Output Costing and Cost Analytics

Understanding Output Costs

Accurately measuring the cost of program delivery is essential to accountability and delivering best value for money. This involves tracing the costs of staff, equipment and capital assets directly and indirectly involved in delivering the program to the final outputs and outcomes.

But measuring cost is not the endgame. Costing information should be actionable so as to inform decisions about how to improve processes, set fees or remove non-value adding activity. This means developing models that provide “what–if” analyses to show how new levels of demand will affect costs now and in the future.

Costing for Government

Government executives and managers must have deep insight into costs so that they can make informed decisions about resource allocation and priorities. Departments and agencies need to develop a consistent and transparent process that calculates full costs and allocates these costs to programs and program outputs and outcomes. This requires;

Program and output costing with best-of-breed activity-based costing methodology together with flexibility to integrate other types of allocations.
Shared services costing for the automated costing and chargeback of central costs for services provided by departments such as IT, acquisition, and accounting.

But it’s no longer adequate simply to examine historic costs; the process needs to be able to function at all stages of budget formulation and execution, in addition to historic reporting.

Business Objects enterprise performance management (EPM) applications integrate cost analytics directly into planning and budgeting allowing government managers to see exactly how the decisions they make impact program costs.

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Costing for Government

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