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Referenced i-plm.net versions 0.8.4

Date August 2010

User & Configuration Guide

Comments and Feedback

i-plm.net is an open source solution based on ARAS Innovator. Please feel free to send comments to us to improve the solution. You can reach i-plm.net support via email [email protected] or please use the online forum on www.i-plm.net.

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Table of Content

1 Introduction ..................................................................................................................................... 3

2 Basic concepts .................................................................................................................................. 4

2.1 Product catalogs ...................................................................................................................... 5

2.2 Cost center related services ..................................................................................................... 5

2.3 Costing and calculation ............................................................................................................ 5

2.4 Financial tracking ..................................................................................................................... 6

3 i-plm.net roles and user model ........................................................................................................ 8

4 Forms - Graphical User Interfaces (GUI) .......................................................................................... 9

4.1 Standard item model ............................................................................................................... 9

4.2 Portfolio Management ........................................................................................................... 11

4.2.1 Services .......................................................................................................................... 11

4.2.2 Customer ........................................................................................................................ 19

4.2.3 Products ......................................................................................................................... 20

4.2.4 Price Units ...................................................................................................................... 23

4.2.5 Product catalog .............................................................................................................. 24

4.2.6 Product groups ............................................................................................................... 25

4.3 Financial Management .......................................................................................................... 27

4.3.1 Cost Center ..................................................................................................................... 27

4.3.2 Cost Driver...................................................................................................................... 28

4.3.3 Work Packages ............................................................................................................... 28

4.3.4 Uplift .............................................................................................................................. 30

4.4 Sourcing ................................................................................................................................. 31

4.4.1 Manufacturer ................................................................................................................. 31

4.4.2 Manufacturer Parts ........................................................................................................ 31

4.4.3 Vendors .......................................................................................................................... 33

4.4.4 Vendor Catalog .............................................................................................................. 34

4.5 Change Management ............................................................................................................. 35

4.5.1 PCN ................................................................................................................................. 35

4.6 Documents ............................................................................................................................. 40

5 Calculation and Pricing ................................................................................................................... 41

5.1 Calculation Model .................................................................................................................. 41

5.2 Pricing Model ......................................................................................................................... 43

6 How to work with i-plm.net ........................................................................................................... 45

6.1 Configuration ......................................................................................................................... 46

6.1.1 Parameters ..................................................................................................................... 46

6.1.2 Identities and roles ........................................................................................................ 47

6.1.3 Type of materials ........................................................................................................... 48

6.1.4 Periods ........................................................................................................................... 49

6.1.5 Structuring elements...................................................................................................... 50

6.2 A general guideline to create a product catalog .................................................................... 51

6.2.1 Set up a manufacturer parts .......................................................................................... 52

6.2.2 Set up a vendor catalog part .......................................................................................... 52

6.2.3 Set up work packages .................................................................................................... 53

6.2.4 Set up a services ............................................................................................................. 54

6.2.5 Assigning price groups ................................................................................................... 56

6.2.6 Set up a products ........................................................................................................... 56

6.2.7 Create a product catalog ................................................................................................ 58

Appendix A Glossary and Terminology.............................................................................................. 60

Appendix B Related Documents ........................................................................................................ 61

Appendix C References ..................................................................................................................... 62

1 Introduction i-plm.net is a solution based on ARAS innovator to manage IT service and products efficiently. This guide helps users to manage services and products related information from initial idea till sun down. i-plm.net introduces best practice of Product Life Cycle Management to IT Services. This helps to provide:

Transparency of services:

• Bill of Materials (BOM )and workload management defines a services coverage to be delivered to customers and cost centers

• Cost unit allocation enables a total cost view per service and by origin of costs • Define and track services levels (SLA’s) as well as operations levels (OLA’s) along the supply

chain

Compliance of services

• Fully compliant transfer pricing management • Share service among several (intercompany) users / and charge by origin

Control and effectiveness

• Definition of key performance indicators as well as quality of services to track and improve services and products

• Increase of service performance by assigning cost and quality target to cost centre responsibility

Risk management

• Consistence between product design and delivery reduces the risk of unexpected costs

2 Basic concepts i-plm.net is designed to support IT service providers to manage activities and information around products and services produced and provided inner and intercompany wide. IT service providers align processes and role models with state of the art frameworks like ITIL and Cobit. But i-plm.net goes a step ahead and adds aspects of Product Life Cycle Management and financial key concepts. At a glance, i-plm.net provides the following functions:

IT Service Management

• Design a value chain within the company • Transform services into products and product catalogues • Define Quality of Services and Key Performance Indicators

Financial Management

• Manage vendor catalogues and maintenance costs • Evaluate and allocate operations cost • Create a Bill of Materials (BOM) • Calculate costs and prices based on transfer pricing rules

Product Information Lifecycle and Workflows

• Enables the life cycle management of services from initial idea to sun down • ITIL compliant role model to assign responsibilities - Collaborate with all stakeholders of the

service management processes

Integration

• Import and create electronic service catalogues (BMEcat compliant) for shopping systems • Integrate sources (ERP, time allocation, accounting, asset management) to track service

performance • Publish product information to portals (MS Sharepoint)

Figure 1 - i-plm.net collaboration model

Product / Service1

Product / Service n

Cost center

Invest

Maintenance

Service (indirect costs / BOM)

Service 1

Service 2

Labor costs

Setup

Incident

Material (direct costs)

Cos

t allo

catio

n

2.1 Product catalogs IT Service Catalogs are state of the art for many providers. Depending on the product portfolio

2.2 Cost center related services Transparency is demonstrated by outlining provided services in terms of content, quality and cost. This can be done within companies from cost center to cost center or between companies providers and users. Basically both relations are based on services requested and delivered no matter of an

Service Level (SL) or an Operations Level Agreement (OLA) is agreed.

To achieve transparency the following basics have to be considered:

1. What are the services offered within the company? 2. What has to offered in terms of quality and

operations level? 3. Who are the customers / users of the services? 4. What are the volumes to be offered 5. What flexibility in terms of volumes as well as other

performance figure a service has to adopt?

6. What risks have to be approached?

A clear definition supports sustainable management and optimization of internal services and by that products of the

company overall.

2.3 Costing and calculation Structuring of calculation approaches leads to several models to be considered. No matter of what calculation models are implemented the integration with the as-is cost and accounting has to be taken into account as well. Otherwise sustainable cost tracking and optimization is impossible. I-plm.net supports cost unit allocation as a key success factor to set-up and leverage shared services among stakeholders.

To enable cost unit allocation constraints of the financial systems (ERP systems) must be considered. For instance it is impossible to implement circuit allocation. So, it is necessary to stage cost centers and organize the allocation bottom up to avoid recurrences / circuits. This limits the reusability of services defined and requires a clear concept what costs and services have to be allocated on what level as well as how to get a complete cost view on a service when I have a limited number of stages available.

Figure 2 Cost center related services / products

Products

Components

PC Phone DMSServer ...

