Want to make your operations a priority this quarter?Book a call

Whether a new system streamlines your operations is decided before you build it

A new system streamlines your operations when the work is mapped, the right problems are chosen and the team is ready to use it.

A new system streamlines your operations when it is built well and aimed at the right problem. Most of what decides the outcome happens before the build: mapping how the work runs, choosing the problems worth solving and getting the team ready to use it. The costliest failures are the wrong route: solving the wrong problem, solving the right problem the wrong way, or building something nobody uses. Before you compare quotes, compare how each option would find out that it was on the wrong route.

Most of the risk in a new system sits before the build

Software is getting faster to build. Google says about 75% of its new code is now generated by AI and approved by engineers, up from 50% in the autumn of 2025.1 As code gets faster to produce, more of a project’s outcome depends on the decisions made around it.

Most of the time sat outside the code even before AI. Bain estimates that writing and testing code takes about 25–35% of the time from idea to launch. Teams using AI coding assistants see productivity gains of 10–15%, while some companies report 25–30% by pairing the tools with a redesign of the whole process.2

The build is essential, and it has to be done well. A badly built system fails however carefully it was chosen. In an operations project, the work around the build means understanding how the work really flows, choosing the problems worth solving, redesigning the process, getting the team to adopt the system and measuring what changed. That is the part most companies skip.

A new system’s real cost includes building the wrong thing

Buyers compare fees because fees are visible. The larger costs never appear on the invoice:

  • The wrong problem. The money is spent, and the real bottleneck is still there.
  • The right problem, solved the wrong way. Months of rework follow, and the team learns to work around the system.
  • A system nobody uses. The software is paid for and abandoned.

None of these shows up in a quote. All of them show up in the year after launch.

The odds favor planning slowly and building fast

Bent Flyvbjerg and Dan Gardner drew on a database of more than 16,000 projects for How Big Things Get Done. Only 8.5% came in on budget and on time, and only 0.5%, or 1 in 200, also delivered the benefits promised.3

IT projects miss hardest on value. McKinsey and the University of Oxford studied more than 5,400 IT projects. The large ones, with budgets above $15 million, ran on average 45% over budget and 7% over time, and delivered 56% less value than predicted.4

Exhibit 1Large IT projects fall furthest short on valueAverage overrun or shortfall, IT projects with budgets above $15 million, %
Large IT projects fall furthest short on value
MeasureAverage
Cost over budget45
Time over schedule7
Value below forecast56

Source: McKinsey and the University of Oxford, 20124

The risk also sits in a long tail. Flyvbjerg and Alexander Budzier found that 1 in 6 of the 1,471 IT projects they studied was a “black swan”, with an average cost overrun of 200% and a schedule overrun of almost 70%.5

These studies cover large projects, and none of them looks at operations systems for companies. Use them for the scale of the risk; they cannot forecast a single project. Their shared lesson is Flyvbjerg’s: plan slowly, while change is cheap, then deliver fast.

A requirement that is wrong before building starts gets paid for twice

Barry Boehm and Victor Basili put avoidable rework at 40–50% of the effort on software projects. Two of its main sources are hastily specified requirements and designs that handle only the normal case.6 Every requirement that is wrong when building starts gets paid for twice: once to build it and once to undo it.

The cheapest place to find a wrong requirement is on a screen that is not yet connected to anything. Boehm and Basili note that better systems come from requirements that emerge through prototyping and shared learning. A clickable prototype moves those discoveries to a point where a change costs hours. After launch, the same change costs weeks and some of the team’s trust.

Redesigning the process before automating it multiplies the gain

In 1990, Michael Hammer described how Ford set out to cut the headcount of its accounts-payable department, then more than 500 people, by about 20% with better systems. By redesigning the process itself, it reached a 75% reduction where the new process was in place.7

Exhibit 2Redesigning the process cut Ford's headcount nearly 4 times as much as the planReduction in accounts-payable headcount, %
Redesigning the process cut Ford's headcount nearly 4 times as much as the plan
ApproachReduction
Conventional program (planned)20
Process redesigned (achieved)75

Source: Hammer, Harvard Business Review, 19907

Note: The department had more than 500 people. The 75% applies where Ford put the new process in place.

Automating a broken process makes the mess run faster. Remove the steps that should not exist first. Then automate what is left.

Compare options by how they would find out they are wrong

When you weigh a software subscription, a developer, a consultant and an operations firm, ask each the same question: before I pay for the build, how would you find out that we are solving the wrong problem? A good answer involves your team, a map of the real process and something you can click before code is written. A weak answer is a promise.

Then ask who builds the system and who stays until your team uses it. If the answer is a different firm for each step, every requirement has to survive a handover.

Illustration. Three people each spend eight hours a week retyping information between tools, at a loaded cost of $40 an hour, close to what US employers pay per hour for office staff, wages and benefits included.8 Over 50 working weeks, that comes to $48,000 a year. A build that automates the wrong step of that process can arrive on time and on budget and still leave most of the $48,000 in place. On paper the project succeeded. The cost it was meant to remove is still being paid.

Put a number on that cost for your own process before you compare quotes. It is the figure every option should be measured against.

