Tag: activity based costing
It’s an IT contract negotiator’s dream – to enter talks with detailed cost data about each activity involved in a comprehensive business process outsourcing (BPO) deal. Armed with this cost data, negotiation starts with how the service provider can beat internal costs for performing the process activities, ensuring that the business case proves positive, or at the very least, break even.
Adrian Moore, director of privatization and government reform for the Reason Public Policy Institute, a think tank in Los Angeles, California, says the problem with government management is up until now they have had no economic performance incentives to examine and improve their processes. Unlike businesses, they have no angry customers telling them exactly what’s wrong with their business (and how much they hate standing in line.) If your process takes too long or costs too much, the government agency doesn’t lose customers, says Moore. Where else can you get a driver’s license?
Road guards are people who try to keep you from making changes. Some have root rot because they have been in place so long. But I like to change and improve things! states Jim Jones, head of reengineering at Warner Robins Air Logistics Center (ALC). The Center’s personnel currently are working on 12 improvement projects, one of which is activities-based costing (ABC)…
All levels of American government are feeling the twin — and conflicting — pressures of reducing costs while improving performance. Legislative budget cuts are forcing agencies to turn to government consultants like Mevatec, a Huntsville, Alabama firm, to help them satisfy these twin dragons. In the past government agencies routinely increased their annual budgets.