I have discussed the economics of project management numerous times in presentations all over the country, and based on the response to my message, I have to conclude that many people just don’t get it.

Let me again sound the wake-up call with a quote from V. S. Liebhold, co-author of the article “A Profit-Based Model Allowing for Quality Achievement and Manufacturing Process Selection” (Quality Engineering, September 2001).

“One major point has been overlooked in most quality engineering publications: the overriding goal of companies within an industry is the maximization of profit to allow for reinvestment and further growth and profits,” says Liebhold. “Indeed, whereas most research focuses on quality improvement and its related cost, it does not take into account the impact of quality on quantities sold and the sale price. Because the survival and development of a company depends on profit generation, reduction in costs is useless if it is not compared to its direct impact on revenues.”

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