By Matt Beekman
Increasing pressure for Government to "operate like a business" is
causing public sector organizations to review and evaluate historically
private sector management tools, techniques, and methods to better
understand their "true costs" of services. One of the most potentially
useful of these methods is Activity-Based Costing/Management (ABC/M).
ABC/M uses tools and modeling techniques based on Activity-Based
Costing (ABC) to analyze work activities, assign resources to those
activities then to outputs, and evaluate organizational results based
on documented business processes. ABC/M provides the information that
managers need to understand costs, in a way that was not previously
apparent, on cost per output based on the activities accomplished to
create that output. This information can be used to support
performance-based business decisions such as how to restructure
organizations to support changing business objectives or missions.
Additionally, by focusing on processes, the ABC/M approach facilitates
the use of meaningful performance measures and supports continuous
improvement. |
