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The Hidden Costs of Delay

Did you know that a delay in the delivery of your software product can cost you much more than lost profits? Discover how these "invisible" costs can jeopardize your project and why it's vital to get ahead of it before it's too late.

Published 2025-03-13
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UX Manager working on an application's wireframe
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Darío Macchi
Developer Advocate @Howdy

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    Let’s break it down in simple terms.

    Think of it as the money you’re “losing” by not getting a product into the market right now. Understanding this concept helps companies see how their decisions might affect their profits. Keeping it top of mind can lead to smarter choices, better performance, and ultimately, more money in the bank!

    In this article, we’ll dive deeper into the concept and explain why we believe there are hidden costs tied to it in software engineering.

    Uncovering the Hidden Costs of Delay (CoD)

    Picture two developers talking about the cost of delay in building a particular software product. Here’s how it might go:

    -Clark: “I had this awesome feature that was supposed to be ready by the end of the month. But it actually took me two extra weeks to finish. I keep thinking about how much money my company lost because of that delay.”

    -Rick: “Hmm… let’s see. You need to think about how much profit your company would have made each week once the feature was live. Let’s say it’s around $20,000 per week. With that info, you can easily calculate the cost of that delay!”

    -Clark: “Ah, I get it! The CoD is… over $40,000! That’s crazy!”

    -Rick: “Hold on. Those two extra weeks—did you work for free?”

    -Clark: “What? Haha, no! Of course not.”

    -Rick: “Then you’ve got to add your two weeks of salary to that $40,000!”

    -Clark: “Okay, now I’m really worried because that’s a lot of money!”

    Rick nailed it. And as Johanna Rothman defines it: “It’s the way of thinking about the profit you might lose, plus the cost of ongoing development.”

  1. Why Hitting Feature Release Deadlines Matters in Software Development

    2. Rick looked at this only from a financial angle, but there are plenty more reasons why deadlines are crucial. Broadly speaking, it’s about keeping customers happy, staying ahead of competitors, protecting your reputation, impressing investors… and we’re sure you can think of even more.

    But circling back to Rick’s point—we’ve always wanted to say, “I don’t know, Rick, seems fake.” And finally, we got the chance!

    Well, maybe calling it fake is pushing it, but something deep down tells us that’s not the whole picture. There are more hidden costs when deadlines are missed.

  2. How Delayed Software Projects Really Hit Your Wallet

    3. We’ve seen how development delays can have a direct impact on sales, especially if a product was meant to launch during peak demand. Missing the holiday shopping season, for example, could mean losing huge sales opportunities.

    As the saying goes, “time is money,” and in software development, that couldn’t be more true. Every day your software isn’t in the market is a day it’s not generating revenue—and that adds up quickly.

    Let’s look at three “hidden costs” that sadly came into play because of Clark’s delay. Costs that aren’t always obvious, but are absolutely key to understanding what’s really happening.

    Marketing Costs

    When it comes to delivery and marketing, the two need to be perfectly in sync. Imagine spending tons of resources hyping up new features, only for customers to find out they’re not ready yet. It’s like going to a steakhouse that launches a “special asado night,” only to discover they’ve run out of short ribs. Super disappointing.

    That’s exactly what happened to Clark—his company had to pause the entire marketing campaign that was scheduled for the expected release date.

    And marketing isn’t cheap. Labor, materials, ad spend—the list goes on. When launches are delayed, those costs don’t vanish. They either go to waste or pile up. That means your company’s not only throwing money away, but also facing extra costs to re-launch the campaign later.

    Customers

    We already mentioned disappointed steakhouse diners—and the same thing happens with Clark’s customers. Missed deadlines lead to dissatisfaction and a loss of trust, which also means financial losses. Customers may demand refunds, cancel renewals, or just stop trusting your brand altogether. And once trust is gone, well… good luck earning it back.

    Consistent delays can damage long-term relationships too—not only with customers but also with partners and suppliers. They may start seeing your company as unreliable or risky, demanding upfront payments or even ending contracts. That leaves you scrambling for replacements and facing financial hits.

    And let’s not forget the competition: if a rival launches ahead of you, they can grab customers who could’ve been yours.

    Investors

    Investor trust is also at risk when deliveries are delayed. Investors want to see returns on their money (who doesn’t?), and repeated delays raise red flags about your team’s ability to deliver. That can scare off current investors and keep new ones from coming in.

    Fewer investors = less funding. And less funding often leads to tough calls—like layoffs.

  3. Conclusion

    4. When a developer misses a deadline and a promised feature isn’t delivered, the marketing campaign has to hit pause—and that’s costly. If the feature was already advertised, the problem doubles: not only have you wasted money, but customers are expecting it and will be frustrated when it’s not there. Angry customers are bad for business, and investors tend to steer clear of companies where things seem shaky.