Data CenterStorageDB Base

Operations MonitoringServer

DBServer

BOM

Figure 3 - Cost unit allocation and Cost center staging

For example:

Considering the following principles: A company works with 2 stages of cost centers. The bottom level collects pre built services as well as labor costs related. The top level gathers cost related to products. It is only allowed to charge from the bottom to the top level. Charges within the same level are not allowed.

How to calculate total costs of storage including data center, power if the total cost of data center sqm, racks, power, and direct related operations are located on the same level. The example can be considered for servers used for the monitoring infrastructure of deployment and provisioning infrastructure of databases.

These questions must be answered, before a cost allocation model is designed. It is all about the accuracy of cost calculation and allocation.

2.4 Financial tracking Taking into account a service has a life cycle from the initial idea till sun down, any development starts on high level design and cost views or business cases. Next step get more concrete where a technical design is translated into a Bill of Material which enables the financial calculation. After all design and marketing activities a service goes live and has to be operated. Cost, volume and quality targets have been set up and now these targets have to be tracked.

Prod

uct c

ost c

ente

rsPr

e bu

ilt p

arts

CC

Pre

built

par

ts C

CPr

e bu

ilt p

arts

CC

Pre

built

ser

vice

s /

cost

cen

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Product / Service 1

Product / Service 2

Cost centre 1

Product / Service n

Product / Service 1

Product / Service 2

Cost centre 2

Product / Service n

Service 1

Service 2

Cost centre 1

Service n

Figure 4 Example cost unit allocation

From financial prospective i-plm.net aligns the financial view with the services produced and by that the financial tracking of budgets and especially unit costs.

Typically the financial tracking of unit cost can be done by allocation of total cost and volumes per service and cost center. Unit costs are calculated by division of total cost by volumes. For cost centers providing several services and equivalence number calculation based on the planning figures and as-is volumes helps to calculate unit costs.

From company prospective budget planning works top down while bottom up are results collected. The company budget is divided into tower budgets, depending on the organizational structure. Tower budget can even be product line like. This happens until the products and services are reached to be incorporated in the target setting approach.

Breaking down large budgets into product and services related view enables providers to directly define corrective actions in order to meet defined targets rather than controlling on company level only. Controlling only on company level lacks of control and sustainable service development to ramp up and continuously evolve through the overall life cycle.

Service

Cost per Unit

VolumesBudgets

Planning / Target SettingAs-Is- Cost Controlling

Figure 5 Financial tracking

Tower Budget

Target per Service

Company Budget

Target per ServiceTarget per ServiceTarget per ServiceFigure 6 Budget Hierarchy

3 i-plm.net roles and user model i-plm.net aligns Product Life Cycle Management with ITIL. The roles are implemented as identities. Identities are an item within ARAS Innovator to control permissions of users.

Role / Identity Description

iPLM Test User A test user assigned to several roles and identities to test overall solution functionality.

iPLM Service Manager Service Managers take care of the production services and products. In terms of deviations of volumes or unit costs / budgets Service Managers are in charge of defining corrective actions to product services in quality and costs.

iPLM Senior Product Manager

Senior product manager are in charge of complete service line and can launch and terminate services.

iPLM Purchasing Manager Purchasing managers are in charge of manufacturer materials and vendor catalogs to maintain purchasing conditions.

iPLM Product Manager Product managers are in charge of defining, calculating and changing several services. They have to maintain the services and products to keep the BOM as well as all service related documents up to date.

iPLM Process Manager iPLM Process Manager

iPLM Internal Internal identity for technical uses (lifecycle)

iPLM Delivery Manager iPLM Delivery Manager

iPLM Controller Controllers are in charge of managing cost centers. Controllers are able review services and related documents.

iPLM Business Unit Manager

Business unit managers are owners of cost centers. This managers are tracked against cost targets / budgets.

iPLM All Users All IPLM Users – a group identity covering all i-plm users.

iPLM Admin Admin for the iPLM solution

iPLM Account Manager iPLM Account Manager

4 Forms - Graphical User Interfaces (GUI) ARAS Innovator concept is based on items which represent an entity and its relationships. Each item can be managed by adding, deleting or changing data through its forms. All available forms for users and its role within i-plm.net are available on the workbench.

Figure 7 - Workbench and Forms

4.1 Standard item model i-plm.net defines an item model to store information about products and related services.

Figure 8 - Item model

The major items are:

Item Description

Product Catalog Is a collection of products to be provided to a customer covering information about product number, product name, structure of the product catalog, price unit as well as price.

Products Products are offered to customers. Products are facilitated by services. A collection of services covered by a product is a shopping basket. Otherwise an one to one relation between a service and a product is used to preset services as products.

Customers Customers are debtors of a service provider. Each is described by debtor number to manage financial processes of invoicing and charging.

Services Services are internally produced goods. Services can be assigned to products to be offered to customers or leveraged in a BOM to build new services.

Cost Centers Cost centers allocate services from financial prospective. To produce services, all related costs direct or indirect have to allocated to the cost center to enable financial tracking.

Materials Materials are externally purchased produced by manufacturer and delivered by vendors.

BOM – Bill of Materials A bill of material represents the covered / designed services. This leads to an internal service contract (OLA) between the producer and a user. The produced offers a service for outlined cost and quality.

Work Packages Work packages describe the labor costs assigned directly to a service. Work packages can be drilled down to activities to describe the work

Products

Vendor parts

Substitutes

Cost Centres

Services

Metrics

Run

Change

Materials

BOM

Work packages

Goals

Files

Documents

Services

Product catalogs Customers

package in detail.

Goals / Characteristics Goals and characteristics are key concept of i-plm.net to enhance the cost and volume view on services to a service level and operations level view. This enables providers to document quality criteria effectively.

Documents Documents are and abstract item of i-plm.net. Documents are used to describe a document on meta level within the solution. Documents can cover several files covering the described content of a document. Only documents can be directly attached to services and products.

Files Files are attached to documents and are files from file system like MS Word, MS Excel or PDF files. Files can be checked in or changed in the solution.

Vendors Vendors offer and deliver manufacturer materials / parts.

Manufacturer Manufacturer produce materials.

Vendor Catalog Several materials to be purchased are collected in a vendors catalog. There are contracts / approved catalogs and those catalogs not approved available in the system.

4.2 Portfolio Management Portfolio management covers several items around the design of services and products.

4.2.1 Services Services are the key item to define quality, cost and volumes of a service itself. The input to a service is:

• Materials delivered by vendors • Work Packages (labor expenses) • Other services used by the service • Characteristics • Document of design and delivery

Each service starts its life cycle in a preliminary state where a service can be designed and configured. The main configuration parameters are:

• Type of calculation • Type of charging • Life time of service • Public flag • Cost center to allocate the costs to • Target volumes to be produced • Price group, if a service is offered to customers.

By changing the life cycle state to calculated, i-plm.net calculates the costs and pricing for that service. Following the life cycle the service goes to review state and can be released, changed and moved to ‘Superseded’ state at the end of life.

