A cheaper component
The training provider could buy a cheaper case-management service, yet spend more on manual reconciliation, partner charges and support. The financial model needs to show how those costs relate to the service and its intended outcomes.
A Simple Architectural Framework (ASAF) includes Finance as a core aspect. It covers the current financial model, the transformation financial model, the target financial model and continuing financial controls. Architects use these models to understand what must be funded, what it will cost to sustain the service and which assumptions affect a choice.
The financial picture
| View | Questions to retain |
|---|---|
| Current service | What funds the service? What drives revenue, expenditure and demand? Where do refunds, delays or rework create costs? |
| Transformation | What must be spent on design, training, migration, parallel operation and retirement, and when? |
| Target operation | What recurring people, supplier, technology and assurance costs remain? Which vary with use? |
| Benefits | Who receives each benefit, when might it occur, and what would demonstrate it? |
| Control | Who owns the budget, approves commitments, records actual expenditure and decides when assumptions need review? |
Keep cash expenditure, staff capacity and service benefits distinct. Time released from a task may improve service or absorb demand without reducing the payroll. Avoid counting that same time as both a cash saving and extra capacity in one total.
Uncertainty and choice
Compare options over the same period and scope, using a common basis for prices. Record quantities, rates, sources, dates and uncertainty. Include transition and exit costs. Examine what happens if demand, supplier rates, staffing or benefits differ from the estimate. Finance colleagues supply the organisation’s accounting and appraisal rules.
Usage-based hosting, calls to machine-learning models and data transfer make some costs sensitive to usage, retries and retained information. Owned infrastructure also carries capacity, maintenance and replacement costs. Relate either arrangement to the whole service and its support commitments.
Speed and quality
Measure the effort and delay in understanding costs well enough to make a decision, and the rework caused by missing assumptions. Judge the service by affordable operation, realised benefits and the ability to fund maintenance and change. Lower initial expenditure may create a later constraint worth making explicit.
Methodology configuration
Your business case, service budget and investment review may already hold this information. Link their assumptions to the affected architecture decisions. Use Methodology configuration to map terms, records and reviews to your own approach.