Skip to Main Content
Activity-Based Management for Financial Institutions: Driving Bottom-Line Results
book

Activity-Based Management for Financial Institutions: Driving Bottom-Line Results

by Brent J. Bahnub
March 2010
Intermediate to advanced content levelIntermediate to advanced
224 pages
4h 44m
English
Wiley
Content preview from Activity-Based Management for Financial Institutions: Driving Bottom-Line Results
APPENDIX
ABC Model and Cost Object Reporting Rules and Assumptions
It is important to set ground rules early in the ABC implementation. This includes high-level ABC model and output rules and assumptions. Since the outputs—particularly the cost object reports—are defined early in the project, it is important to create the ground rules for the outputs first. This section contains an example of rules set within the first month of an ABC implementation at an Information Technology Shared Services organization.

MODELING RULES AND ASSUMPTIONS

Zero Profit Model

The intent of the model is to drive all Shared Services expenses to the appropriate Business Units (BUs). Shared Services also consumes their own resources, but these expenses will be re-assigned to BUs. This re-assignment will be driven to BUs based on their overall Shared Services consumption. The re-assignment will be a single line item on the consumption report.

Activity Relevance

Only activities requiring a minimum of five full-time equivalents (FTEs) or a monthly cost of $40,000 will be used in the costing model. While detailed information regarding most activities will be available using the Planview information, this information will be rolled up for ABC purposes. This modeling rule provides detailed costing information without dropping below managerially relevant information.

E-mail, Meetings, and Other Micro Tasks

E-mail, meetings, and similar micro tasks crossing multiple activities are not listed as tasks ...
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Start your free trial

You might also like

Financial Institution Advantage and the Optimization of Information Processing

Financial Institution Advantage and the Optimization of Information Processing

Sean C. Keenan

Publisher Resources

ISBN: 9780470599815Purchase book