4.2.1.1 GUI

Figure 9 - Services Overview

Field name Description

ID Provided by the system. Unique number of the service.

Type i-plm.net defines several type of services to enable in depth analysis and adopt the life cycle in accordance.

Materials: Referencing one to one to vendor / manufacturing material

Assemblies: Is defined as collection of materials.

Components: Comprises materials and work packages resulting in a service produced by the provider on its own.

Description Outlines a unique name of the service up to 128 characters.

Long Description Free text. Provides more details about the service.

Cost Center References to the item cost center. A service can be only applied to one cost center, where it is produced.

Type of Calculation Describes how service calculated:

• ABC per unit • ABC total cost • Cost center allocation

For further information please see: Chapter 5.1

Type of Charging A service can be charged recurring or once. So for recurring charges the configuration has to be “Service” for one time charges “Retail” is the choice.

Life Time Defines a life time for the service in moths / years. That’s important to service charged as service, as the life time can be used to depreciate materials and BOM services.

Public Service Defines a service as public from the cost center point of view. A cost center can define internal services and services published to other cost centers. If the cost center concept is not used, all services must be defined as public, otherwise service cannot be added to a BOM.

Period i-plm.net defines planning periods as well as tracking periods. Planning periods are typically applied to services to acquire volumes and costs of the tracking periods. The result can be reported to outline the as-is/ to-be results of the services.

Product Manager References to an identity and calls the product manager in charge of this service.

Valid From Date

Valid To Date

Cost Driver References to a cost driver. To allocate volumes efficiently service should related to cost driver and its source.

Target Volume Defines the target volume for that service. The target volume is used for the calculation to:

• Calculate unit costs for ABC total cost and Cost center allocation based calculations

• In generally cost of work packages are divided by target volumes to calculate unit cost

• Target volumes can be tracked against periods

Volume Base Defines whether a given volume is valid per month / year or defined life time. That’s essential to be considered for the calculation to break down to monthly base as unit costs are always calculated on monthly base.

Cost per Unit Calculated cost per unit. For ‘Service’ calculations this value outlines cost per month. For ‘Retail’ calculation, this filed outlines total cost per unit.

The field is filled by changing the life cycle to state “calculated”

Target Cost per Unit This field can be used to define a target in accordance with the defined calculation parameters. It has no impact on calculation or charging.

Calculation State Outlines whether a calculation is performed successfully. There a 3 values possible:

• Empty – for preliminary stated services • OK – everything is fine • Nok – something went wrong – please see the calculation log • Reset – The calculation was reset by changing the life cycle state

to ‘Preliminary’.

Show Log and Comment Opens a dialog showing the calculation results. Furthermore comments can be given on the dialogs.


ID Service number assigned to the BOM

Description Service description assigned to the BOM

Type of Calculation Referencing to service assigned to the BOM

Calculation State Referencing to service assigned to the BOM

Cost per Unit Referencing to service assigned to the BOM

State Referencing to service assigned to the BOM

Major Revision Referencing to service assigned to the BOM

Public Service Referencing to service assigned to the BOM

Calculation Log Referencing to service assigned to the BOM

Quantity Quantity applied to the service.

Cost Cost calculated by the application

Total Cost per Unit Cost calculated by the application

Figure 10 - Services – Material


Pos This provides a sequence of materials which is used by the service.

Adding multiple materials provides the option to configure alternates replacing the first material. The alternate materials should be equivalent in terms of function, quality and cost.

Please consider that the position having the lowest number is applied for calculation.

Manufacturer Part Number

References to material number of the material. Press F2 to get the vendor catalogs to choose a material.

Part Name References to material description of the material.

Maintenance References to maintenance configuration of the material.

Maintenance Term References to maintenance configuration of the material.

Type References to type of material configuration of the material.

Price Gross Gross price provided by the vendor.

Price Net Net price provided by the vendor.

Total Cost per Unit Calculated by the system.

Figure 11 Services - Work Packages


ID References to the ID of the work package given by the application.

Work Package Name References to the name of the work package given by the application.

Work Package Type Outlines whether a work package is defined as ‘Change’ or ‘Run’ package.

• Run package cover recurring costs • Change Packages occur upon request and are depreciated to

the life time of the service. To align costing and charging, onetime costs (changes like set-up) should charges as those.

Capacity Per Year References to the work package. Defines a capacity in person days per year. This enables the capacity planning to align staff capacities with product calculations.

Daily Rate References to the work package. Defines the average daily rate of this work package.

Quantity Quantity figure must be added manually. This figure describes how many person days (PD) are allocated to that service.

Cost Calculated by the system.

Total Cost per Unit Calculated by the system. Outlines the total cost calculated.

Figure 12 Services - Documents


Document number Unique number of the document. References to the document item.

Name References to the document.

State References to the document.

Major Revision References to the document.

Type of Document References to the document. Like marketing, customer related or technical documents to be assigned.

Figure 13 Services - Uplifts


ID Unique number of the uplift. References to the uplift item.

Description References to the uplift item.

Uplift References to the uplift item.

Focus Uplifts are used to calculate risk or utilization ratios to be incorporated by the cost. Focus is defined as type of costs to be allocated:

• Total costs: Uplift is applied to the total cost calculated. • BOM: Uplift is only applied to the BOM • Material: Uplift is only applied to the Materials • Work packages: Uplift is only applied to the work packages

Figure 14 Services – Pricing


Price Group Unique number of the price group. References to the price group.

Pricing Approach References to the price group. The pricing approach can be overwritten as the price group just provides the default price group. I-plm.net defines several price groups.

Markup Markup given by the price group. This value can be overwritten except for the Cost Plus Approach. Markup is applied to several pricing approaches. Please see pricing approaches.

Decimal Defines the number of digits a price is rounded. E.g. 0 results in a Price rounded to the next whole number. 2 results in a price with 2 decimal places.

Price Calculated by the system.

Remarks Remarks for changes.

Resales Price Outlines the given retail price from the market for the ‘Retail Pricing’ approach.

Figure 15 Service - where used


Number Reference to the services number

Status Reference to the services status

Name Reference to the services name

Revision Reference to the services revision

Release Date Reference to the services release date

Planned Quantity The planned quantity. If a referenced service is calculated per unit, the planned quantity is calculated: target volume times BOM quantity. If the service is calculated as total cost, only BOM quantity is taken into account.

Planned quantity is always outlined per month.

4.2.1.2 Life cycle Services have to follow a life cycle to manage related information from initial idea until sun down. The life cycle is not a like workflow incorporating several parties to contribute to manage information. Typically a workflow controls the information life cycle.

For the item ‘Service’ i-plm.net recommends a simplified approach to release control life cycles. This means that the life cycle status is changed by promoting items in accordance with the permissions and the life cycle model shown in Figure 16.

Figure 16 Service Life Cycle

Figure 17 Changing the life cycle status (promoting) of Services

Status name Description

Preliminary This status is the initiation status. New services or service under construction must be set to this status. After the key data like BOM, work packages, materials, etc. are configured, the service item can be promoted to the next status.

