Total cost to perform the process group "govern and manage product/service development program" per $1,000 revenue

This measure calculates total cost to perform the process group "govern and manage product/service development program" per $1,000 business entity revenue. Total cost is the sum of personnel (compensation/benefits), systems (direct and/or allocated), overhead (direct and/or allocated), other internal, and outsourced costs. The Process group "govern and manage product/service development program" includes [Supervising the complete product/service program from innovation until its commercial success. Meeting the customer demand and expectations. Conduct further development and innovation pertaining to business goals.]. This Cost Effectiveness measure is intended to help companies understand this cost expenditure related to the process group "Perform governance and program management".

Benchmark Data

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Measure Category:
Cost Effectiveness
Measure Id:
105214
Total Sample Size:
848 All Companies
Performers:
25th
Median
75th
Key Performance
Indicator:
No

Compute this Measure

Units for this measure are dollars.

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(Total cost to perform the function "develop and manage products and services" * Percentage of total cost to perform the function "develop and manage products and services" allocated to the process group "govern and manage product/service development program" * 0.01) / (Total business entity revenue * 0.0010)

Key Terms

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Process Cost Components

Total cost for a process, process group, or function consists of the following five components.

Internal/In-house operating cost consists of the first four components (personnel, systems, overhead, and other).

Personnel Cost

Personnel cost is the cost associated with personnel compensation and fringe benefits of employees (i.e., those classified as FTEs which includes both full-time and salaried/hourly employees) contributing to each respective process. Personnel cost should include all of the following costs.

Employee Compensation: Includes salaries and wages, bonuses, overtime and benefits.

Fringe: Includes contributions made towards the employees' government retirement fund, workers compensation, insurance plans, savings plans, pension funds/retirement plans, and stock purchase plans. This should also include special allowances, such as relocation expenses and car allowances.

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.

Overhead Costs

For the purpose of this study, provide the total actual overhead costs for the year related to the specified process. These are costs that cannot be identified as a direct cost of providing a product or a service. Include the primary allocated costs such as occupancy, facilities, utilities, maintenance costs, and other major costs allocated to the consuming departments. Exclude systems costs that are allocated, since these will be captured separately as systems cost.

Other Cost

Other costs are costs associated with the specified process, but not specifically covered in personnel cost, systems cost, overhead cost and outsourced cost in this questionnaire. These other costs include costs for supplies and office equipment, travel, training and seminars. Include the cost of telephones, except for that portion captured in systems cost.

External/Outsourced Cost

In determining outsourced cost, include the total cost of outsourcing all aspects of the specified process to a third-party supplier. Exclude one-time charges for any type of restructuring or reorganization. Outsourced costs should also include costs for intracompany outsourcing (i.e., reliance on a shared services center or other business entity).

Total Annual Revenue/Net Revenue

Total annual revenue is net proceeds generated from the sale of products or services. This should reflect the selling price less any allowances such as quantity, discounts, rebates and returns. If your business entity is a support unit and therefore does not directly generate revenue, then provide the revenue amount for the units you support. For government/non-profit organizations, please use your non-pass-through budget. For insurance companies the total annual revenue is the total amount of direct written premiums, excluding net investment income. Note: Business entity revenue needs to only include inter-company business segment revenue when the transactions between those business segments are intended to reflect an arm's length transfer price and would therefore meet the regulatory requirements for external revenue reporting.

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.

Measure Scope

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Cross Industry (7.3.0)

  • 2.1.1 - Manage product and service portfolio (10061)
    • 2.1.1.1 - Evaluate performance of existing products/services against market opportunities (10063)
    • 2.1.1.2 - Confirm alignment of product/service concepts with business strategy (10066)
    • 2.1.1.3 - Prioritize and select new product/service concepts (10074)
    • 2.1.1.4 - Plan and develop cost and quality targets (10073)
    • 2.1.1.5 - Specify development timing targets (10075)
    • 2.1.1.6 - Plan for product/service offering modifications (10076)
  • 2.1.2 - Manage product and service life cycle (10067)
    • 2.1.2.1 - Develop plan for new product/service development and introduction/launch (16824)
    • 2.1.2.2 - Introduce new products/services (10077)
    • 2.1.2.3 - Retire outdated products/services (10078)
    • 2.1.2.4 - Identify and refine performance indicators (10079)
    • 2.1.2.5 - Conduct post launch review (11423)
      • 2.1.2.5.1 - Carry out post launch analytics to test the acceptability in the market (19646)
      • 2.1.2.5.2 - Review market performance (11424)
      • 2.1.2.5.3 - Review effectiveness of supply chain and distribution network (11425)
      • 2.1.2.5.4 - Apply data and analytics to review supply chain methodologies (19647)
      • 2.1.2.5.5 - Review quality and performance of the product/service (11426)
      • 2.1.2.5.6 - Conduct financial review (11427)
      • 2.1.2.5.7 - Conduct new product development process assessment (11428)
  • 2.1.3 - Manage patents, copyrights, and regulatory requirements (19985)
    • 2.1.3.1 - Conduct mandatory and elective reviews (19941)
    • 2.1.3.2 - Review infringement of patents and copyrights (16826)
    • 2.1.3.3 - Determine patent and copyright needs (16827)
    • 2.1.3.4 - Define product technical documentation management requirements (19697)
    • 2.1.3.5 - Manage regulatory requirements (12771)
      • 2.1.3.5.1 - Train employees on appropriate regulatory requirements (12772)
      • 2.1.3.5.2 - Maintain records for regulatory agencies (12773)
      • 2.1.3.5.3 - Manage regulatory submission life cycle (12776)
  • 2.1.4 - Manage product and service master data (11740)
    • 2.1.4.1 - Manage materials master lists (11741)
    • 2.1.4.2 - Manage bills of material (11742)
    • 2.1.4.3 - Manage routings (11743)
    • 2.1.4.4 - Manage specifications (11744)
    • 2.1.4.5 - Manage drawings (11745)
    • 2.1.4.6 - Manage product/material classification (11746)
    • 2.1.4.7 - Develop and maintain quality/inspection documents (11747)
    • 2.1.4.8 - Maintain process specification data (11748)
    • 2.1.4.9 - Manage traceability data (11749)
    • 2.1.4.10 - Review and approve data access requests (11750)