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

http://www.dau.mil

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

http://www.dau.mil

Costing Services

links to all these

methods!

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