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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.

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

• 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

Lead Consultant, Balanced Scorecard Solutions

Andrew Lim is a seasoned management consultant with over 28 years of experience in strategic planning, performance management, and human resource management. He has successfully led consulting and training engagements across the public and private sectors in Singapore, Asia, the Middle East, and Africa.

His areas of expertise include:

• Strategic Planning and Management
• Performance Management Systems
• Human Resource Planning
• Leadership and Change Management
• HR Competency Framework Development
• Aligning HR Strategies with Business Objectives
• Activity-Based Costing and Management (ABC/M)

In addition to his consulting work, Andrew has extensive experience implementing management information systems that support strategic decision-making and organizational performance improvement.

Before joining Balanced Scorecard Solutions, Andrew headed the Asian operations of SPSS Inc., a global leader in statistical data analysis software. In 1997, he joined ABC Technologies to establish and lead its Asian headquarters in Singapore. Since then, he has assisted numerous multinational corporations, local enterprises, and government agencies in implementing performance management systems and activity-based cost management solutions.

Andrew has delivered consulting projects for a wide range of Singapore organizations, including the Singapore Institute of Management (SIM), SPRING Singapore, the National Gallery Singapore, Singapore Art Museum, LASALLE College of the Arts, R1 International, F&N Group, United Overseas Land, and Hitachi Chemicals. His work has often involved developing competency frameworks, performance appraisal systems, and strategic performance management initiatives.

Internationally, he has led projects for organizations such as the Ministry of Defence and the Prime Minister’s Office in Brunei, Asia Commercial Bank (Vietnam), Commercial Bank of Qatar, the Royal Court of Oman, and the Ministries of Justice and Youth, Sports and Culture in Namibia. He has also undertaken major public sector consulting assignments in Tanzania, Botswana, Uganda, Qatar, the United Arab Emirates, Iran, and Saudi Arabia.

Notable projects under his leadership include engagements with the Port of Singapore Authority (PSA), Singapore General Hospital, Changi General Hospital, Telekom Malaysia, Celcom Malaysia, PT Telkom Indonesia, Texas Instruments, AMD, UOB Bank, OCBC Bank, and TSMC Taiwan.

A recognized authority in strategic planning and performance management, Andrew is a strong advocate of the Balanced Scorecard (BSC) methodology. He regularly conducts executive talks, workshops, and training programs on strategic planning, performance measurement, and BSC implementation across Asia, the Middle East, and Africa.

Andrew also serves as a Strategic Planning and Performance Management Expert for Singapore’s Civil Service College and Singapore Cooperation Enterprise, supporting consulting and capability-building projects for foreign governments worldwide.