Economics, not pricing – Economics

It is important to switch the thinking from what the cost is for assembled technical answers and move to using economic data as an integral part of the solution design process. Today, we go through the design process four or five times, first for assembling a reasonably correct technical answer then pulling it apart in layers, trying to back down to something that is within economic reach yet in a technically desired direction.

If we switch that model and move to looking at designing with economics from the very beginning, we can eliminate nearly all recirculating effort as designs are built then redesigned in the current process. It is also important to keep in mind that much of the technical detail affects implementation details more than it does strategy or economics. If it does not materially affect strategy or dramatically change economics, move on to implementation discussions after confirming a solution strategy and economic direction. If showstoppers rise during implementation conversations, you are still money and time ahead, able to switch directions as needed since you have not done the four or five rounds in traditional processes:

The perfect technical solutions are sometimes unaffordable or miss the strategy. Low-cost solutions may not balance with technical requirements or introduce too much risk. All factors must balance for successful solution design.