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WP 2.4 – Support to the Development of Cost Models
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Aim
The aim of this work package is to develop a TIMPA Cost Model that allows the forecasting of whole life costs for systems that plan to take advantage of future TI, and compare them with 'traditional' systems |
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Approach
Cost models are an important part of Phase 2, and are needed to inform and justify a number of key decisions related to Procurement and Acquisition of complex systems. Pricing and Forecasting Group (PFG) have a central role in providing accepted cost models across MOD. As such, this work package will make extensive use of PFG staff and modelling expertise, whilst drawing on best-of-breed industry cost models. The work package will also draw on the TIMPA team for their experience in analysing and modelling complex systems, and to provide the necessary insight and information related to TI.
This work package comprises three parts:
- investigation and advice as to how model development can occur
- development of a TIMPA Cost Model
- advice on linking cost and capability in future models.
Investigation and Advice as to how Model Development can Occur
TIMPA will investigate and provide advice and support to the Customer on how the development of a suitable Whole Life Cost (WLC) modelling tool can occur. In particular, TIMPA will ensure that the main cost impacts of TI activities are highlighted for inclusion with the cost modelling tools. These include:
- the cost modelling implications associated with various system acquisition strategies ('lifecycles'), especially the difference between systems designed to be upgraded and those that are not. This includes the cost and benefits of 'receptivity' features. The Dstl work on 'short lifetime' (i.e. non-upgradeable) systems will also be included;
- the different procurement approaches possible, and the different levels of risk and cost associated with each. The cost (and cost risk) impact of stepwise (‘incremental’ and ‘evolutionary’) approaches will be highlighted as being of particular significance. This is linked with the point above, since the acquisition strategy impacts procurement.
This part of the work package will deliver TI, 'lifecycle' and cost modelling advice and support to PFG and third party cost model suppliers to ensure, as far as possible, that the aims and experience of TIMPA are reflected in the cost modelling tools. This element of the WP will culminate with the demonstration of a 'Proof of Concept' cost model based on commercial off-the-shelf (COTS) whole life cost modelling tools being used to demonstrate WLC implications of TI on a representative System.
Development of a TIMPA Cost Model
Having produced a 'Proof of Concept' model, this element of the work package aims to further develop the model to address any identified shortcomings, such that it meets the needs of the Customer and user communities. The applicability and flexibility of the tool will be demonstrated by applying it to a number of representative systems from a variety of domains (Land, Sea, Air, Comms/IT, ISTAR, etc.)
This will necessarily involve a large amount of data gathering and interaction with various stakeholders, as well as considerable effort in producing holistic system-wide cost models. PFG will take a central role with the modelling of the various systems, with support from the TIMPA team and the COTS tool supplier to ensure that all identified shortcomings have been identified, and that the tools are delivering what is really required by the Customer.
Linking Cost and Capability in Future Models
Although the modelling aspects of this overall work package will focus on cost (and perhaps schedule), considering cost alone is too narrow. 'Capability' must also be addressed so that cost-effectiveness becomes the focus. The work package will explore how including capability or effectiveness can best be achieved in (potential) future modelling activities.
This part of the work package will deliver a section in the final report on how the cost modelling activity may best be integrated with capability/effectiveness assessment to generate cost-effectiveness data. |
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Exploitation
In addition to providing feedback to customers, this work will be exploited with the DIS Pathfinders (SAVC and S2C2) and other acquisition projects such as JDN, FRC and SUAV(E). |
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Links
The outputs from this work package will support the development of comprehensive guidance on Flexible/Adaptable systems. (WP 2.3) |
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