Yes, if you are currently not using these techniques, costs will go up in the short-term. Naturally, any change program comes at a cost. However, in the mid-term and especially in the longer term these techniques and technologies open up exciting new avenues for many different types of cost savings, including the following:
Acceleration of projects: It is logical to conclude that when a project can be executed in a shorter timeframe, the overhead costs associated with project management will be lower. This is one of the first ways that organizations can see cost savings when switching to Digital Engineering / Concurrent Design.
Reuse of assets and knowledge: In many organizations, projects start from a “zero baseline” where project management and technical teams have to “start from scratch” in the design and planning of implementation of new systems. As has been seen at ESA, planning for a new space mission begins with a rich set of digital models that have evolved over years to capture nearly all of the common elements required to put a capability into space. This gives engineers and other project team members a “70% starting point” from which they can build upon to reach a final high level design. In the Climate Action Center we want to take this concept one step further and freely share our underlying digital models globally, thus resulting in cost savings at a massive scale.
Improved quality: At ESA, a study was conducted that concluded that projects employing Concurrent Design from the outset produce higher quality specifications to be included in public tenders resulting in more than 30% fewer engineering changes after contract award. The significance of this should not be underestimated: engineering changes after contract award incur not only a financial cost (sometimes substantial cost) but also costs in terms of time and quality. By reducing engineering changes after contract award, projects can deliver with lower risk and a higher degree of determinism.
Cost of Risk: Any good project manager knows that it is important to assign a cost to key project risks. As risks materialize in nearly every project, this is a real cost that must be taken into account when estimating project budgets. As was stated in the previous bullet on quality, the use of Digital Engineering / Concurrent Design will result in projects with a lower risk, which will ultimately be reflected in a lower overall risk cost for projects.
Opportunity cost: There are numerous documented cases where projects enter the Concurrent Design process and after closer examination by the multidisciplinary team it is determined that the projects were not required because there were other better ways to address the problem. While some may view cancellation of a project to be a failure, it is actually a great success because it frees up limited human and financial capital to work on other higher priority projects.