Challenges and Typical Model Purposes
The ABC, ABM, TDABC and TBM methodologies are applicable in all industries and besides the industry groups we have specified, we have experiences in News Papers, Road Assistance, Hotels and Rental just to name some. The 4 methodologies, which we refer to as Cost Transparency methodologies, are a way of thinking that can be used for much more then just the traditional profit and costing. Investing in a Cost Transparency Software has other purposes then just satisfying the finance department with a costing model. In In-House Services you can read, that it is applicable in the IT department and other Corporate functions. A model with high details in the activities can support the production in operational and strategic decisions, which you can read in manufacturing but it can be used for resource planning and creation of Budget and Forecasts besides the traditional view of actual costs.
Companies acquires other companies who often use other systems, which makes it challenging to measure performance. With Cost Transparency Software, you can map local data to a group structure and have results consolidated and drill to details and follow cause and effect. Some would claim it is just as easy to introduce a group generic structure in the ERP system for instance, but that is not always a possibility, as some countries are forced to use local chart of accounts defined by national authorities. For instance in Sweden, where companies are forced to use the ”BAS-kontoplan”, which is different from what other Nordic countries would use.
Case example
A SWEDISH SOFTWARE DEVELOPER, who makes software for cars and machines, handle all their work in projects. It is of course important to follow cost spend and estimates very tightly, but used resources and hours are equally important. The more projects they have, the more they can learn from previous projects. We developed a Transparency Model where they could follow each project in real time for costs and time against estimates and milestones so there was an early warning if there was an abnormal trend. When new projects should be created, a copy of a similar projects was made and updated with correct unit costs and deliveries and it was ready to use. The company has over 1,000 employees and project duration is from weeks to months. The system is used to follow-up and give status reports about projects, it is used to have an overview of spend and remains at month and year-end, it is used to resource planning and finally when giving offers.