An Advanced Dungeons & Dynamics 365 session. Episode 9 of 14.
Previously on: Episode 8, What Feld Knew, Feld admitted he cut sixty percent of the original rebate automation budget eighteen months ago, and let two failed go live attempts pass without ever mentioning it. He asked the party what it would actually cost to do it right this time.
Every project has a number that never got calculated the first time around, because calculating it honestly would have made an uncomfortable decision harder to justify. This episode, the party finally does the math nobody did eighteen months ago.
The Session
Sable: I priced it out. Fully automated rebate accrual, configured correctly against the current contract terms. Here’s the effort estimate.
Feld: And the eighteen months of manual work Oskar’s been doing?
Ai. Cassiopeia: Loaded cost, including error correction and the audit exposure from the suspense account mismatch, comes to roughly four times the automation cost. Over eighteen months.
Marge: So the sixty percent cut didn’t save money. It moved the cost off a project budget line and onto a person’s calendar, where nobody was tracking it.
Feld: (quietly) That’s a hard thing to hear out loud.
Thorne: It’s a common one. Not just here.
Vex: This is the burden rate problem. Everyone compares the sticker price of automation to zero, because the manual work doesn’t show up as a line item. It shows up as somebody’s Tuesday.
Feld: Walk me through the four times number. I want to understand it, not just accept it.
Ai. Cassiopeia: Certainly. Oskar’s estimation time alone, at a conservative hourly rate, accounts for roughly a quarter of the total. The remainder splits between error correction cycles, the audit review now required because of the suspense account mismatch, and the opportunity cost of Oskar’s time not spent on work that was actually his job.
Sable: That last piece is easy to miss. Oskar wasn’t hired to manually reconcile a rebate accrual every month. He was hired for something else entirely. Every hour on this was an hour not spent on the work Contoso actually needed from him.
Feld: (long pause) Nobody put a number on that when I made the cut. I don’t think anyone even thought to ask.
Marge: Most cuts like that don’t get asked. That’s usually the point at which they get approved.
Feld approves the automation on the spot. Oskar, watching from the doorway, doesn’t say anything, but he sits down for the first time in the whole engagement.
The cost that never shows up on a budget line
The sixty percent cut looked like savings because the alternative, eighteen months of Oskar’s labor, never appeared anywhere that got measured against it. That’s the actual mechanism at work here, not bad faith, not incompetence, just an asymmetry in what gets counted. A line item for automation shows up clearly on a project budget, with a number attached and a person accountable for approving it. The cost of not building that automation shows up nowhere, scattered across someone’s calendar in small enough pieces that no single month of it ever looks alarming.
Sable’s point about opportunity cost is the one that usually gets missed entirely, even in a careful accounting. It’s not just that Oskar spent time on manual reconciliation. It’s that that time came from somewhere, from whatever Contoso actually hired him to do, and that displaced work never shows up as a cost either. It just quietly doesn’t happen, or happens later, or happens worse, and nobody connects it back to a budget decision made eighteen months earlier in a different meeting entirely.
This is the same math behind almost every automation decision that gets deferred rather than rejected outright. The sticker price is visible and specific. The cost of the status quo is invisible and diffuse. Comparing a visible number to an invisible one isn’t really a comparison at all, it’s a bias built into how the decision gets framed before anyone even sits down to make it. Feld didn’t make a bad decision eighteen months ago because he did the math wrong. He made it because nobody asked him to do the math at all.
What happens next
With the rebate automation approved, the party finally has room to breathe, three weeks out from go live, only to discover the next problem waiting isn’t in the ledger at all. It’s in the people who are supposed to be running the system come Monday morning, and a readiness assessment is about to reveal that most of them aren’t ready.
Next episode: Episode 10, The Wayfinder’s Gap (coming soon)
This is almost exactly the math behind the AI cost comparison piece Murray wrote on LinkedIn, sticker price versus burden rate, same trap, different technology. Gamifying the Enterprise: Game Mechanics for Continuous Proficiency is available now on Amazon: https://www.amazon.com/dp/B0GY3VWLVX
And if you want a framework for surfacing the real cost of the status quo before it gets buried in someone’s calendar, start here: adnd365.com/start