Transcript Faster, Better Bid & Proposals

Activity Based Costing within a
collaborative estimating framework
Association of Cost Engineers
17th February 2004
Grahame Jones, UK Manager, PRICE Systems
Tel. 01256 760012
[email protected]
FASTER DECISIONS. BETTER DECISIONS.
Top level Flow Diagram
Request for services
Pre-request
activities
Delivery of output
Request
assessment
activities
Production
of service
activities
Post Delivery
activities External
Post Delivery
activitiesInternal
Customer information feedback
Management information feedback
WWW.PRICESYSTEMS.COM
Pre-request activities
• Pre-request activities are of a strategic
nature dealing with the organisation of
the department to ensure that when a
request for services is received that
appropriate resources are available in
terms of staff, information, tools and
funds.
• At this stage the activities are speculative
in nature as the precise details of the
services to be delivered are not defined.
WWW.PRICESYSTEMS.COM
Request Assessment
• Request Assessment activities firm up
on the details of the activities in the
previous stage. These activities refine our
understanding
of
the
customers’
requirement and start to clarify the
approach to be adopted.
• During this Request Assessment a
Manager takes control of the task and is
delegated the resources to enable the
task to be progressed in a timely manner
and efficiently.
WWW.PRICESYSTEMS.COM
Production of Service
• Production of Service leads to
and includes production of the
required Cost Estimate.
• The appropriate tools, skills and
resources are utilised to ensure
that the Cost Estimate is realistic
and also acquires commitment from
all functions.
WWW.PRICESYSTEMS.COM
Post Delivery Activities
(External)
• Post Delivery Activities cover
external customer feedback.
• Ensures that the organisation
captures any follow-on work which
results from the immediate task
• Obtain a critique of the service
provided so that improvements can
be made in future work.
WWW.PRICESYSTEMS.COM
Post Delivery Activities (Internal)
• Post Delivery Activities (Internal)
are the final part of the process and
cover closing out the work.
• The aim is to provide feedback of
task management information. The
time from beginning to end may be
many months or years and it is
important to capture experiences
which would assist in future work.
WWW.PRICESYSTEMS.COM
Collaboration Definitions
• R = Responsible
– Many people
– Work, reports or data required
• A = Accountable
– One person
– "The buck stops here!"
• C = Consulted
– Two way communication
– Positive input, ideas or thoughts
• I = Informed
– One way communication
– Supplied with output
WWW.PRICESYSTEMS.COM
Collaboration Matrix
Person or Function
Chief
Executive
Activity or Decision
Pre-request activities
Request assessment activities
Production of service activities
Post delivery activities - External
Post delivery activities - Internal
I
C
I
Directors
R
I
C
I
R
Head of
Divisions /
Resources
A#
R
C
R
A#
Commercial Estimating Finance
Depart.
Depart.
Depart.
A#
R
R
R
A#
A
A
A
R
SubCustomer
contractors
R
R
R
R
I
# = at appropriate levels
WWW.PRICESYSTEMS.COM
C
Cost Framework
Products,
Services or
Customers
Cost
Objects
What was
produced
The reason
for
performing
activity
Activity Driver
Activity Drivers
are used to trace
the consumption
of Activities by
your
Product/Services
.
Activities
Resource Driver
How it was Resource
Drivers are
spent
used to trace
The work
the Resources
that is done.
to Activities.
Activities
consume
Resources.
Resources
What was spent
Anything that
you spend
money on in
performing an
activity
WWW.PRICESYSTEMS.COM
Communicating Complex Relationships
£/€
£/€
Resource
Expenses
1
Resource
Expenses
2
. . .
£/€
Resource
Expenses
N
Resource
Cost
Drivers
Activity
1
Activity
2
Activity
3
. . .
Activity
X
Activity
Cost
Drivers
Direct Materials
Direct Labor
Cost Objects:
Products, Services, and
Customers
WWW.PRICESYSTEMS.COM
Multi-Dimensional Views
Time
Views
Productivity
Activities
Capacity
Customers
Time to Market
Quality
Revenue
Cost
Products / Services
Profitability
WWW.PRICESYSTEMS.COM
Proposed Planning Framework
Analyst
• Model builder
• CER editor
• External CER
integrator
Planner
• Project estimator
• Collaboration center
• What-if/scenario
modeler
• Customized report
generator
• Resource capacity
analyzer
WWW.PRICESYSTEMS.COM
Analyst - the construction zone
Framework
Analyst
• Build custom cost models
• Parametric
• Bottom-up/grass root
• Incorporate commercial cost
models
• Customize commercial models to
specific industries
• Wizards and pre-defined cost
variables ease the process of
building and maintaining cost
models
•
Planner
Familiar, activity based
terminology
WWW.PRICESYSTEMS.COM
Planner - the estimation zone
•
Use custom and commercial cost
models in an integrated environment
• Parametric
• Bottom-up/grass root
•
Use built-in costing features
•
•
•
•
•
•
Cost escalation
Risk analysis
Resource capacity analysis
What-if analysis
Calibration
Audit trail maintenance
Framework
Analyst
Planner
WWW.PRICESYSTEMS.COM
An analogy
Think of the framework as a video games console and
the cost models as video game cartridges.
Commercial Cost Models
Project Cost Model
In-house Cost Model
Cost Model X
WWW.PRICESYSTEMS.COM
A Framework Implementation
Cost Objects
Outputs
View
Inputs
- Product Breakdown Structure
- Work Breakdown Structure
- Organisation Breakdown Structure
WWW.PRICESYSTEMS.COM
Framework – ABC Multiple Views
View
- Product Breakdown Structure
- Work Breakdown Structure
- Organisation Breakdown Structure
WWW.PRICESYSTEMS.COM
Framework – ABC Multiple Views
View
- Product Breakdown Structure
- Work Breakdown Structure
- Organisation Breakdown Structure
WWW.PRICESYSTEMS.COM
Example – An IT project cost
WWW.PRICESYSTEMS.COM
Collaborative Estimating Framework
where is the value?
 Cost Engineers working together in a culture
of collaboration.
 Cost Engineers using a standard estimating
framework with bespoke cost estimating
relationships
 Cost experts contributing their expertise for
their part of the system estimate.
 Cost outputs shared with relevant disciplines
across an organisation.
 Cost engineers, finance, senior management
saving time through collaboration.
WWW.PRICESYSTEMS.COM
Collaborative Estimating Framework
where is the value?
 Cost models from different sources can take
advantage of working in the same workspace,
rolling up costs, highlighting interdependencies, using the same tools, risk,
economics, reporting…
Any Questions?
WWW.PRICESYSTEMS.COM