    So, Rick… when Johanna Rothman talks about the “plus the cost of ongoing development” in her definition of Cost of Delay, we believe it includes not just the developer’s salary, but also all these extra “hidden costs” we’ve just unpacked.

Let’s break it down in simple terms.

Think of it as the money you’re “losing” by not getting a product into the market right now. Understanding this concept helps companies see how their decisions might affect their profits. Keeping it top of mind can lead to smarter choices, better performance, and ultimately, more money in the bank!

In this article, we’ll dive deeper into the concept and explain why we believe there are hidden costs tied to it in software engineering.

Uncovering the Hidden Costs of Delay (CoD)

Picture two developers talking about the cost of delay in building a particular software product. Here’s how it might go:

-Clark: “I had this awesome feature that was supposed to be ready by the end of the month. But it actually took me two extra weeks to finish. I keep thinking about how much money my company lost because of that delay.”

-Rick: “Hmm… let’s see. You need to think about how much profit your company would have made each week once the feature was live. Let’s say it’s around $20,000 per week. With that info, you can easily calculate the cost of that delay!”

-Clark: “Ah, I get it! The CoD is… over $40,000! That’s crazy!”

-Rick: “Hold on. Those two extra weeks—did you work for free?”

-Clark: “What? Haha, no! Of course not.”

-Rick: “Then you’ve got to add your two weeks of salary to that $40,000!”

-Clark: “Okay, now I’m really worried because that’s a lot of money!”

Rick nailed it. And as Johanna Rothman defines it: “It’s the way of thinking about the profit you might lose, plus the cost of ongoing development.”

Why Hitting Feature Release Deadlines Matters in Software Development

Rick looked at this only from a financial angle, but there are plenty more reasons why deadlines are crucial. Broadly speaking, it’s about keeping customers happy, staying ahead of competitors, protecting your reputation, impressing investors… and we’re sure you can think of even more.

But circling back to Rick’s point—we’ve always wanted to say, “I don’t know, Rick, seems fake.” And finally, we got the chance!

Well, maybe calling it fake is pushing it, but something deep down tells us that’s not the whole picture. There are more hidden costs when deadlines are missed.

How Delayed Software Projects Really Hit Your Wallet

We’ve seen how development delays can have a direct impact on sales, especially if a product was meant to launch during peak demand. Missing the holiday shopping season, for example, could mean losing huge sales opportunities.

As the saying goes, “time is money,” and in software development, that couldn’t be more true. Every day your software isn’t in the market is a day it’s not generating revenue—and that adds up quickly.

Let’s look at three “hidden costs” that sadly came into play because of Clark’s delay. Costs that aren’t always obvious, but are absolutely key to understanding what’s really happening.

Marketing Costs

When it comes to delivery and marketing, the two need to be perfectly in sync. Imagine spending tons of resources hyping up new features, only for customers to find out they’re not ready yet. It’s like going to a steakhouse that launches a “special asado night,” only to discover they’ve run out of short ribs. Super disappointing.

That’s exactly what happened to Clark—his company had to pause the entire marketing campaign that was scheduled for the expected release date.

And marketing isn’t cheap. Labor, materials, ad spend—the list goes on. When launches are delayed, those costs don’t vanish. They either go to waste or pile up. That means your company’s not only throwing money away, but also facing extra costs to re-launch the campaign later.

Customers

We already mentioned disappointed steakhouse diners—and the same thing happens with Clark’s customers. Missed deadlines lead to dissatisfaction and a loss of trust, which also means financial losses. Customers may demand refunds, cancel renewals, or just stop trusting your brand altogether. And once trust is gone, well… good luck earning it back.

Consistent delays can damage long-term relationships too—not only with customers but also with partners and suppliers. They may start seeing your company as unreliable or risky, demanding upfront payments or even ending contracts. That leaves you scrambling for replacements and facing financial hits.

And let’s not forget the competition: if a rival launches ahead of you, they can grab customers who could’ve been yours.

Investors

Investor trust is also at risk when deliveries are delayed. Investors want to see returns on their money (who doesn’t?), and repeated delays raise red flags about your team’s ability to deliver. That can scare off current investors and keep new ones from coming in.

Fewer investors = less funding. And less funding often leads to tough calls—like layoffs.

Conclusion

When a developer misses a deadline and a promised feature isn’t delivered, the marketing campaign has to hit pause—and that’s costly. If the feature was already advertised, the problem doubles: not only have you wasted money, but customers are expecting it and will be frustrated when it’s not there. Angry customers are bad for business, and investors tend to steer clear of companies where things seem shaky.

So, Rick… when Johanna Rothman talks about the “plus the cost of ongoing development” in her definition of Cost of Delay, we believe it includes not just the developer’s salary, but also all these extra “hidden costs” we’ve just unpacked.