Your assumptions, experiments and learnings all help to create a picture of how the future innovation will deliver something of value, a benefit. You will start to form a view of how the business model may work, the net profitability of the future innovation and how much it will cost to create this new outcome. The latter is the investment cost, the cost required to develop and bring the innovation to market; as it is likely to be delivered via a project, it is also known as the project cost.
You can estimate this investment cost on Solverboard and capture any of your cost planning assumptions while supplementing with a more detailed costing spreadsheet if desired.
Solverboard uses the investment cost estimate as a component in the investment appraisal metrics and that in turn, drives your whole portfolio analytics. So even if you capture costs at the simplest level completing this section is part of the key to understanding the value hotspots in your portfolio.
- Go to ‘Explore’ tab and then click ‘Evaluate Results’.
- On the ‘Project Cost’ table select the edit mode.
- Select the start year that the project commences and press the related ‘save’ button.
- Add the number of years that you predict the project duration to be.
- Add any direct project cost description as rows and key in the financial expenditure over your planned project years.
- Add any other associated indirect project costs, for example, insurance or royalties payments.
- Add in an estimate allowance for risk (optional).
- Click on the edit button to save your changes. Note: that the total Project Cost in the red box is the sum of your direct, indirect and risk budget.
- Click on the ‘Cost Commentary’ edit icon. Describe any calculative assumptions you have made in deriving your project cost and any other relevant information. Click on the same edit icon to save your changes.
- ‘Click to upload attachments’ button to attach any supporting information or more detailed costing spreadsheets.
Congratulations, you have now produced your project cost estimate.