To cost an elephant: an exploratory survey on cost estimating practice in the light of product-service-systems

Businesses now contracting for availability are regarded as part of a paradigm shift away from the familiar ‘product and support’ business model. The main difference being that such businesses eventually commit to provide a service outcome via Product-Service-System (PSS). The research presented in this paper investigates how current cost estimating practice relates with the idea of having as the point of focus for the analysis a PSS delivering service outcomes, rather than a product. Since the topic is in its infancy, an exploratory survey was designed and circulated via the Internet amongst practitioners with the aim of looking for initial patterns, ideas and hypotheses, rather than to confirm existing ones. The picture that seems to emerge is that respondents would not necessarily see the representation and modeling of a PSS as being a precondition to estimate the cost of the service it provides. In line with most academic literature, respondents would rather consider the cost of providing a service via PSS as conceptually equivalent to the cost of the in-service stage of a durable product. Although now allowing for generalization, this research reveals paths that may be worth exploring further.