Operational Objective: Reduce Cost
The Reduce Cost business improvement dimension for this initial release is focused upon reduction of engineering cost as a practical and directly addressable concern.
Relationships
Main Description

Engineering costs can be measured in budgetary expense or hours of effort and additional costs to sustain the human effort, apply IT and instrumentation to system development and supporting, often external, service and capital costs. Companies typically seek to reduce engineering cost either as an objective in its own right, such as to drive down expense to revenue, or as a way to free up resources to drive growth or innovation.

Engineering cost are typically made up of:

  • Direct and indirect cost of people (fully burdened)
  • Internal overhead and service charges like IT and corporate services e.g. facilities
  • External service provider costs - design house, contractors, training, legal, escrow services
  • External capital costs - IT, technical equipment, tooling

Within the VTT and consideration of Strategies and Solutions the primary cost contributors for systems delivery are :

  • Reduce Engineering cost of direct Systems Engineering and Requirements Engineering effort
  • Reduce Engineering cost of rework across all disciplines
  • Reduce the engineering cost of quality
  • Reduce third party expense e.g. engineering contractor cost

In some cases it is possible to reduce or avoid contract penalties that may result from missed or unfulfilled requirements

Therefore in looking for impact on these cost contributors the Practices, and their supporting tools, provide a means to eliminate or reduce work and unproductive effort hence drive cost. Work being here the useful expenditure of effort. In addition we aim to propose reports, indicators and dashboards that assist the monitoring of effort and its products, via Practice control measures.

The VTT and Practices for Systems Engineering does not directly include the Project Management and Project Accounting practices for measuring cost. Certain of these are available in the base IBM Rational Practices and IBM Cognos Industry Blueprints which can be applied with Rational Insight.