costing services of a large and complex organisation with minimal management overhead vlad fridkin...
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Costing Services Of A Large And Complex Organisation
with minimal management overheadVlad Fridkin CCEA
Manager Costing Services, CIOG|COO|CFO
What is Large?
Large Company(ASIC)
CIOG
What is Complex?
Corporate Apps
Communication
App Hosting
Operation Support
End-user Services
Military/Logistic Apps
SS
CC
Value chains
SS
CCStructures
Measures
Costed Services?
Not Costed Costed!
2D
End User DevicesEnd User Devices
EmployeesEmployeesContractsContracts
Org
anis
ation
al A
rea
(Who
pur
chas
es)
General Ledger Accounts (What is purchased)
3D
End User DevicesEnd User Devices
Employee CostsEmployee CostsContractsContracts
End User DevicesEnd User Devices
Serv
ices
Org
anis
ation
al A
rea
(Who
pur
chas
es)
General Ledger Accounts (What is purchased)
Value chains
SS
CC
2D 3D 4D 5D
What is Minimal?
Corporate Apps
Communication
App Hosting
Operation Support
End-user Services
Military/Logistic Apps
Costing
Recap Definitions
Large
Complex
Value chain
Costing services
Minimal
SS
CC
2D 3D 4D 5D
Reminder
The dollars represent
the annual service cost,
not the acquisition price
Analogy
$2,500/year
$2,500/year+/- adjustments
Parametric
100 users$2000/year (each)
200 users$1,900/year (each)
Engineering
Corporate Apps
Communication
App Hosting
Operation Support
End-user Services
Military/Logistic Apps
Actual Cost
2013$2,000/year
2014$2,100/year
Reminder
QA is done at each
step
Prepare Structures
• Cost pools (groupings of ledger accounts)• Organisational hierarchy (cost centres)• Employee structures (e.g. occupations) • Actions (what people do)• Services (what is produced, consumed)• Consumers (external)
InputsInputs
BLACK BOXBLACK BOX
OUTPUTSOUTPUTS
Populate with data
• Financial data (for chosen period of analysis)• Personnel data (individual APS, ADF, ESP)• Transaction descriptions, purchase order text• Intranet websites• Volumetric data• Costing interviews
InputsInputs
BLACK BOXBLACK BOX
OUTPUTSOUTPUTS
Eat FruitProject cost estimationBudgetingService managementOrg. restructure
Minimal
• Maximise use of existing data• Lots of automation
reports in Word, PowerPoint, Excel
• Most effort is by the costing team, not managers
• On average an interview takes 2 hours/year
PredictionsIncreased use by project costingMore streamlined approvals processIncreased Defence groups implementationImproved support to militaryImproved supplier consumer relationships