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Activity Based Management

Our experience is that organisations manage costs in the same way that people try to lose weight by dieting.  The result is always the same; you may lose a few pounds in the short term only to put it all back on.  We help clients to understand what makes them hungry in the first place describing their cost drivers, activities, operations and performance management systems.  We build an activity based model of the business showing the true costs of processes, products, services and customer segments, without the distortion of full overhead absorption approaches. The activity based model illustrates the profile of the cost base, the distinction between function sustaining, volume related and business sustaining activities and costs.  An activity based model provides the basis for managing the cost base through the activities that are performed and which consume resources.  The traditional cost management approach of inhibiting resources just puts additional strain on the remaining resources if the same activities must still be performed.


Key Benefits

Enables effective cost management through exposing how resources are consumed.

Understand how the cost base reacts to changes in business volumes and processes

Complete audit trail to traditional management accounts

Typical Engagements

Product and customer profitability analysis

Activity and process costing as part of process design programmes

The development of budget and cost management systems