The Planning Break-Even Point: When More Planning Stops Paying Off
How much effort should a project invest in planning? Too little causes rework, while too much wastes resources. This paper develops a quantitative model to identify the optimal balance, incorporating diminishing returns to derive the optimal planning effort and its limits. Two illustrative cases, a software development project and an electrical substation, use deterministic calculations, sensitivity analysis and Monte Carlo simulation. Results show that optimal planning represents 7% to 10% of baseline effort, reducing labour costs by 7% to 11%, while excessive planning can destroy value.