Indirect versus direct cost metrics
When developing unit metrics for a service, it is important to consider both indirect cost metrics (which refer to the costs incurred prior to production) and direct cost metrics (which are incurred during production). Indirect cost metrics include costs associated with research and development (R&D), marketing, and other non-production expenses. Direct cost metrics, on the other hand, include costs associated with cloud resources, labor, and other expenses that are directly tied to the production of the service.
Choosing the appropriate cost metrics to measure can depend on the specific goals of the organization. For example, a company that is focused on improving its overall profitability may want to focus on reducing indirect costs to improve its margins. Alternatively, a company that is seeking to improve the quality of its services may want to focus on reducing direct costs and improving the efficiency of its production processes.
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