What are our cost drivers?

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The business question What are our cost drivers? looks at the costs of the business capabilities based on the operational expenses of the applications that support them. Review the operating costs to differentiate between critical and standard business capabilities and identify the major cost drivers in the organization. Understand application expenses in the context of their business relevance in order to make sound rationalization and investment decisions.

This business question visualizes data in a treemap report. The visualization shows the top two levels of business capabilities in the business capability hierarchy. The boxes are the second-level business capabilities. The business capabilities that are subordinate to the second-level business capabilities are not displayed in the report but are included in the data source and the calculation of costs.

The business capabilities are colored according to their business relevance. Business capabilities are sized based on their current year costs with the largest boxes indicating the highest expenditure. The Aggregate Costs By filter lets you decide whether to show the operational costs (OpEx) for applications, the capital expenditures (CapEx) based on project costs, or the overall cost including both OpEx and CapEx. The costs are an aggregation of the current year costs associated with the business capability or any of its subordinate business capabilities. The costs are equally distributed across all provided business capabilities.

Point to a business capability to show a tooltip with the following information: Business capability name, current year operational expenditure (OpEx), current year capital expenditures (CapEx), Business Relevance value.

Which business capabilities are the most expensive overall? To understand the overall cost of the business capability including operational expenses and capital expenditures, click the Filter   button and select CapEx & OpEx in the Aggregate Costs By field. The boxes are sized based on the operational expenses and capital expenditures. The largest boxes are the most expensive business capabilities. Recommendation: Review which business capabilities are the most expensive vs. which business capabilities are most relevant for the business. Consider whether investment decisions need to be reassessed.

What are the application costs contributing to the business capability? which applications are candidates for rationalization? Ensure that the report is showing operational consists (OpEx). To do so, click the   

in the Aggregate Costs By field. The boxes are sized based on the operational expenses. The largest boxes are the most expensive business capabilities.

What are the project costs contributing to the business capability? Ensure that the report is showing capital expenditures (CapEx). To do so, click the   button and select CapEx in the Aggregate Costs By field. The boxes are sized based on the capital expenditures. The largest boxes are the most expensive business capabilities.

Which business capabilities are supported by applications that are owned by a specific organization? does the organization own expensive applications? Click the Filter   button and select an organization in the Business Owner field to understand the application costs per business capability where the organization has the role Business Owner for the applications.

Which business capabilities are supported by applications belonging to a specific application portfolio? Click the Filter   button and select an application group in the Application Group field to understand the number of as-is and to-be applications per business capability.

What are the current costs vs. planned costs of the applications supporting the business capabilities? Click the Filter   button and and set Active in the Object State field to understand the current operational expenses of the applications. Next change the Object State field to Plan to understand future application costs for the business capabilities.