Systems cost to design and develop products/services per project that enters the test market products/services phase

This measure calculates systems cost to design and develop products/services per project that enters the test market products/services phase (in which prototypes are used to assess market potential). The ‘design and develop products/services' phase includes assigning resources to product/service projects; preparing business cases and technical assessments; developing and documenting design specifications; building prototypes; eliminating quality and reliability problems; conducting in-house testing; identifying performance indicators; collaborating with suppliers; and contracting manufacturers. Systems costs include a variety of specific costs related to computer hardware/software, network maintenance, data storage, etc., and all fees paid to full-time, part-time, or temporary employees or independent contractors hired to perform these services. This measure is part of a set of Cost Effectiveness measures that help companies understand all cost expenditures related to the process "design, build, and evaluate products and services."

Benchmark Data

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Measure Category:
Cost Effectiveness
Measure Id:
103253
Total Sample Size:
12 All Companies
Performers:
25th
Median
75th

Compute this Measure

Units for this measure are dollars. Lower values are better.

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Systems cost to design and develop products/services / Number of projects that enter the test market products/services phase

Key Terms

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Systems Cost

Systems costs include all expenses, paid or incurred, in conjunction with:

Computer hardware or computer software acquired by the organization or provided to the organization through service contracts.

Any related costs to process, service and maintain computer hardware or computer software. The costs of providing and maintaining services for each applicable process (e.g., computer system(s) processing (CPU) time, network/system communication charges, maintenance costs for applications and data storage). This includes the costs related to LANs, WANs, etc. This does not include one-time costs for major new systems developments/replacements. Consultant fees should not be included in depreciation of new system implementations. Include only those costs that occur more than six (6) months after implementation, as normal system maintenance costs. Any systems cost (e.g., maintenance) which is outsourced to a third party supplier should be captured in the separate cost category labeled outsourced cost.

Systems cost should include all salaries, overtime, employee benefits, bonuses or fees paid to full-time, part-time or temporary employees or independent contractors who perform services relating to computer hardware, computer software, processing or systems support.

Cost Effectiveness

Cost effectiveness measures are those in which two related variables, one of which is the cost and one of which is the related outcome related to the expenditure are used to determine a particular metric value.

Median

The metric value which represents the 50th percentile of a peer group. This could also be communicated as the metric value where half of the peer group sample shows lower performance than the expressed metric value or half of the peer group sample shows higher performance than the expressed metric value.

Measure Scope

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Cross Industry (6.1.1)

  • 2.2.1.1 - Assign resources to product/service project (10083) - Allocating resources to the design, development, and evaluation of product/service concepts. Allocate funds, personnel, and time for developing the new and/or revised products/services. Begin to design the potential new product/service concepts that have been prioritized and selected for further development.
  • 2.2.1.2 - Prepare high-level business case and technical assessment (10084) - Preparing a business-level business case and a technical feasibility assessment in order to move the product/service projects forward. Weigh the costs and benefits of designing, developing, and evaluating the shortlisted product/service concepts. Prepare a business case to justify the product/service projects. Conduct a technical appraisal to ensure that the organization has the technical know-how and resources to further develop these concepts.
  • 2.2.1.3 - Develop product/service design specifications (10085) - Creating design specifications. Create specifications for the design of new or revised product/service concepts as a measure to meet during development. Have the senior functional-level solutioning or design staff create a framework of compliance standards for these products/services.
  • 2.2.1.4 - Document design specifications (10086) - Documenting requirements to meet in the design of new or revised products/services. Specify technical, quality, and costing requirements, as well as ergonomic, safety, and servicing requirements for such products/services. Ensure the information presented can be understood by the personnel executing the design and includes examples, anecdotal references, and illustrations.
  • 2.2.1.5 - Conduct mandatory and elective external reviews (legal, regulatory, standards, internal) (10087) - Conducting any mandatory and elective appraisals of the product/service design specifications in order to ensure compliance with external standards. Carry out external reviews of specifications created for the development of new product/service designs. Conduct mandatory appraisals such as legal and regulatory, as well as any optional assessments that, for instance, pitch the specifications against industrial benchmarks.
  • 2.2.1.6 - Build prototypes (10088) - Building prototypes for shortlisted product/service concepts. Develop prototypes for those product/service concepts that have been identified for further development. Provide proof-of-concepts, and test any processes involved. Build prototypes in line with the design specifications already outlined. Enlist the solutioning and/or design staff.
  • 2.2.1.7 - Eliminate quality and reliability problems (10089) - Eliminating any problems relating to utility of the product/service over the course of its expected lifetime. Tweak the prototype in order to comply with the required quality and reliability standards. Further refine the prototype, so it may be subjected to testing.
  • 2.2.1.8 - Conduct in-house product/service testing and evaluate feasibility (10090) - Carrying out an in-house appraisal of the prototypes in order to validate design and feasibility. Test the product/service prototypes to confirm their compliance with design and usability standards. Corroborate the viability of the design, and validate the feasibility of their production. Identify any areas for improvement.
  • 2.2.1.9 - Identify design/development performance indicators (10091) - Identifying performance parameters. Determine the parameters to measure performance of the design and development of the product/service concepts into prototypes.
  • 2.2.1.10 - Collaborate on design with suppliers and contract manufacturers (10092) - Interacting with suppliers and manufactures to determine design decisions. Collaborate with vendors, suppliers, contractors, and subcontractors to verify feasibility of co-producing the prototype's design. Ensure that efforts can be coordinated with other stakeholders in the organization's supply chain ecosystem at the time of manufacturing, producing, or packaging the finished product/service.