Impact on Decision-Making
Use total cost of ownership data to inform business decisions, such as decisions to invest in, retire or replace systems, and also decisions relating to budget planning, and evaluation of competing options and business cases.
Improvement Planning
Practices-Outcomes-Metrics (POM)
Representative POMs are described for Impact on Decision-Making at each level of maturity.
- 1Initial
- Practice
- Suggest TCO to stakeholders in cost management.
- Outcome
- Some understanding of TCO potential impact on cost management is emerging.
- 2Basic
- Practice
- Identify opportunities for TCO to enable cost management.
- Outcome
- There is a growing willingness to use TCO to improve cost management.
- Metric
- % of cost opportunities identified using TCO.
- 3Intermediate
- Practice
- Ensure TCO assessments are used to set cost management targets.
- Outcome
- There is increased buy-in to the belief that cost management targets are achievable since they are based on actual data from TCO assessments.
- Metric
- % of cost management initiatives underpinned with data from TCO assessments.
- 4Advanced
- Practice
- Use TCO systematically to set cost management targets.
- Outcome
- Evidence is emerging of effective cost management enabled by TCO.
- Metric
- % cost reduction per year by project.
- 5Optimized
- Practice
- Refine cost management targets with data from TCO assessments on a continuous basis.
- Outcome
- TCO sets appropriate cost structures that optimize overall unit costs.
- Metrics
- % cost reduction by project and area.
- The frequency of cost target refinements.