Time Based Chargeback

“Well let’s seeā€¦ the Model 7 is on special for $199, but we’re out of stock at the moment. We could order it in, but it won’t get here for 5 weeks. The Model 9 is $799, and yes, it has some extra features that you said you didn’t need, but we have a couple in stock, so you can have it right away.”

You have a project to complete. You need a certain thing to finish it. The Model 7 does everything you need. So does the Model 9, plus it does a bunch of other stuff you don’t need. Which one do you pick?

If you have plenty of time for the project, you’d probably wait the 5 weeks and save $600, right? Maybe, maybe not. What if you only had a $1000 left for the project? You’re probably more likely to wait and save the money.

But what if you wanted to finish the project in 2 weeks? Now will you shell out the extra $600? It all depends on how important it is that you finish on time.

Now imagine that it’s not your money. Someone else is picking up the tab. And if you go a little over budget, well, it doesn’t really matter because they somehow always manage to find a little extra money. For important stuff, it’s amazing how much money they can find. Now do you care about spending 4 times as much on a part you need?

Now combine both factors: time pressure and someone else’s money. You’ve just described every IT project inside a big company. You don’t have to guess the result.

Wrong Incentives

You see, the people who run projects in big companies are supposed to care about their budgets. Some of them even do. But most of them are trying to pay their mortgage, or get a promotion, or score points off someone they’ve developed a fierce rivalry with. Sometimes all three. They’re supposed to care about their budgets because they’re supposed to care about the shareholders of the company.

But they don’t. First and foremost, they care about themselves.

And it’s not their money.

But time. That’s something that is important to them. Because if their project is late, they look bad to their boss. They lose points, or lose that promotion. They might just feel bad about not being able to live up to a committment. It’s always their time.

Chargeback Time, Not Money

Chargeback within a company is incredibly hard to do right. It’s usually so full of loopholes and special cases that it ends up punishing the people who follow the process, while rewarding those who take shortcuts. Why? Because shortcuts speed things up. If it ends up costing the company more, who cares? It’s not my money.

So rather than stress about chargeback of dollars, use chargeback of time. Make it more costly in time for someone to do the wrong thing. If you standardise on a particular desktop computer for your workforce, make it fast and easy for people to get. If they want a special, super-duper one that you don’t get a bulk discount on, make it take 2 weeks to get.

I’ve never seen a company do this on purpose. Usually they focus on the dollar cost of the equipment, not the dollar cost of time, because it’s easier. If they end up with a time difference between one option and another, it’s by accident, not design. And given the choice between an easy thing and a hard thing, if no one else is likely to check or care, humans will almost always pick the easy option.

If you want your people to choose the lower cost option for things in their projects, design your systems so they cost less in something your people actually care about.

Their time.

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