Clarify
Nederlands
English
Plan of action part 5
Lifetime costs
Making choices becomes ever easier when we have the right underlying data available. With all the items discussed in the previous parts of our ‘Risk Management Action Plan’, we have a very solid starting position. In part #5 of our series we will discuss life-cycle costs.
We have the following items clearly mapped out:
🔶 frameworks
🔶 desired performance
🔶 period
🔶 risks
🔶 acquisition, management and maintenance costs
With this, Clarify risk management software allows us to determine the technical life-cycle costs, also known as Life Cycle Costs (LCC). Determining the costs makes it possible to work out, for your investments, what the financially most favourable period of use is. Different options can also be placed side by side to find the most suitable one. In doing so we take into account:
🔶 initial investment
🔶 consequential costs based on residual risk
🔶 management costs
🔶 maintenance costs, including replacement of (sub)parts
1. Life-cycle costs
To make the comparison between different options, we use the net present value or equivalent annual costs. This makes financially clear which comparable investment we should make for the various options (see images 2 and 3).
2. Life-cycle cost table
3. LCC comparison
Also when we want to compare options that clearly have a very different service life in duration (see image 4).
4. Comparison of different service lives
We take steps in which risk management contributes optimally to the central goal of the organisation. Thanks to the careful structure and support embedded in Clarify, this becomes ever more conscious and better substantiated. Now we still have to report and present all of that.