methodatlas
Method guideDelivery

Cost of Delay

A practical method guide: clarify prerequisites and materials, understand the complete process, and look up outputs, pitfalls, and stop criteria.

ComplexityHigh
Time90-180 min
Participants3-8
FormatWorkshop
MaturityEstablished
Plan Cost of Delay
01

Prerequisite

What needs to be finished first

Complete firstBounded subject

The scope and purpose of Cost of Delay are stated as a concrete question.

Without scope, Cost of Delay profile becomes arbitrary.
Complete firstAccess to relevant perspectives

Options and delivery windows, Value or loss drivers, Contract and deadline data and domain decision makers are available.

Without these perspectives, central claims in Cost of Delay profile remain unsupported.
02

Preparation

What needs to be ready before start

Materials

Options and delivery windows, Value or loss drivers, Contract and deadline data, shared workspace, source links, and decision log.

People / roles

Product/business · Finance · Sales/Operations · Delivery

Pre-read

Collect Options and delivery windows, Value or loss drivers, Contract and deadline data in advance and mark open assumptions.

Time needed

45–75 minutes

Setup

Prepare a time-dependent delay-cost profile with unit, range, and critical dates visibly and calibrate assessment terms before starting.

03

Core question

The one question this method answers

What value is lost per week of delay, what is the loss profile, and which assumptions support the estimate?

04

Flow

Phases with goal, actions, output and pitfall

Cost of Delay is a time-dependent loss, not a generic business-value score. Profile, unit, horizon, assumptions, and range must remain visible.

Cost of Delay profile

Fictional worked example

a time-dependent delay-cost profile with unit, range, and critical dates as a precise working structure with a fictional example.

Cost of Delay profile
OptionOption and effectProfileCoD per timeAssumptionsDecision
Contract reportingWorked exampleContract reporting avoids service credits.Fixed-date from 1 October.€18k/week; €15–22k.Contract clause; full rollout at delivery.Reporting first if delivery slips beyond 1 October.

  1. 1. Option and effect

    Contract reporting
    Contract reporting avoids service credits.

  2. 2. Profile

    Contract reporting
    Fixed-date from 1 October.

  3. 3. CoD per time

    Contract reporting
    €18k/week; €15–22k.

  4. 4. Assumptions

    Contract reporting
    Contract clause; full rollout at delivery.

  5. 5. Decision

    Contract reporting
    Reporting first if delivery slips beyond 1 October.

The example demonstrates the domain logic of Cost of Delay; worksheets remain blank.

Reinertsen: Principles of Product Development Flow

  1. 1

    Frame loss

    Frame loss

    Goal

    Produce loss hypothesis so the core question “What value is lost per week of delay, what is the loss profile, and which assumptions support the estimate?” can be answered with stronger support.

    Inputs for this step

    • Options and delivery windows
    • Value or loss drivers
    • Contract and deadline data

    Actions

    • Bound option, beneficiary, loss mechanism, and time unit.
    • Record source, rationale, and open uncertainty directly in loss hypothesis.

    Output

    loss hypothesis

    loss hypothesis · source · uncertainty · next decision

    Quality check

    Is the path from delay to loss traceable?

    Pitfall

    Relative points are treated as money or a fixed-date profile is flattened into a line. Make unit, horizon, profile shape, and range explicit; remain qualitative when evidence is missing.

    Timing: 10–20 minutes

  2. 2

    Model profile

    Model profile

    Goal

    Produce CoD profile so the core question “What value is lost per week of delay, what is the loss profile, and which assumptions support the estimate?” can be answered with stronger support.

    Inputs for this step

    • loss hypothesis
    • Value or loss drivers
    • Contract and deadline data

    Actions

    • Model linear, fixed-date, or expedited loss with deadlines and horizon.
    • Record source, rationale, and open uncertainty directly in CoD profile.

    Output

    CoD profile

    CoD profile · source · uncertainty · next decision

    Quality check

    Does the shape fit contract, demand, or risk?

    Pitfall

    Relative points are treated as money or a fixed-date profile is flattened into a line. Make unit, horizon, profile shape, and range explicit; remain qualitative when evidence is missing.

    Timing: 10–20 minutes

  3. 3

    Estimate range

    Estimate range

    Goal

    Produce CoD range so the core question “What value is lost per week of delay, what is the loss profile, and which assumptions support the estimate?” can be answered with stronger support.

    Inputs for this step

    • CoD profile
    • Value or loss drivers
    • Contract and deadline data

    Actions

    • Estimate drivers, unit, base value, and range per time unit.
    • Record source, rationale, and open uncertainty directly in CoD range.

    Output

    CoD range

    CoD range · source · uncertainty · next decision

    Quality check

    Are assumptions and uncertainty visible beside the value?

    Pitfall

    Relative points are treated as money or a fixed-date profile is flattened into a line. Make unit, horizon, profile shape, and range explicit; remain qualitative when evidence is missing.

    Timing: 10–20 minutes

  4. 4

    Sequence options

    Sequence options

    Goal

    Produce sequence decision so the core question “What value is lost per week of delay, what is the loss profile, and which assumptions support the estimate?” can be answered with stronger support.

    Inputs for this step

    • CoD range
    • Value or loss drivers
    • Contract and deadline data

    Actions

    • Compare profiles over the actual delivery window and justify sequence.
    • Record source, rationale, and open uncertainty directly in sequence decision.

    Output

    sequence decision

    sequence decision · source · uncertainty · next decision

    Quality check

    Was loss considered over the relevant delay duration?

    Pitfall

    Relative points are treated as money or a fixed-date profile is flattened into a line. Make unit, horizon, profile shape, and range explicit; remain qualitative when evidence is missing.

