3 years, 7 months ago

The architecture of cost

Link: http://www.etc-architect.com/?p=849

Costs are described as part of an activity or as common costs not specific to an activity. The goal of any commercial architecture is to reduce costs. You may argue we should focus on quality instead of costs, but quality is never costs neutral and as such cost efficiency must be part of any quality. Now to design cost reduction there are two very different ways to do so. The operational cost saving is to reduce costs without destroying any key feature of the service or product. With some cost reductions such as to cut red tape cost reductions can actually even lead to an improvement.

The second way to reduce costs is the strategic way that is more tricky as we first need to invest to get a cost saving.The main problem here is that the cost savings are often build on non verifiable models that take a long time to materialise. In architecture we have seen in the last 30 years that if an idea takes longer than 2 years to actually produce cost savings (such as many EAI projects) it is a good bet that there no cost reductions, but usually the onsite. The same applies for many ERP system implementations. So today even strategic  ways to reduce costs need to delivered in an agile way to quickly show cost reductions.

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