Calculated Moving to the status calculated means that all configuration data are transferred into costs per unit. Items in that status are locked and can’t be changed anymore.

In Review Items ‘In Review’ are checked by the role of a Senior Product Manager. They are in charge of verifying all service related information. In this state other roles like service managers must make sure that the service can be delivered (pre building and configuring infrastructure, ordering processes).

Released Items in the status ‘Released’ are ready to be delivered and operated.

If a service is affected by a change the item should be changed in accordance. For instance a BOM part must be added, etc. So the item must be promoted to ‘Preliminary’ again to re-calculate services, etc.

Changing the state to ‘Preliminary’ results in a new major revision of the item.

In Change In Change means, a service is resigned and will be superseded within a short period of time.

Superseded Superseded services are out of order and are not operated any more.

4.2.1.3 Default permissions The following table shows the default permissions configured in i-plm.net.

Figure 18 Services - default permission

In accordance with the default permissions product managers and senior product managers can add new services.

4.2.1.4 Reports Service BOM Report: Shows a Bill of material with all public and non public services including quantity and costs.

Service Quantity Rollup: Shows all related services and rolls up the quantity along the BOM.

Service Definition Report: Shows all fields and relations of a services as its is configured.

4.2.2 Customer The customer is an optional item to i-plm.net. The main functions to calculate services and manage products work without maintaining customer data.

The customer is required to manage customer related product catalogs in order to facilitate a customer with product allowed or designed to them.

Figure 19 Customer Overview


Customer number The customer or debtor number is a unique number for the customer. The number should be typically delivered by a ERP system in charge of accounting of products.

Customer name A name of the customer

Contact name Name of the contact

Phone Phone number

Fax Fax number

Web Website

Address Invoice address

4.2.3 Products Services are resulting into Products to be offered to the customers. Product turn the company internally production view into outbound products. This is done by adding a material number to be uniquely identified as well as providing marketing name for a service or combine several services into a product to create a shopping basket of related services.

4.2.3.1 GUI

Figure 20 Products Overview


Customer number The customer or debtor number is a unique number for the customer. The number should be typically delivered by a ERP system in charge of accounting of products.

Customer name A name of the customer

Contact name Name of the contact

Figure 21 Product related Documents


Document Number Unique number of the document. References to the item document.

Name Name of the document. References to the item document.

State References to the item document.

Major Revision References to the item document.

Type of Document Describes the type of document to classify or structure the differen documents handled. References to the item document.

Figure 22 Product related PCN's

PCN’s (Product Change Notification) are automatically assigned and displayed as soon as the product is assigned to the PCN. PCN’s are displayed for information only.

4.2.3.2 Life cycle and workflow A product is version able as well as each item goes through a life cycle displayed in Figure 23. The life cycle status cannot be changed manually. Life cycle changes are driven by a PCN (Product Change Notification). A Product attached to a PCN is guided though the whole life cycle and versioning. For further information about the PCN see chapter 4.5.1.

A life cycle managed by the process is always valid for a major release of a product. This means any new major release starts in the status preliminary. The status of the life is subsequently moved in accordance with the PCN status.

Figure 23 Products - Life Cycle

Status Description

Preliminary Initial status for any major release of the product.

In Review The product is reviewed and all related information is verified to be released. The review happens by stakeholders in charge of managed through the PCN process.

Released A product ‘Released’ is in operational state and can be attached to product catalogs and offered to the customers.

In Change A product ‘In Change’ will be either moved to ‘Superseded’ or updated and released under a new major revision.

Superseded A ‘Superseded’ product cannot be part of product catalogs anymore. It is expired.

4.2.3.3 Default Permissions

Figure 24 Products - default permissions

In accordance with the default permissions product managers and senior product managers can add new products.

4.2.4 Price Units Price units are part of the product catalog to outline the price driver for a product offered. It should clearly describe the whether the product is offered per unit, per sqm or per rack unit, per request or what ever. All price units are centrally maintained and can be assigned to the products.

Figure 25 Price Groups Overview


ID Unique number of the price group.

Name Name of the price group

Preferred Pricing Approach

The preferred pricing approach is configured to set default approach overall. The pricing approach can be overwritten in the service. If in a service nothing is configured, the price approach is taken from the price group.

Markup For Cost Plus transfer pricing a markup is required. This field defines the default markup. Again, the markup can be overwritten in the service while configuring the price group in the service.

Source For transfer pricing approaches like resale pricing require a source to be referenced to, where market or resale prices come from. This field is for documentation purposes only.

4.2.5 Product catalog The product catalog is the result of defining and releasing services and products. A product catalog collects all related products to be offered in a comprehensive form. User can configure a product catalog, assign products, customers and documents. A product catalog always references to one price group. If a price group is not configured for a service assigned to a product, the product will not be shown on the product catalog.

4.2.5.1 GUI

Figure 26 Product Catalogs Overview

Figure 27 Product Catalog - Documents

4.2.5.2 Actions To provide product catalogs electronically to customers, i-plm.net creates products catalogs to an excel file. Therefore the action ‘Create Excel File’ creates the catalog. Please click in top menu bar the ‘Action’ menu to start the creation. The product catalog is named by the Product Catalog number.

The file can be opened from the ‘Documents’ tab in the Product Catalog user interface.

Figure 28 Product Catalog File

4.2.6 Product groups Product groups provide a structure of the products offered. Providers can build a hierarchy of product groups to define several levels to group products. Each group starts with a top level root group. A product group can hold several sub groups. Groups can either collect other groups or products. Product Groups containing products can be selected and assigned to products within the Product user interface.

Product group x

Product

Product group 2

Root Product group

Product group 3

Product group 1

Figure 29 Structuring products by product groups

Figure 30 Search for Product Groups

Figure 30 shows an example of product groups and structuring as a hierarchy.

Figure 31 Product Groups


Product Group Number The number is supplied by the system and identifies the product group unique.

Product Group Name A name for the product group.

Description A description of what the product group is for.

Contained Elements Contained elements can be products or product groups. Only product groups marked to contain product can be assigned.

Is Root Outlines whether a product group is the root of the tree.

Upper group References to the upped product group.

4.3 Financial Management

4.3.1 Cost Center Cost centers are items from the financial management systems to gather and allocate costs. To assign services to cost centers enables companies to track BOM and calculated cost against the current state as well as to take corrective actions in order to manage services proactively.

Figure 32 Cost Center overview


Cost Center ID A unique number of the cost center. Typically cost centers information are supplied by the financial systems.

Cost Center Name Name of the cost center.

Description Description of the cost center, what services are gathered.

Valid from Date, Valid from

Valid to Date, Valid from

Type of cost center Typically different cost centers are designed. ‘Product’ cost center gather all product related cost to enable profitability views. Other

‘component’ cost center product pre build components / services before services are used to build product.

Product manager Reference to an identity.

