CostPerform Software Tutorial and Features – The Evolution from Activity Based Costing (ABC) to Business Process Modeling
Traditional ABC Focuses on Activity Detail
Process Business Models Focus on Volume of Product and Service Flows through the Business Processes
Ø CostPerform is a tool and methodology that supports strategic and operational projects.
· Strategy development and strategic alignment projects.
· Performance Improvement and Process Improvement projects such as the Lean 6 Sigma initiatives.
· Costing projects including cost of customers and costs of products projects to support product line strategy, pricing decisions, and management dashboard and scorecard development and operation.
Ø CostPerform is a process costing tool - an evolution of traditional Activity Based Costing and Process Mapping. It differs from other tools and methodologies in two primary dimensions.
· CostPerform was designed to communicate effectively to managers.
· CostPerform supports building models that reflect the unique business processes, activities and structure of each business or organization.
Ø A process model is a representation of the organization's operations from which all unnecessary detail has been removed.
· Each Manager in any and every organization thinks using a "mental model".
· Building a clear, explicit, shared model to bring decision makers on the same page is the first step in Performance Improvement and Strategic Alignment.
CostPerform Software Tutorial and Features - Developing Models in CostPerform
Ø Model development begins with understanding the purpose of the business model and business questions the model is intended to address.
· A clear understanding of the management issues drives the model design and structure.
· Since the software is flexible, changing the model structure to address the same issues in a repeatable format in the future, or changing it to reflect a different set of management issues is easy to do.
Meta Models Are the Skeleton or Blueprint of the Models
Ø With a clear understanding of the business issues, the actual development of the model starts with accurately modeling the flow of volume of products and services.
· Volume and quantities of output is the most important driver of a business model whether public sector or commercial sector.
· Product/service volume flow is also the natural way to develop cost drivers (pull or consumption; or push or allocation) - it mimics the uniqueness of the organization.
CostPerform Business Models Communicate a Shared Understanding of Performance
Ø CostPerform Develops Critical Information and Communicates a Shared Understanding of Organizational Performance
· The models link the myriad of systems or acts as a bridge between ERP and other systems.
· Once fragmented information which had to be cross-analyzed in Excel is now linked and automated.
CostPerform Software Tutorial and Features – Unique CostPerform Features
Ø Flexible Model Architecture
· Current ABC software is incapable of flexibility in designing the most appropriate architecture for a given organization. Every organization has different strategic issues as well as differing organizational structures. CostPerform allows each organization to set up an appropriate number of levels in the model architecture to meet their needs.
CostPerform Flexible Architecture
Ø Use of Multiple Driver Types for Distinct Processes
· CostPerform supports the use of multiple driver types in developing business models. Alternative output quantities or process productivities could not be easily developed or envisioned using traditional ABC model software. The software has the ability to "think backwards"- this means developing the budget requirements accurately for alternative output mixes and quantities. The model develops consumption rates from a base period and revises them iteratively as the model is completed.
Ø User Friendly Data Input and Assignment Matrix
· CostPerform has a unique assignment matrix feature that makes data input easy and results in a well organized display. All imported assignment data and any attribute values (cost, unit quantities, Productivity, etc.) are immediately shown in the matrix for ease of analysis and evaluation of alternative scenarios.
CostPerform Data Input
Ø Interactive and Multidimensional Analysis
· CostPerform makes the graphical analysis of data, relationships, process composition, and resource usage easy with a visual tool that shows linkages between assigned objects across multiple layers.
CostPerform White Board Feature
Ø Report Wizard
· CostPerform has a new report wizard interface to develop easy and customizable reports for all levels of the organizational personnel.
Ø Dashboard Feature
· CostPerform has a dashboard feature that allows for key financial and non-financial data and metrics to be viewed in a dashboard interface for regular monitoring and measurement.
CostPerform Decision Support Dash Board