Activity Based Costing within a collaborative estimating framework
This presentation is the property of its rightful owner.
Sponsored Links
1 / 22

FASTER DECISIONS. BETTER DECISIONS.  PowerPoint PPT Presentation


  • 40 Views
  • Uploaded on
  • Presentation posted in: General

Activity Based Costing within a collaborative estimating framework Association of Cost Engineers 17 th February 2 00 4 Grahame Jones, UK Manager, PRICE Systems Tel. 01256 760012 [email protected] FASTER DECISIONS. BETTER DECISIONS. . Top level Flow Diagram.

Download Presentation

FASTER DECISIONS. BETTER DECISIONS. 

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Faster decisions better decisions

Activity Based Costing within a collaborative estimating frameworkAssociation of Cost Engineers17th February 2004Grahame Jones, UK Manager, PRICE Systems Tel. 01256 760012 [email protected]

FASTER DECISIONS. BETTER DECISIONS.


Top level flow diagram

Top level Flow Diagram

Request for services

Delivery of output

Pre

-

request

Request

Production

Post Delivery

Post Delivery

activities

assessment

of service

activities

-

activities

-

activities

activities

External

Internal

Customer information feedback

Management information feedback


Pre request activities

Pre-request activities

  • Pre-request activities are of a strategic nature dealing with the organisation of the department to ensure that when a request for services is received that appropriate resources are available in terms of staff, information, tools and funds.

  • At this stage the activities are speculative in nature as the precise details of the services to be delivered are not defined.


Request assessment

Request Assessment

  • Request Assessment activities firm up on the details of the activities in the previous stage. These activities refine our understanding of the customers’ requirement and start to clarify the approach to be adopted.

  • During this Request Assessment a Manager takes control of the task and is delegated the resources to enable the task to be progressed in a timely manner and efficiently.


Production of service

Production of Service

  • Production of Service leads to and includes production of the required Cost Estimate.

  • The appropriate tools, skills and resources are utilised to ensure that the Cost Estimate is realistic and also acquires commitment from all functions.


Post delivery activities external

Post Delivery Activities (External)

  • Post Delivery Activities cover external customer feedback.

  • Ensures that the organisation captures any follow-on work which results from the immediate task

  • Obtain a critique of the service provided so that improvements can be made in future work.


Post delivery activities internal

Post Delivery Activities (Internal)

  • Post Delivery Activities (Internal) are the final part of the process and cover closing out the work.

  • The aim is to provide feedback of task management information. The time from beginning to end may be many months or years and it is important to capture experiences which would assist in future work.


Collaboration definitions

Collaboration Definitions

  • R = Responsible

    • Many people

    • Work, reports or data required

  • A = Accountable

    • One person

    • "The buck stops here!"

  • C = Consulted

    • Two way communication

    • Positive input, ideas or thoughts

  • I = Informed

    • One way communication

    • Supplied with output


Collaboration matrix

Collaboration Matrix


Cost framework

Products, Services or Customers

ActivityDriver

ResourceDriver

Cost

Objects

Resources

Activities

How it was spent

The work that is done. Activities consume Resources.

What was spent

Anything that you spend money on in performing an activity

What was produced

The reason for performing activity

Activity Drivers are used to trace the consumption of Activities by your Product/Services.

Resource Drivers are used to trace the Resources to Activities.

Cost Framework


Communicating complex relationships

£/€

£/€

£/€

. . .

Resource Expenses

Resource Expenses

Resource Expenses

1

2

N

Resource Cost Drivers

Activity

1

Activity

2

Activity

3

. . .

Activity

X

Activity Cost Drivers

Cost Objects:

Products, Services, and Customers

Direct Materials Direct Labor

Communicating Complex Relationships


Multi dimensional views

Time

Department

Resources

Activities

Customers

Products / Services

Multi-Dimensional Views

  • Views

  • Productivity

  • Capacity

  • Time to Market

  • Quality

  • Revenue

  • Cost

  • Profitability


Proposed planning framework

Proposed Planning Framework

Planner

Analyst

  • Project estimator

  • Collaboration center

  • What-if/scenario modeler

  • Customized report generator

  • Resource capacity analyzer

  • Model builder

  • CER editor

  • External CER integrator


Analyst the construction zone

Analyst - the construction zone

Framework

Planner

Analyst

  • Build custom cost models

    • Parametric

    • Bottom-up/grass root

  • Incorporate commercial cost models

  • Customize commercial models to specific industries

  • Wizards and pre-defined cost variables ease the process of building and maintaining cost models

  • Familiar, activity based terminology


Planner the estimation zone

Framework

Planner

Analyst

Planner - the estimation zone

  • Use custom and commercial cost models in an integrated environment

    • Parametric

    • Bottom-up/grass root

  • Use built-in costing features

    • Cost escalation

    • Risk analysis

    • Resource capacity analysis

    • What-if analysis

    • Calibration

    • Audit trail maintenance


An analogy

An analogy

Think of the framework as a video games console and the cost models as video game cartridges.

  • Commercial Cost Models

  • ProjectCost Model

  • In-house Cost Model

Cost Model X


A framework implementation

Cost Objects

Outputs

View - Product Breakdown Structure

- Work Breakdown Structure

- Organisation Breakdown Structure

Inputs

A Framework Implementation


Framework abc multiple views

View - Product Breakdown Structure

- Work Breakdown Structure

- Organisation Breakdown Structure

Framework – ABC Multiple Views


Framework abc multiple views1

View - Product Breakdown Structure

- Work Breakdown Structure

- Organisation Breakdown Structure

Framework – ABC Multiple Views


Example an it project cost

Example – An IT project cost


Collaborative estimating framework where is the value

Collaborative Estimating Frameworkwhere is the value?

  • Cost Engineers working together in a culture of collaboration.

  • Cost Engineers using a standard estimating framework with bespoke cost estimating relationships

  • Cost experts contributing their expertise for their part of the system estimate.

  • Cost outputs shared with relevant disciplines across an organisation.

  • Cost engineers, finance, senior management saving time through collaboration.


Collaborative estimating framework where is the value1

Collaborative Estimating Frameworkwhere is the value?

  • Cost models from different sources can take advantage of working in the same workspace, rolling up costs, highlighting inter-dependencies, using the same tools, risk, economics, reporting…

    Any Questions?


  • Login