Design of an ABC Costing model

Mission

Support the Finance Department of our client, a public-sector organization, in designing their ABC (Activity-Based Costing) model.

Key figures

• 8 direct participants on the project (Management Control and Finance IS Steering)
• 30 managers interviewed across the organization
• + 500 MCHF of structured budget
• +12 months of support from design to model validation, including a testing phase

Results

• Creation of the mapping of target processes and activities for the management model
• Evolution of the initial need: shift from a costing model (cost analysis) to a margin management model (profitability analysis)
• Design of the target profitability analysis model that allows:
  • Allocate all expenses to marketed products and services
  • Allocate revenues to manage margin
• Structuring of a dashboard for managing costs and profitability

Success factors

• Understanding of the ins and outs by all stakeholders
• Ownership of the approach by the project team and active participation during the different phases of the project
• Visual mapping of the steps for allocating costs and revenues