are resolved.