Controller Reference to an identity

4.3.1.1 Reports Cost Center Overview: Shows all relevant fields of the cost center and all assigned services.

4.3.2 Cost Driver Cost drivers are quantities which drive the cost of a service. A cost driver could be valid for several services. Furthermore quantities have to be captured from a unique source, continuously. This is the purpose of cost drivers.

Figure 33 Cost Driver Overview


Cost Driver ID System provided ID of the cost driver.

Cost Driver Name of the cost driver.

Sources Is the source (e.g. application) of the cost driver where the cost drivers is measured.

Product Manager Owner / manager of the quantity

Valid from Date

Valid to Date

4.3.3 Work Packages Work packages cover the cost of labor for service providers. Typically an alignment of labor capacity and product calculation must be performed to discover deviations. The work package capacity is

planned per year in person days. The structure and capacity should be taken as a base to gather as is time booking to track labor capacities.

I-plm.net distinguishes run and change packages. Run packages represent running and recurring costs. Change packages are defines as one time activities like project or initial setup which is depreciated to services with recurring charges. To transform the labor capacity into a monetary view average cost per person day must be configured.

Figure 34 Work Packages Overview


Work Package Class IT providers gather labor expenses on several work packages sometime up to 200 or 300. The work package class structures the large number of packages. Classes can be defined as list items.

ID A unique number of the work package provided by the system.

Work Packages Name A name of the work package

Capacity per year Capacity of the year is person days.

Daily rate Daily rate in local currency. i-plm.net just manages a single currency.

Work Package type Type of work packages are change or run with the following definition:

• Change: Onetime costs like projects or intial setup cost for retail products. For products and services charged recurring (monthly, etc.) change packages are depreciated to the life time of a service.

• Run: recurring costs per year to operate products and services in quality. It is recommended to assign run packages to services with recurring charges (Type of Charging: Service)

Owned by Owner of the package.

Valid from Date of validity

Valid to Date of validity

4.3.4 Uplift Uplifts are corrective to calculations. Sometimes there are costs or allocation approaches which can’t be applied in a Bill of Material or Work Package definition but can be estimated as uplift to discovered cost.

The uplift definition provides transparency of targets and risks incorporated in service.

For example the power consumption of a server is outlined with 500Kwh. Power is purchased for 0,15 Cent per Kwh. Typically the cooling of data center takes about 50% of the power consumption. To calculate the total costs right, either the uplift is defined to the volume or to the cost. No matter of what is decided, a defined an applied uplift in i-plm.net is calculated on top the costs.

Another example is overbooking. A large scale infrastructure is designed for high utilization and charged per assigned capacity per customer. Different loads all over the time frame enable the provider to overbook the real infrastructure capacity by 20%. This leads to negative uplift value of -20% to be defined and applied to calculations.

Figure 35 Uplift Overview


ID Unique number of the uplift, provided by the system.

Description A description to define the purpose.

Uplift Uplift in percent.

4.4 Sourcing Sourcing provides a couple of items to structure incoming or purchased goods and services. These are manufacturers, vendors, materials as well as vendor catalogs. Pricing of purchased goods is delivered by the vendor catalogs. Due to the large scale goods and services a provided acquires, it is recommended to import this data by using the Batch Import tool which only available to subscribers.

Alternatively data can be uploaded by using the Nash script of ARAS Innovator available via:

http://yourserver/InnovatorInstallation/client/scripts/nash.apsx

4.4.1 Manufacturer A manufacturer produces goods no matter of these goods are delivered directly to the provider or via a vendor. This is the original manufacturer. The manufacturer is stored by i-plm.net for information only.

Figure 36 Manufacturer Overview


Name Name of the manufacturer

Contact Name of the contact

Phone Phone

Fax Fax

Address Address

4.4.2 Manufacturer Parts Manufacturer parts are goods and services offered by the manufacturer. As delivery is done by vendors, prices are not stored at the manufacturer part item.

http://yourserver/InnovatorInstallation/client/scripts/nash.apsx

Manufacturer parts are classified as type o material as well as maintenance materials with a defined term. This information is essential as the configuration is required to calculation to depreciate correctly as well as approach the right terms for maintenance costs, if required.

Figure 37 Manufacturer Part Overview


Part number Unique number of the part. This should be typically the number from the financial system where the part is bought from.

Name Name of the part (manufacturer like)

Description Description

Manufacturer Reference to the manufacturer

Type of material Classification of the part. The following items are preconfigured with depreciation terms in accordance with German laws. Please change them to adopt the local laws.

Type of Material Standard Depreciation Client Hardware 3 years Data Center Hardware 8 years External Support 1 year Hardware Rental or Leasing 1 year Mainframe Hardware 6 years Network Hardware 4 years Others 1 month Server Hardware 3 years

Software 3 years Software Rental or Leasing 1 year Storage Hardware 4 years

Maintenance Marks a part as maintenance service. Typically maintenance is contracted 1 to 3 years. Please consider the required configuration of the maintenance term.

Maintenance term Defines the recurrence and term of maintenance cost.

4.4.3 Vendors A vendor is a financially a creditor and should be stored in the financial systems. If a vendor is also a manufacturer, it must be created in both items of i-plm.net.

Figure 38 Vendor Overview


Vendor number Unique number of the vendor. This should be typically the number from the financial system where the vendor is stored.

Name Name of the part (manufacturer like)

Contact Name of the contact

Phone Phone

Address Reference to the manufacturer

Purchasing manager The internally identity to a person acting as purchasing manager. Typically only a purchasing manager should maintain vendor or purchasing data.

4.4.4 Vendor Catalog The vendor catalog unifies three items vendors, manufacturer parts and manufactures. Additionally prices are stored in that item to be integrated into the calculation.

IT providers face a challenge in terms of up to datedness of purchasing data as volatility of conditions is high. Even contracts often reference to currencies like USD which may lead to exchange rate issues.

On the other hand purchases don’t have to be done frequently and ongoing. Purchasing time can by aligned with the demand and price development collecting a significant number of goods to order in large bundles. So, it’s not necessary to update frequently vendor catalog as long as the prices are up to date if a new services and product is set up.

4.4.4.1 GUI

Figure 39 Vendor Catalog Overview


Catalog number A number generated by the system

Catalog name A name for the catalog. To find current parts easily, its is recommended to name catalog by vendor and period, valid for.

Contract Signs the catalog as contract referencing to volumes and contractual amounts. There can be even catalogs not contracted.

Vendor References to a vendor of the materials. Vendors and manufacturers can be different. The vendor can be empty. In this case, the vendor and manufacturer for that part should be the same.

Purchasing manager References to user / identity in charge of the catalog

Valid from Date

Valid to Date

Manufacturer Parts information

Referenced from manufacturer parts

Price Gross Gross price including VAT

Price Net Gross price excluding VAT

4.4.4.2 Default Permissions The default permissions are set in accordance with the figure below. To reduce the risk of mistakes updates should be done by a purchasing managers or automatically using batch loads.

