A working definition
Coordination overhead.
Coordination overhead is the cost of keeping people aligned about work, rather than doing it: the status meetings, the recaps, the hand-offs, the approval chains, and the quiet hours spent reconciling versions of the plan that drifted apart between meetings.
On large software projects it is routinely the biggest line — bigger than the software. It never appears on an invoice under its own name, because it is billed as everyone's time. This page is our attempt to give it a name, a shape, and a price, because it is the thing our whole practice is organised around compressing.
What it looks like from inside
Eleven people, two years, one weekly call.
We sat on the buying side of a large ERP implementation — three of the eleven people below. The project's cost anatomy was people, not licences:
- 2Project managers, one per company, reconciling two versions of the plan.
- 3Full-time staff on scoping, QA and UAT. We were these three.
- 6Directors and executives billing time whether or not the project moves.
- 104Weekly status calls over two years, each one starting with a recap.
Nothing in that list writes software. All of it bills. And none of it is anyone's fault, which is the uncomfortable part — every person in that room was doing their job. The overhead is structural: it comes from the size of the room, not the people in it.
Why it grows faster than teams do
Add a person, multiply the conversations.
Fred Brooks named the mechanism in The Mythical Man-Monthback in 1975, and it has not aged a day: the number of communication channels in a group grows with the square of its size — n(n−1)/2. That is why adding people to a late software project makes it later. The work grows linearly; the aligning grows quadratically.
People in the room
Lines of communication
3
3
5
10
8
28
11
55
Eleven people is fifty-five conversations to keep straight. Three people is three. That single ratio is most of the argument for how we work: a small senior team inside the operation coordinates in hallway sentences, and the fifty-two channels it does not have are fifty-two places a plan cannot drift.
The research says the same thing
The overruns are measured, and they are not small.
Bent Flyvbjerg and Alexander Budzier studied 1,471 IT projects forHarvard Business Review in 2011 and found an average cost overrun of 27% — with the sting in the tail: one project in six became what they called a black swan, overrunning by around 200% on cost and almost 70% on schedule.
A McKinsey–Oxford study the following year put large IT projects at 45% over budget and 7% over time on average, while delivering 56% less value than predicted. Half the budget, in other words, buys something other than the thing that was specified.
Neither study concludes that programmers got slower. The consistent finding is that big rooms, long timelines and drifting specs do the damage — which is precisely the overhead this page names. An eighteen-month build does not merely cost more per month; it ships against an eighteen-month-old spec, aimed at a company that has since changed shape. Compression is an accuracy strategy before it is a cost strategy.
Price your own
The weekly call, as a dollar figure.
The sliders start at the room we sat in. Set them to your project — current or being pitched — and this is what coordinating costs before a single module is configured.
Your numbers
What it computes to
The cost of coordinating, alone
$274,349
Meetings, prep and recap only — before licences, configuration or a line of code.
Person-hours spent in the room
2,286 hrs
4.33 weeks per month. Shrinking this number — smaller room, shorter loop, spec written inside the operation — is the specific thing we sell.
What it is not
The honest boundary.
Coordination overhead is the compressible part of a software project. It is not the whole project. Change management, training, and the data work only your team can do — deciding what a crew-hour really costs, agreeing which customer record is the true one — take the time they take, and no tool changes that.
We say this everywhere because the claim inflation runs the other way across this industry. AI compresses coordination and typing. It does not compress a business deciding what is true. Anyone who tells you otherwise is selling, and will still be invoicing when you find out.
Common questions
Asked and answered.
What is coordination overhead?
Coordination overhead is the cost of keeping people aligned about work rather than doing it: status meetings, recaps, hand-offs, approval chains, and the reconciling of versions that drift apart between meetings. On large software projects it is routinely the biggest cost line — bigger than the software — and it is invisible on invoices because it is billed as time, not as a thing.
Why do ERP and software implementations go over budget?
Mostly because of people-time, not technology. The anatomy we sat inside: eleven people from two companies on a weekly call for two years — two project managers, three full-time staff on scoping, QA and UAT, six directors and executives billing time either way. Research points the same direction: Flyvbjerg and Budzier found IT projects average 27% over budget, with one in six overrunning by around 200%; a McKinsey–Oxford study put large IT projects at 45% over budget while delivering 56% less value than promised.
How do you actually reduce coordination overhead?
Shrink the room and shorten the loop. Communication channels grow with the square of headcount — three people need three lines of communication, eleven need fifty-five — so a small team that works inside the operation coordinates in hallway sentences instead of steering committees. Writing the spec from inside the business, rather than from discovery calls about it, removes the largest single source of rework.
Does compressing a timeline mean cutting corners?
No — compression is an accuracy strategy before it is a cost strategy. An eighteen-month build ships against an eighteen-month-old spec, aimed at a company that has since changed shape. Building in weeks against what is true now removes the guesswork, which is where most of the waste and most of the corner-cutting pressure actually come from.
What does compressing coordination overhead NOT fix?
Change management, training, and the data work only your team can do. Those take the time they take, and a vendor who claims AI compresses them is overclaiming. We state this limit on every page it belongs on, because winning a project we then fail is worse than not winning it.
The next step
One day inside your systems beats six calls about them.
The first day is free and it is not a sales call: real optimisations delivered, the diagnosis in writing, and a fixed-price proposal only if you want the rest built.