Use-case-based procurement, compliance and TCO

Purchase price explains only part of the picture

Talbahn compares two offers. Option A costs less to acquire; option B has lower annual operating costs in this example. The decision also concerns migration, evidence, interfaces, spare parts and later changes.

Total Cost of Ownership (TCO) describes the costs of a solution over a defined scope and period. Included costs must be disclosed. Otherwise a TCO comparison is merely a sum of figures with different boundaries.

Bound the familiar calculation carefully

All values are fictional, in CHF millions. The period is ten years; price changes, financing, taxes and discounting are excluded from this exercise. Discounting would convert future payments to a common present valuation date.

A: 4.0 + 10 × 0.55 + 0.8 = CHF 10.3 million. B: 5.2 + 10 × 0.35 + 0.5 = CHF 9.2 million.

A sensitivity analysis examines how the result responds to changed assumptions. If B incurs an additional CHF 1.4 million, its total rises to CHF 10.6 million. A would then be CHF 0.3 million cheaper. The change in ranking shows which assumption deserves especially close examination before a decision.

Evidence risks belong in the offer

A low price for an unproven function cannot be directly compared with an accepted solution. Talbahn therefore requires the document baseline, implementation, test scope, open points and delivery conditions for each requirement.

Later changes also need an agreed scope: interface access, configuration data, documentation, supported versions and transition services. The word “open” alone does not guarantee an economical supplier change.

Build compliance from the actual need

“Fully FRMCS V3 compliant” leaves delivery scope, document baseline and applicable functions undefined. Sound procurement starts with use cases and then maps applicable specification requirements to them. Mandatory safety, interface and interoperability requirements remain in force. Selecting a use case is not permission to omit such requirements. [S16; S37]

The evidence chain is use case, required function, applicable requirement, implementation, test and acceptance. A successful use-case test does not automatically prove full standards conformity. Conversely, a general conformity statement does not answer every project-specific operational scenario.

The table is a procurement method, not an already completed declaration of conformity. Real projects add actual requirement identifiers. “Not applicable” needs justification; “planned” is not “implemented”, and “tested” is not automatically “accepted”.

Talbahn also requests prerequisites, limitations and outstanding evidence in the offer. Their costs enter the TCO comparison. Otherwise a low purchase price may simply transfer integration effort and risk to the railway.

Check your understanding

B remains cheaper without the additional cost. Why does that not imply an unconditional purchase recommendation?

Model answer

The calculation assesses only the named cost scope. Requirement fulfilment, evidence, migration capability, operations, risks and contractual conditions must also be compared. A technically unsuitable offer does not become suitable through a lower total.

Additional application

Turn “fully V3 compliant” into a verifiable procurement requirement for the mixed call.

Model answer

Name systems, identities, call type, priority and failure cases; assign applicable requirements from specific document editions. Require implementation, test and acceptance evidence for the named combination. Mandatory cross-cutting requirements remain applicable.

What to remember

Costs, capability scope and evidence risks belong in the same decision paper.

Your Talbahn case file

Add the cost comparison and a use-case/requirement/evidence matrix. Record the conditions of your recommendation and the cost ranking reversal. The complete decision paper follows in 3.16.