Figure 40 Default Permissions Vendor Catalog

4.5 Change Management

4.5.1 PCN A PCN (Product Change Notification) is a workflow to manage the life cycle of products as well as integrate all stakeholders to plan, review, acknowledge and launch products. PCN’s are created in the PCN GUI but the updating of PCN related activities is done via the ‘In Basket’ of the ARAS Innovator platform.

i-plm.net describes a best practice workflow and related activities as well as identities to operate and release each step of the workflow. This workflow can be easily adopted in accordance with user requirements.

4.5.1.1 GUI

Figure 41 PCN Overview


Number PNC unique number. Provided by the system.

Title A title of the change.

Description A description about the content of the change

Priority A priority valid to the PCN. Currently i-plm.net defines three levels of activities.

• 1 high – product changes urgently requested on the market and by customers. E.g. may be caused by failures and incidents.

• 2 medium – product changes shortly scheduled to improve a product of take corrective actions in accordance with functions guaranteed. E.g. quality of services, etc.

• 3 low – Product changes scheduled to Product Change Board regularly held with customers and stakeholders to discuss and agree a product strategy and implementation.

Customer Approval required

Outlines whether customer have to acknowledge the product changes or not.

Effective date The effective date is set to assigned products after the PCN is successfully implemented.


Action The action defines what happens to the assigned products. i-plm.net defines three types of actions:

• Release - a Product is transformed from ‘Preliminary’ state to ‘Released’ state.

• Change – a new major version of the product is created. The product information can be changed is accordance with the change request.

• Supersede – a product is resigned and moved to ‘Superseded’ state to mark the product as out of order.

Old number Must be added (press F2) for the action ‘Change’ or ‘Supersede’ and references to the product assigned.

Old revision References to the old product.

Interchangeable Outlines whether the old and new product are interchangeable. This is essential for compatibility reasons in terms of configuration.

New Number Must be added (press F2) for the action ‘Release’ references to the product assigned.

New Revision References to the new product.

After application of a PCN, activities are controlled and managed by ‘My Basket’. Stakeholder will receive an item into their basket to take part on the workflow.

Figure 42 PCN Workflow

A click on the item and the menu ‘Update Activity’ will open the dialog shown in Figure 43. There are several options displayed. First of all there are task to be facilitated. I-plm.net defines tasks required and optional tasks. In any case task, can be marked as completed and a vote should be placed to complete the task. Please notice for shared voting, several stakeholders may have the options to reject the vote.

Figure 43 PCN - Update workflow activities

4.5.1.2 Workflow The PCN workflow is a predefined workflow manage changes of products driven by automated processes. ARAS Innovator provides a extensive workflow platform to integrate all stakeholders and track activities along the process.

Figure 44 PCN Workflow


Start The initial state of the PCN

Submit PCN After the initial creation the PCN is submitted to be planned for launch or change. All Planning relevant information should be ready.

PCN Planning PCN planning gathers information about the change relevant activities and plans those. Beside product related information, implementation and delivery related information must be considered.

Update Documents Product information contained have to updated or created:

This are:

• Bill of material • Work package planning • Calculation relevant information • Technical documents • Product descriptions

Review Documents After changing the documents, everything has to be reviewed. There is

an option to reject an approval for corrective actions.

PCB PCB stands for Product Change Board. This is typically a common committee of customers and provider members to discuss and acknowledge product changes. This step waits for the approval of that committee.

PCN Released Final state. The PCN is implemented.

4.6 Documents

Figure 45 Documents Overview


Start The initial state of the PCN

Submit PCN After the initial creation the PCN is submitted to be planned for launch or change. All Planning relevant information should be ready.

PCN Planning PCN planning gathers information about the change relevant activities and plans those. Beside product related information, implementation and delivery related information must be considered.

5 Calculation and Pricing The following chapter describes the basics for calculations and pricing for services and products.

Overall i-plm.net defines services which allocate costs. These costs are direct costs (manufacturer parts), indirect costs (assigned services / BOM) as well as work packages (labor). By defining calculation parameter, the solution calculates a cost per unit.

Using this cost per unit i-plm.net defines a price for services. The solution defines several price groups to apply multiple pricings in accordance with the customer portfolio to be served. Furthermore several standard pricing approaches are implemented to

Figure 46 Costing and Pricing Model

5.1 Calculation Model i-plm.net implements several calculation models to provide and transparent and flexible way to allocate costs to services. This requires sever parameters to be considered.

Some general principles for the calculation are:

• Type of calculation applies to services only • Type of calculation can’t be changed over life of parts • All related costs (materials, (assigned) services and work packages (labor) are incorporated in

the calculation • Calculations are based on the current state of all assigned assets and labor cost. For example,

a change of a contract and a price for a material does not affect the calculation until an owner changes the calculation.

• Investments of materials are depreciated either by regulatory rules (driven by type of materials) or by users specifications, options:

Transfer pricing methods accepted by the German tax law

CUPComparable Uncontrolled Price

Cost Plus Resales Pricing TNMMTransactional Net Margin Method

Profit Split

To be considered

Costing

Pricing

• Direct cost per unit• Client / server / mainframe

investments and maintenance

ABC – per unit ABC total cost Cost center allocation

Dire

ct c

osts

Indi

rect

cos

tsLa

bor

cost

• Direct total costs• Number of servers• Number of software

licenses

• Import of direct costs from the ERP system (e.g. SAP)

Parts (preliminary)- Data center- LAN- Systems management- Shared infrastructure

Operational Expenses- Project cost- Incident- Changes

Total Cost per Unit

Cal

cula

tion

+ Overhead + Markup

Cost Plus Price per Unit

Total Cost

Volume

+ Overhead + Markup


Total Cost

Volume

+ Overhead + Markup


+

+

=/

=

Total Cost per Unit Total Cost per UnitTotal Cost per Unit+=

o Depreciation by individual runtime/usage o Life time taken from service o Investments / retail services are not depreciated and are calculated to a one time fee

• Assigned services are allocated by their outlined costing (one time as well as recurring)

Calculation parameters Descriptions

Type of calculation i-plm.net provides three types of calculations:

ABC per unit

• All materials (investments and maintenance), parts and labor costs are allocated to outline the cost of a single unit of service

• ABC unit based parts can only be charged by the unit / cost driver

ABC total costs

• All materials (investments and maintenance), parts and labor costs are allocated to outline the total costs of the service

• Cost per unit are calculated by total cost divided by the designated / planned volume of the assigned cost driver

• ABC total cost based parts can be charged by the unit / cost driver or a ratio of total costs

Cost center allocations

• Direct costs (typically represented by materials) are taken from the cost allocation of the cost center

• Those cost center can just hold a single service • Cost per unit are calculated by total cost divided by the

designated / planned volume of the assigned cost driver • Cost center based parts can be charged by the unit /

cost driver or a ratio of total costs

Type of charging i-plm.net distinguishes two types of charging. Charging references to retail products and services – charged one time as well as to recurring fees, charged ongoing for defined contract duration.

