Calculate service unit cost and price

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◆ Applies to: Planning with Service Demand Planning. The tasks below require you to license Service Demand Planning then Edit the Company Profile to enable Service Demand Planning features.

NOTE: The Service Demand Planning module is no longer available from Apptio. The information below is provided for the benefit of current users of Service Demand Planning.

Calculate the unit cost and unit price of your service using the Service Pricing view. Service Pricing displays the service or services in your plan and their unit price. See Manage Service reference data. Calculating the unit price triggers the system to generate indirect financials based on the current service price list. Calculating the unit cost determines the price if dynamic pricing is used.

  1. This feature requires Service Demand Planning. Edit the Company Profile to enable Service Demand Planning features.
  2. In the Plan menu, select a plan.

    Learn more about the plan menus

  3. In the Plan section menu, select Services.
  4. In the Plan sub-section menu, select a Service or Service group.
  5. On the Component menu, select Planning. See Navigate in Apptio planning applications. > Service Pricing. The following columns are available:
    • Service Category - Displays the service categories representing the hierarchical structure.
    • Service - Displays the name of the service.
    • Pricing Method - Determines the method used to price your service. This column is only visible if the Pricing Model is set to Dynamic in the Company Profile. The following two methods are available:
      • Fixed Pricing - Uses the unit price to define the amount to charge. Note that if the method is set to Fixed Pricing, the Price cell for the service is editable.
      • Dynamic Pricing - Dynamically calculates the unit price based on the service's cost composition and demand.
    • Consumer Price Group - Appears for tiered categories of a service, such as Internal or External. This column is only visible if the Pricing Model is set to Tiered in the Company Profile. TIP: Group the Service column to view tiered prices together.
    • Currency - This column is only visible when multiple-currency support is enabled.
    • Price - Determines the amount to charge when using a Business Unit. Expand the Price column to show all time periods, including months, quarters, and fiscal year totals for the plan. The periodic values can be edited to modify prices per time period.
    • Unit Cost - The outlay expected to be incurred when producing a single unit of a product or service.
    • Variance - Displays the percentage difference between the variance of the cost over the price.
  6. Click Actions and select from the following:
    • Compute Unit Cost - Service Demand Planning pulls information from your indirect costs and direct costs, along with your predefined pricing strategy to calculate the unit cost. The Compute Unit Cost action is available when viewing All Services in the Plan Sub-section menu. The Unit Cost column displays the calculated unit cost.
    • Publish Price - Generates indirect financials based on the current service price list.

TIPS:

  • The Service Pricing view and the Incoming Demand view determine the charges for your service. View these charges and service revenue on the Ledger page.
  • After you set the unit cost, navigate to the Ledger page and group the Account Expense column by CapEx and OpEx. The OpEx values change to reflect the unit cost computation.
  • After you publish the unit price, navigate to the Ledger page and group the Transaction Type Expense column by direct, indirect, and charges. The indirect values change to reflect the unit price computation.