Capability Costing 

Capability Costing is undertaken using the concepts of Activity Based Costing (ABC). ABC provides a unique management tool for enhancing the quality of decision-making. Activities are linked to the resources consumed, which ultimately incur costs; enabling management to more effectively manage and control costs.

The ABC consulting assignment approach follows a structured approach with the implementation strategy incorporating the following process:

  • Education and Training
  • Selecting the ABC team
  • Defining the Capabilities
  • Defining the Customers
  • Agreement on the Cost Base
  • Linking Cost Base to Activities/Cost Pools to Capabilities to Customers
  • Defining the Drivers
  • Collecting data
  • Building the model
  • Verifying the model and scenario testing

This unique process provides the link between business planning, identification and costing of capability with the performance of the organisation. The process identifies the key business processes within the organisation and the actions required to move the organization forward.

The consulting assignments that have been undertaken have been successful due to the unique methodologies that have been employed. The success achieved is due to an appreciation of the assignment in terms of:

  • Keeping it simple
  • Making it meaningful and practical
  • Developing a structured approach
  • Keeping it cost effective

We have developed a leading edge in the delivery of many high profile assignments. The process of transferring ownership to the client through "facilitation consultancy" has proved to be both cost effective and efficient.

Capability Costing can include:

  • Identification of Capabilities
  • Development of performance measures
  • Activity Based Costing - a complete solution
  • Accrual Output Budgeting
  • Designing & negotiating performance contracts
  • Design of effective diagnostic and monitoring systems
  • Balanced Scorecard
   
 

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