Managing Application and Application System Costs
The aim of modeling costs with HOPEX IT Portfolio Management is to be able to compare the cost of different components and to compare the different evolution scenarios on identical financial criteria.
To be able to take account of the time (past and future), the cost of a component is represented by a fixed part and a periodic part.
For example, a purchase price is specified in a fixed part, and annual maintenance in a periodic part.
Finally, costs are characterized by different criteria that enable more detailed comparison. Criteria are:
• the type to distinguish investment costs.
• the nature to isolate costs of infrastructure, license, service or manpower.
• life cycle of the component concerned.
Cost Calculation Principles
Each fixed expense is associated with an amount and a date.
Each periodic expense is associated with an initial amount, a start date, and the amount and periodicity of timespots.
For more details on modeling of costs, see Creating a fixed expense and Modifying a periodic expense.The cost of the object can be calculated in the absolute, or in the context of a portfolio. In the case of a portfolio, sums are calculated between begin date and end date of the portfolio.
We assume for example that retirement of an application starts in July with a decreasing periodic cost. The periodic cost is 500€ and the decreasing cost -100€.
|
Begin Date
|
End date
|
Period cost
|
Total cost obtained
|
|---|---|---|---|
|
7/1/2012
|
30/07/2012
|
500
|
500
|
|
7/1/2012
|
8/1/2012
|
400
|
900
|
|
7/1/2012
|
9/1/2012
|
300
|
1200
|
|
7/1/2012
|
10/1/2012
|
200
|
1400
|
|
7/1/2012
|
11/1/2012
|
100
|
1500
|
|
7/1/2012
|
12/1/2012
|
0
|
1500
|
The cost calculation formula proposed as standard in HOPEX is based on fixed and variable cost characteristics.