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Activity-based Cost Management: Managing for Better Profitability
Businesses all over the world are running into trouble in ever increasing numbers, including some household names. The economic crisis, caused to a large extent by slumping oil and commodity prices, is making the situation worse. More and more, businesses must re-examine their product and service offerings to see if they are selling the right products/services at the right prices. They need to look more intently into their processes to see if there are opportunities for cost reduction.
Activity-Based Management (ABM) is a performance management methodology that enables organisations to streamline and improve their processes by understanding activity costs. With better cost information, organisations are able to manage their entire operations, and hence improve the results to their stakeholders.
The primary focus is to understand the costs of selling a wide range of products to a wide range of customers. Which are your most profitable products and services? Who are your most profitable customers ? If they are unprofitable, how do you make them profitable ?
These are the sort of questions businesses are asking frequently. Through ABC/M, they are able to have greater visibility into how costs are incurred and where the profits or losses, are coming from.
Activity-Based Management (ABM) is a performance management methodology that enables organisations to streamline and improve their processes by understanding activity costs. With better cost information, organisations are able to manage their entire operations, and hence improve the results to their stakeholders.
The primary focus is to understand the costs of selling a wide range of products to a wide range of customers. Which are your most profitable products and services? Who are your most profitable customers ? If they are unprofitable, how do you make them profitable ?
These are the sort of questions businesses are asking frequently. Through ABC/M, they are able to have greater visibility into how costs are incurred and where the profits or losses, are coming from.
Objective
By the end of the programme, participants should be able to:
- Identify the elements and describe the benefits of The ABM Framework.
- Use ABM to drive organisation’s performance and results
- Use ABM to streamline and improve processes
- Use ABM as a Cost Management and Budgeting tool.
Outline
1. The need for ABC/ABM
2. Overview of ABC/M
3. Building an ABC Model
4. Activity-Based Budgeting
5. Critical Success Factors in ABC/M Implementation
- Why do you need ABM?
- What is the current environment in which firms are operating in?
2. Overview of ABC/M
- What is ABC/ABM?
- The CAM-I Cross
3. Building an ABC Model
- Defining Resources, Activities and Cost Objects
- Defining Cost Drivers
- Making cost assignments
4. Activity-Based Budgeting
5. Critical Success Factors in ABC/M Implementation
Who should attend
Participants should be management level staff.
Methodology
Using the best mix of training and learning methodologies, this programme will be highly interactive and experiential. Besides formal lecturing, activities include open discussions, group work, exercises, experiential activities and case study.
Profile of Andrew Lim
Andrew Lim has been in management consulting for the last 20 years, specializing in strategic planning, performance management and human resource management, including consulting and training work in the following areas :
Strategic Planning & Management
Human Resource Planning
Leadership & Change Management
HR Competency Modeling
Performance Management
Aligning HR to Strategy
Activity-Based Costing / Management (ABC/M)
He has also been helping clients implement management information systems which are used for strategic decision making. Prior to joining ABC (Activity-based Costing) Technologies, he headed the Asian operations for SPSS Inc., the world’s leading supplier of software for statistical data analysis. In early 1997, he joined ABC to start up its Asian headquarters in Singapore. Andrew has helped numerous clients - MNCs and local companies and public sector agencies - to implement Performance Management Systems and activity-based cost management systems.
Andrew has undertaken performance management consulting projects for many Singapore organisations such as Singapore Institute of Management, SPRING Singapore, the National Gallery, the Singapore Art Museum, LASALLE College of the Arts, R1 International, F & N Group, United Overseas Land and Hitachi Chemicals. He has also undertaken international projects such as the Ministry of Defence and the Prime Minister’s Office in Brunei, the Asia Commercial Bank Vietnam, the Commercial Bank of Qatar, the Royal Court of Oman, and the Ministry of Justice and the Ministry of Youth, Sports and Culture in Namibia. Some of these work include the development of HR Competency Framework and the Performance Appraisal System.
Andrew has also led numerous public sector consulting projects in Tanzania, Botswana, Uganda, Qatar, the UAE, Iran and Saudi Arabia.
Major ABC projects undertaken include Port of Singapore Authority, Singapore General Hospital, Changi General Hospital, Telekom Malaysia, Celcom Malaysia, PT Telkom Indonesia, Texas Instruments, AMD, UOB Bank, OCBC Bank and TSMC Taiwan.
Andrew continues to "evangelise" the use of BSC in Strategic Planning and Performance Management in the countries throughout Asia, the Middle-east and Africa. He has given talks, training, and workshops on concepts, applications and also implementation issues.
Andrew is the Performance Management and Strategic Planning expert in the Civil Service College and Singapore Cooperation Enterprise in Singapore in their consulting projects for foreign governments.
