To go beyond standard purchasing approaches, IT Design To Cost enables you to implement a new kind of relationship with your suppliers. This will allow a shift from a price driven relation to a mutual understanding of costs inductors.
This approach applies to all sorts of projects, whether development, software integration or version upgrades, application or infrastructure maintenance projects.
Working together with the suppliers and integrating all parties in the early phases of the project, “IT Design to Cost” enables researching the maximum potential between costs, value and risks, and yields project cycle time reduction.
An approach derived from value engineering
The value engineering principles, defined in 1947, are at the source of the “Design to Cost” approach. These principles have been extensively implemented within companies for products and services offerings. The value engineering enables to move from a cost (and value) breakdown perspective into a functional vision..
Understanding the suppliers’ cost structure: costing
In order to complete the functional cost allocation, it is important to understand how costs are induced, taking into account purchases and outsourced costs. This approach allows to change the customer / supplier relationship.
Using costs as a management tool
In the course of a “Design To Cost” project, decisions are being made using the cost structure as a basis. Three different yet complementary axes have to be considered and analyzed:
- Standard approach: using a cost vision by technical item.
- Value engineering: functional costs allocation.
- Systemic costs vision, enabling to highlight relations and interdependencies between the subsystems. The global optimum rarely corresponds to the sum of local optimums.
Amadeus, GDF-SUEZ, Telintrans, TOTAL