    Timing: 10–20 minutes

05

Artifact

What comes out at the end

Sketch: what the artifact looks like

Cost of Delay · Wertverlust pro Zeit sichtbar machenInitiativen nach entgangenem Wert, Verzögerungsprofil und Dauer vergleichen, um eine wirtschaftliche Sequenz abzuleiten
Cost of DelayDas Visual zeigt Initiativen, deren entgangener Wert pro Zeiteinheit mit der Bearbeitungsdauer verrechnet und daraus eine wirtschaftliche Reihenfolge abgeleitet wird.Verzögerung als wirtschaftlichen Verlust sichtbar machenCost of Delay vergleicht Optionen nicht nur nach Aufwand, sondern nach verlorenem Wert pro Zeiteinheit.InitiativenWerttypen und ZeitabhängigkeitklärenCost of Delay BoardInitiativeCoDDauerCoD/DauerA Marktfenster90/Woche4 Wochen22,5B Risiko senken50/Woche2 Wochen25,0C Effizienz35/Woche5 Wochen7,0SequenzCoD ÷ Dauer ergibt PrioritätNächstes zuersthöchster Wertverlust proZeiteinheitWertverlust pro Zeitschätzenwirtschaftlichsortierennicht Aufwand alleinpriorisieren
Form

Versioned Cost of Delay profile with date, sources, owners, and next review.

Versioning / ownership

Retain date, source, assumption state, and decision for every version of Cost of Delay profile.

Tool alternatives
  • Cost of Delay profile as board or document
  • Source and evidence register
  • Decision and action log

cost-of-delay-working-template.md

Plan Cost of Delay around its domain steps and the concrete decision question.

Cost of Delay: Worksheet

Question

To be confirmed

Desired outcome

To be confirmed

Scope

Full workshop Time: 45–75 minutes

Complete this worksheet on paper or in your own document during the work.

Preparation for this scope

Method setup

  • Materials: Options and delivery windows, Value or loss drivers, Contract and deadline data, shared workspace, source links, and decision log.
  • Roles: Product/business · Finance · Sales/Operations · Delivery
  • Advance information: Collect Options and delivery windows, Value or loss drivers, Contract and deadline data in advance and mark open assumptions.
  • Overall time needed: 45–75 minutes
  • Setup: Prepare a time-dependent delay-cost profile with unit, range, and critical dates visibly and calibrate assessment terms before starting.

Prepare for the work steps

Frame loss: Frame loss

  • Options and delivery windows
  • Value or loss drivers
  • Contract and deadline data

Model profile: Model profile

  • loss hypothesis
  • Value or loss drivers
  • Contract and deadline data

Estimate range: Estimate range

  • CoD profile
  • Value or loss drivers
  • Contract and deadline data

Sequence options: Sequence options

  • CoD range
  • Value or loss drivers
  • Contract and deadline data

Cost of Delay profile

OptionOption · beneficiary · loss pathShape · deadline · horizonUnit · base · rangeSource · uncertainty · dependencyDelivery window · cumulative loss · sequence
Contract reporting
  • Contract reporting: Worked example

Enter only real input, sources, and decisions.

Reinertsen: Principles of Product Development Flow

Frame loss: Frame loss

Expected artifact: loss hypothesis

loss hypothesis · source · uncertainty · next decision

Entry:

...

  • Is the path from delay to loss traceable?

Model profile: Model profile

Expected artifact: CoD profile

CoD profile · source · uncertainty · next decision

Entry:

...

  • Does the shape fit contract, demand, or risk?

Estimate range: Estimate range

Expected artifact: CoD range

CoD range · source · uncertainty · next decision

Entry:

...

  • Are assumptions and uncertainty visible beside the value?

Sequence options: Sequence options

Expected artifact: sequence decision

sequence decision · source · uncertainty · next decision

Entry:

...

  • Was loss considered over the relevant delay duration?

Open questions and next steps

...

Method guide: https://methodatlas.meierhoff-systems.de/en/methods/cost-of-delay/run-sheet

06

Example output

Concrete filled scenario, fictional example

Fictional example for orientation. Counts and timings describe this case and are not universal requirements.

cost-of-delay-beispiel.md

Concrete filled scenario, fictional example

Fictional example: contract reporting must be available by 1 October. Delay after that date costs €18k service credits per week, range €15–22k. Onboarding loses €4–7k per week linearly. Sequence depends on the actual delivery window relative to the deadline.

07

Pitfalls

Recognize symptoms and steer against them

Quick overview, the full text is in the matching phase in the flow

  1. Frame lossRelative points are treated as money or a fixed-date profile is flattened into a line.View in phase
  2. Model profileRelative points are treated as money or a fixed-date profile is flattened into a line.View in phase
  3. Estimate rangeRelative points are treated as money or a fixed-date profile is flattened into a line.View in phase
  4. Sequence optionsRelative points are treated as money or a fixed-date profile is flattened into a line.View in phase
08

Stop criteria

When to pause, resolve prerequisites, or choose another approach

Cost of Delay profile answers the core question with traceable evidence or explicitly marked uncertainty.
Owners, next actions, and review dates are named for open points.

Where to go next?

A paper-based illustration representing WSJF with its core stages and visible working result.
Agile
WSJF

Uses the cost-of-delay profile as the numerator for WSJF prioritization.

Paper illustration of a MoSCoW board with four columns and a visible release boundary.
Delivery
MoSCoW

Uses the economic ranking as the basis for a negotiable release cut.

View in playbookClarify Prioritization and RoadmapMove from many initiatives to transparent order, scope, and explicit trade-offs.

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