Try it on your numbers

Step 1 · The work and the team

10

Employees and contractors who spend their time on this process.

$60,000
1.4x

Taxes, benefits, equipment and space on top of salary. 1.3x to 1.5x is typical.

85%

Share of paid time spent on the work, not in meetings, waiting or away.

70%

If the work could take 2 hours and takes 3, the pace is 67%.

80%

Share of work that needs no rework or correction.

2x

Revenue earned per dollar of labor. If $100 of labor brings in $200, enter 2x.

Step 2 · What it costs you

47.6%of paid time becomes finished work, done right the first time.
  1. Paid timeEvery hour you pay for100%
  2. Available for the workMinus meetings, waiting and absence100%
  3. At full paceMinus slow steps and workarounds100%
  4. Right the first timeMinus rework and corrections100%
Cost of lost capacity, per year
$0
Lost share of time × people × salary × cost factor
What that capacity could earn, per year
$0
Cost of lost capacity × return on labor

An estimate from your inputs, not a quote. Not every lost hour can be recovered. The 14-day diagnostic measures where the time goes in your company and which part is worth winning back.

Two weeks spent understanding your operations is the cheapest insurance

A 14-day diagnostic exists to remove as much of the wrong-route risk as possible before the build starts. The problem is chosen with the people who live with it. The fix is tried on screen by the team, as a clickable prototype on its own data. The build is priced on evidence instead of guesses.

The same team then builds the system, trains the people who will use it and measures what changed, so no requirement has to survive a handover between firms.

This is the argument of our manifesto, and it shapes how we work. We would rather tell a client not to build something than build the wrong thing well.

Sources

  1. 1

    Cloud Next '26: Momentum and innovation at Google scale. Sundar Pichai, Google, 2026.

    Sample: Google's own report of the share of its new code that is AI-generated and approved by engineers.

    DirectionalA company describing itself, not independently checked, at a firm with unusual engineering resources. It shows how fast code generation is moving; it says nothing about code quality or about small companies.

  2. 2

    From Pilots to Payoff: Generative AI in Software Development (Technology Report 2025). Bain & Company, 2025.

    Sample: Bain's industry experience, including surveys of developer teams at software-as-a-service companies. No sample size is given for the ranges cited.

    DirectionalA consultancy estimate with no published method, drawn from software companies rather than from operations work. Trust the direction (code is the smaller share of the work); treat the ranges as rough.

  3. 3

    How Big Things Get Done. Bent Flyvbjerg and Dan Gardner, Currency, 2023.

    Sample: Database of more than 16,000 projects of many kinds, mostly large, in 136 countries.

    ModerateThe largest dataset of its kind, but mostly big public and private projects. Good for the base rate of overruns; it cannot forecast one company's system.

  4. 4

    Delivering large-scale IT projects on time, on budget, and on value. Michael Bloch, Sven Blumberg and Jürgen Laartz, McKinsey & Company with the University of Oxford, 2012.

    Sample: More than 5,400 IT projects in the Oxford database as of June 2012. The averages cited are for large projects, with initial budgets above $15 million.

    ModerateA large sample with a sound method, but older, and the averages cover big projects only. Good for the size of the value gap in large IT projects; it does not measure the gap in small ones.

  5. 5

    Why Your IT Project May Be Riskier Than You Think. Bent Flyvbjerg and Alexander Budzier, Harvard Business Review, 2011.

    Sample: 1,471 IT projects, mostly in large public and private organizations.

    ModerateSound method, but large organizations and an older sample. It supports the claim that IT risk sits in a fat tail; it cannot give the odds for one small project.

  6. 6

    Software Defect Reduction Top 10 List. Barry Boehm and Victor R. Basili, IEEE Computer, 2001.

    Sample: The authors' summary of empirical studies of software projects, mostly large systems, from the 1980s and 1990s.

    ModerateRespected researchers and a consistent finding, but an older, expert summary. Good for the rough size of avoidable rework; do not read it as a measurement of any one project.

  7. 7

    Reengineering Work: Don't Automate, Obliterate. Michael Hammer, Harvard Business Review, 1990.

    Sample: One company case, Ford's North American accounts-payable department of more than 500 people.

    DirectionalA single, well-documented case. It shows how much bigger the gain from redesign can be; it does not predict the gain in another company.

  8. 8

    Employer Costs for Employee Compensation, June 2026, Table 4: Private industry workers by occupational and industry group. U.S. Bureau of Labor Statistics, 2026.

    Sample: National Compensation Survey of US private industry employers. Cost per hour worked, wages plus benefits, June 2026.

    StrongA large official survey with a published method. Office and administrative support costs $36.73 an hour and all private industry $46.89, so $40 is a fair middle figure. Your own payroll is still the better number.

Strong
Large or audited sample, published method, and a population close to owner-led companies.
Moderate
Sound method, but a different population, a smaller sample or an older study. Good for direction and rough size.
Directional
Survey, vendor or expert estimate. Trust the direction; treat the exact number as soft.

Written by

Mihkel Sinikas

Mihkel Sinikas

Founder

Spent years in consulting and product development, and helped automate and streamline processes for logistics and professional services companies.

See every essay