Service:

• Ownership of assets lies at the customer • Service provider resells assets in conjunction with

optional operational services (maintenance) • Recurring fees like power for data centre services is not

part of the service

Retail:

• Service providers operate services / products on a daily

base • Service providers own assets and provide products full

service • Calculation results in – mainly - recurring fees • Some cost may result in a onetime fee, e.g. for

provisioning • Service fees / costs are calculated on a monthly base • Investments are depreciated either to parts life cycle or

individual configuration • Vendor / OEM maintenance is incorporated as required

Life time Defines the life time for services. For services offered as ‘Retail’ life time can be applied as depreciation. The life time provides an indication of how long the currently configured service is operated.

Public service This flag outlines services as public from the assigned cost center. A cost center can define services which apply internally only. If the cost center concept is not used, services must be marked as public, otherwise services cannot be assigned to each other (BOM).

The following table provides some recommendations how to apply the different calculation models and options.

5.2 Pricing Model The pricing model implements approaches to meet transfer pricing rules as well as individual pricing to calculate prices in accordance with market and customers demands.

Currently i-plm.net implements the following approaches.

Calculation parameters Descriptions

Cost Plus Cost plus is the standard approach.

Additionally to the calculate costs overhead costs and mark up (both as a defined ratio/percentage) is calculated on top to define a price.

For non transfer pricing bound providers/services mark up can be configured individually.

Resale Pricing Works backwards from a price by subtracting an appropriate margin from a sales price.

References to source where the price is coming from.

Comparability of cost (calculation) and price can be done.

CUP (Controlled Uncomparable Pricing)

Compares a controlled with an uncontrolled transaction, comparability is achieved when there are no differences in between the two transaction or no impact on material

For differences a reasonable adjustment can be made

CUP Pricing references to a source, adjustments must be documented.

Individual Individual pricing provides the option to add prices as required without calculation bottom up from costs, etc.

6 How to work with i-plm.net This chapter provides recommendations to be considered to work with i-plm.net. i-plm.net is a solution to manage product related data.

Figure 47 Product related data

To get that managed the production view must be structured into reusable components or so called services to leverage those components across the product portfolio. It easy to generate a large number of those services which have to concurrently managed, tracked and optimized. Some of the key questions are the added value of those services.

If a service is defined but it’s difficult to explain the content and value, it should be revised. Furthermore the efforts of producing and managing of those services have to be considered. If revenue and cost are not in target, think about options to refine or resource those. At the end of the day a thousand services do not help to control a company if these cannot be measured and reported.

Another aspect of PLM in generally is the integration view. To fulfill task around product management successfully and efficient several sources have to connected as well as results have to shared among stakeholders to leverage the results produced.

Figure 48 Integration view

Sources and applications to be integrated are:

Application Information received / provided

Operational expenses Providing new work packages defined with capacities

Gathering information about as-is booking of work packages.

Asset management Get current technical volumes of available assets like licenses and hardware to align current state asset portfolio with product and service configuration.

Finance and controlling Receive cost centers to be configured to produce services

Receive current state cost per cost center

Purchasing Gather current state vendor catalogs

Shopping Provide shopping baskets and products to be offered as well as relationship in between

Accounting Apply for new materials to be offered to customers

Provide an consistent price list per customer

Further applications can benefit from i-plm.net. For example IT Change control system can leverage BOM to achieve consistency of materials implemented and designed.

6.1 Configuration Upfront the start a couple of base data have to be configured. All this described activities can be only done with administration permissions. So make sure that the user has sufficient permissions. Its is recommended to use the standard iplm_admin user having the default password ‘innovator’.

6.1.1 Parameters The following table outline parameters of i-plm.net which can be configured to customize the application. Parameters are implemented in ARAS Innovator as variables. In the ‘Administration’ menu the item ‘Variables’ can be found and changed as required.

Figure 49 Changing variables to configure the application

Variable name Description / value options

IPLM_VENDORPRICECALCTYPE The parameter allows to change between gross and net prices allocated to a calculation of a service. Due to tax laws some providers are not allowed to request VAT refund. Those should calculate using gross prices from vendors.

Options: [GROSS | NET]

GROSS: Uses gross prices of vendors to calculate service costs.

NET: Uses the net price of vendors to calculate services costs.

If the field is empty the calculation uses net prices.

6.1.2 Identities and roles i-plm.net comes with several standard ITIL like roles so called identities in ARAS Innovator. To use these identities, users have to be set up and assigned to the roles. To assign users to roles, its identity has to be used as ARAS Innovator creates an identity for each user.

Another standard user available is ‘iplm_test’. That’s a user to test use cases equipped with typical permission of product manager or senior product manager to create and release products and services. Its default password is ‘innovator’ as well.

To set up a new user, please choose the item user from the Administration menu on the left. The Administration menu is only available to users with administration permissions.

A dialog opens where all necessary information can be added. Please save the item and close the dialog.

Figure 50 Set up a new user

Go to the identities menu and choose the now available identity having the same name as the login of the user.

Figure 51 Assigning users to roles

Opening a role like shown in Figure 51 provides the option to add users or better its identities to the members list.

6.1.3 Type of materials Types of materials are essential to calculations. That’s why it should be configured in accordance of type of materials required as well as legal rules about depreciation.

To configure type of materials please open from the ‘Administration menu’.

In generally for type of materials the basic principle ‘reduce to max’ should be applied. Defining a large number of does not help to assign and apply the item to manufacturer parts.

Type of materials consists of a simple name and standard depreciations to be configured from months to several years. Type of materials should be aligned with legal rules for depreciation. This enables the analysis between cash flows and calculation results, where may different using timeframes are applied. For commodities like power a type of material with 1 month depreciation should be set up.

6.1.4 Periods Periods are the base for planning and tracking cycles. Typically planning periods are defined on a yearly base. This means that service are recalculated and adopted in terms of target costs and

volumes and resulting budgets. Tracking could be configured monthly, quarterly or mid year. I-plm.net comes along with yearly planning cycle and monthly tracking configuration. This can be adopted in accordance.

Tracking periods can be defined and assigned to the planning periods.

Figure 52 Type of materials

Figure 53 Periods - Planning and Tracking

6.1.5 Structuring elements

6.1.5.1 Work packages classes Work packages classes are available to structure the potentially large number of work packages. Work packages classes are implemented as List in i-plm.net. Configuration can be done choosing the ‘Administration’ section of the left and the ‘List’ item below. The item is called ‘iplm_CostCenterType’

Figure 54 Work Package Class

6.1.5.2 Type of documents Type of document provides an option to classify the large number of documents. Different types of documents like product catalogs, technical descriptions, and product descriptions are stored. Classification support faster discovery. The item is implemented as ‘List’ so called ‘iplm_Type_Of_Document’.

Figure 55 Type of documents

6.1.5.3 Type of cost centers Type of cost centers is a structuring element. Furthermore cost unit allocation requires a staging of cost centers to allocate costs from level to level up to the products. If i-plm.net is used to support cost unit allocation, the level has to be considered in the naming. The List item is called iplm_CostCenterType.

