What is Demand (xR)? It is a concept where demand is multiplied by the relative value needed.
In many organizations today, when they embark on projects, operations or even process design, demand is in most cases over estimated or underestimated. This leads to bloated costs, over engineered solutions, or the opposite. Either scenario creates business impact ultimately resulting in negative monetary impacts.
It is common for product development strategies to focus on the product, identifying that the business benefit is the key. But if a project costs 400% of the value realized in the business benefit, wouldn’t it be madness to carry on? Simplistic thinking would conclude the value should outweigh or match the cost of such an action.
In many projects, programs, process engineering, support models, and marketing approaches the relative value to complete or carry out the task is missed. It gets marred by other variables, or side requirements. The thinking of the process or product owner is aligned with differing methodologies or principles to that of the other stakeholders.
To explain Demand (xR), an example would be putting up a shelf. Only four screws are needed to put up a shelf, but they can only be bought in packs of fifty. There is no way to buy four screws, so the options are to try and get them made bespoke, which is expensive and not a normal approach, or buy the fifty screws, and put the remaining 46 in a drawer.
The relative demand for putting up the shelf is four screws, it could be pushed to five screws in case one gets lost, but it is not ten or even fifty.
Now let’s apply this concept against a project, the Demand (xR) is used for all aspects, time, resource, cost and knowledge. Companies pay tens of millions to deliver projects, big consultancy houses deploy armies of people, a specialist in this, a support person in that, a manager in something else. The cost then spirals as the demand is not relative, the collective thought process becomes diluted and is no longer relative, the common goal is secondary, so the relative demand becomes zero.
Demand can also be deficit, many organizations love the buzz of innovation, but if innovation is a one-hit-wonder and not sustainable, it loses its buy-in, fails to meet its targets, and in some cases, changes to draconian.