Figure 56 Type of cost centers

6.2 A general guideline to create a product catalog This chapter gives further recommendations about the way of working with i-plm.net. Furthermore a demo database is available as database dump to demonstrate the options of managing product data along its life cycle. The demo database is based on IT infrastructure examples. In generally the concept can be applied to any service organization.

The following steps describe an example of a simple Web application server. The server in generally consists of:

• Server Hardware (e.g. an Intel based HP Server DL380 24 GB RAM) • Data center rack space and power (2 rack units, ~500 Kwh) • Linux OS (Redhat) • Operations related to the Server hardware and operating system • Webapplication server license (IBM Websphere Network Deployment) • Operations related to the web application server

The example is simplified as several services like provisioning and deployment get it more complex.

6.2.1 Set up a manufacturer parts First of all let’s get started bottom up and create some Materials. For the described configuration a number of hardware parts are required like a chassis, I/O Kits, RAM, Disks, etc. Furthermore software components like the Linux server is required. Therefore we can use a open source distribution but acquire a maintenance contract from a vendor. Software for the web application server is used from IBM.

Figure 57 Manufacturer Parts - Example HP DL 380

Figure 58 Manufacturer Parts - Example Webapplication Software

6.2.2 Set up a vendor catalog part To equip the created manufacturer parts with purchasing prices, a vendor catalog must be set up.

All require manufacturer parts should be assigned and a net / gross price is entered. The example shows the maintenance contract for 1 to 2 CPU server for Redhat Linux. The item is configured as software / maintenance – with a recurrence of 3 years.

Figure 59 Vendor catalog - Example

6.2.3 Set up work packages As described work packages cover the labor expenses. For work packages the same reduce to max principles can be applied as to other elements. Something which cannot be measured sufficiently cannot be controlled. Please take into account a person in a business unit may book its expenses to may 5 to 10 packages with sufficient accuracy. For more details, the accuracy gets poor. To analysis more details other approaches should be applied. To allocate the operations expenses to services this must be sufficient.

For products charged as recurring service, most expenses should come from the Run packages. If a product covers a high ratio of onetime change expenses, the cost allocation will derive significantly as change expenses are depreciated to the life time of the service. It is recommended to offer those expenses to the customers on a project base.

Please consider the daily rate of the work packages as well as the capacity planned in person days per year.

Figure 60 Work Packages - Example

6.2.4 Set up a services Services are classified as materials / assemblies and components. Materials and assemblies are equivalents to manufacturer parts as components cover materials as well as labor costs resulting in new service produced by the provider.

Materials / assemblies

To work with materials in BOM’s a material must have an equivalent service configured. It is recommended to configure investment goods initially as retail calculation. Maintenance contracts and cost should be initially as Service (Type of Charging) configured. Both materials are ABC per unit calculated as this is completely transparent in terms of covered services and in terms of quantity calculated to a single unit.

Materials cannot be configured with a quantity in the material tab. The material tab provides the option to add alternative materials. Only the first one with the lowest positions number (see the orange ellipse in Figure 61) is taken into account for calculation but alternative materials provide the option to exchange materials by others. This provides more flexibility during implementation as long as form, fit, function and price are match.

Figure 61 Service configured for a material

Components

Components are configured from BOM and work packages. Materials are allowed but should be covered by designated services.

Figure 62 Service - component example

The outlined service component stands for the operational part of the web application server. It covers a work package with a capacity of 800 days, 750 Euros per day and a basic monitoring service in the BOM to adopt the monitoring infrastructure. Other calculation parameters are:

• Type of calculation: ABC per Unit - the BOM is configured for 1 unit output. • Type of charging: Service – the operations service is charged per month recurring. • The designated life time is 4 years. • The service is public – it can be used by other cost centers as well. • Target Volumes: 3600 per year – mean 300 per month. The work package costs are related to

these 3600 units per year.

The overall calculation results into 226,89 Euro per month. The ratio of the BOM is about 60 Euros remaining cost come from the labor part.

Figure 63 Overall BOM of the server

After configuring all the components a service can be designed to build a server covering the above mentioned service coverage.

6.2.5 Assigning price groups At the service concurrently to the costing a pricing is configured. The example shows two prices groups. The first one is defined as Cost Plus Approach adding a mark-up to the calculated costs and rounding to two digits.

The second price group is a resale price approach calculation backwards from a given market price.

In that example the market price is 3000 Euro. A mark-up of 5% is discounted to calculate a reasonable transfer price.

Figure 64 Price Group Example

The bottom up cost calculation based on Cost Plus results in 2471 Euro per month. Market price is 2850 Euro. That’s the base for a prices list using one of configured price groups.

6.2.6 Set up a products Products act as cover for services. To be offered to customers a material number must be applied, significant name has to be given, etc.

Figure 65 Product Example

The significant difference to services is, that products are outbound to a company and should be strictly controlled. So to release or change products a PCN (Product Change Notification) is required.

Figure 66 PCN Example

The PCN incorporates are designated stakeholders to provide a vote and signoff activities to be performed before the service is launched. The PCN controls the life cycle state of the product from preliminary to released. After all the PCN is closed and the product is ready to be offered or must be adopted in accordance with the requirements.

6.2.7 Create a product catalog The product catalog is a collection several products offered to customer. Together with other documents like product descriptions and service level agreements is provides a full picture of the service portfolio to the customer.

The Excel Product Catalog is produced by starting the action ‘Create Excel Catalog’. I-plm.net produces a complete MS Excel product catalog. The file cannot be changed anymore only re-creation is possible. The file can be view or downloaded for further changes.

Figure 67 Product Catalog Example

Appendix A Glossary and Terminology

Term Description

Manufacturer Parts Manufacturer parts are externally sourced and purchased and delivered by vendors.

Manufacturer Parts can be goods (hardware, software, etc.) as well as services like maintenance.

Product A product is something offered to customer. A product is defined by a name, a price unit, charging term and a price. Product groups structure the products.

Service A service is internally offered and produced by cost centers. All costs BOM and labor are allocated to cost centers to track performance and quality.

Cost Centers Cost centers produce and provide services. To track cost centers current costs can be tracked against calculated cost. This provides a sustainable view of performance per cost center.

Calculation A calculation evaluates costs of a BOM, materials and work packages and transfers this in to costs per unit and month.

Pricing Based on a ‘to be defined pricing approach’ a price for services is calculated. Pricing is applied to services. By assigning services to products. The price is applied to the product. If a shopping basket covering more than one service is configured. The total of all assigned services is calculated as product pricing.

Appendix B Related Documents Document Source

i-plm.net Installation Guide.pdf www.i-plm.net

Appendix C References As i-plm.net is based on the ARAS Innovator further information can be found on www.aras.com.

To install a copy of i-plm.net it is always required to install ARAS Innovator. To run ARAS Innovator a license key has to applied at ARAS. This is provided free of charge.

Further components required are Microsoft Windows (Server / Client) and appropriate hardware as well as Microsoft MS SQL Server and Microsoft IIS or Personal Server. Further information can be found on www.microsoft.com.

http://www.aras.com

http://www.microsoft.com