Wiley SAS Business Series Title Page Copyright Page Dedication Foreword THE NEED TOREPLACE TRADITIONAL COST MEASUREMENT METHODS OVERCOMING THE SPEED BUMPS OF ABC ABC PROVIDES LIGHT AT THE END OF THE TUNNEL Preface About the Website Acknowledgements CHAPTER 1 What Are ABC and ABM? WHAT IS ABC? WHAT IS ABM? NOTE CHAPTER 2 Costing, Chargeback, and Pricing DEFINE YOUR OBJECTIVES COSTING: ABSORPTION CHOICES COSTING: DRIVING COSTS FROM SUPPORT AREAS CHARGEBACK RATES BANK BRANCH PROFITABILITY PRICING NOTE CHAPTER 3 Implementing ABC ABC IMPLEMENTATION GUIDING PRINCIPLES MODEL RULES, ASSUMPTIONS, AND DESIGN DOCUMENTS DRIVER DECISIONS ATTRIBUTE DECISIONS LEVEL OF DETAIL DECISIONS TOOLS ACTIVITY AND DRIVER DICTIONARIES PUTTING IT ALL TOGETHER: AN ABC EXAMPLE NOTES CHAPTER 4 Implementing ABM STRUCTURING THE ORGANIZATION AND PROCESS FOR SUCCESS DIFFERENCES BETWEEN ABM AND ABC STAFFING PROJECT PORTFOLIO MANAGEMENT DRIVING RESULTS ADDITIONAL CONSIDERATIONS FOR FINANCIAL SERVICES NOTES CHAPTER 5 ABCM in Shared Services STARTING ABCM WITH SHARED SERVICES COMMUNICATION BARRIERS EXPECTED DIALOG FOR PLANNING INTEGRATING THE IT MODEL DRIVING VALUE WITHIN SHARED SERVICES: IS EXAMPLES CHAPTER 6 Managing Organizational Change IMPORTANCE OF ORGANIZATIONAL CHANGE MANAGEMENT ORGANIZATIONAL READINESS AND OVERCOMING RESISTANCE YOUR ROLE AS CHANGE AGENT NOTES CHAPTER 7 Avoiding the Pitfalls: Lessons Learned ABC LESSONS LEARNED ABM LESSONS LEARNED NOTE CHAPTER 8 Beyond ABCM PORTABLE SKILLS ADJACENT CAREERS IN CONCLUSION APPENDIX ABC Model and Cost Object Reporting Rules and Assumptions
Activity-Based Management for Financial Institutions Wiley & SAS Business Series The Wiley & SAS Business Series presents books that help senior-level managers with their critical management decisions Titles in the Wiley and SAS Business Series include: Business Intelligence Competency Centers: A Team Approach to Maximizing Competitive Advantage, by Gloria J Miller, Dagmar Brautigam, and Stefanie Gerlach Business Intelligence Success Factors: Tools for Aligning Your Business in the Global Economy by Olivia Parr Rud Case Studies in Performance Management: A Guide from the Experts, by Tony C Adkins CIO Best Practices: Enabling Strategic Value with Information Technology by Joe Stenzel Credit Risk Assessment: The New Lending System for Borrowers, Lenders, and Investors by Clark Abrahams and Mingyuan Zhang Credit Risk Scorecards: Developing and Implementing Intelligent Credit Scoring, by Naeem Siddiqi Customer Data Integration: Reaching a Single Version of the Truth, by Jill Dych e and Evan Levy Demand-Driven Forecasting: A Structured Approach to Forecasting by Charles Chase Enterprise Risk Management: A Methodology for Achieving Strategic Objectives by Gregory Monahan Fair Lending Compliance: Intelligence and Implications for Credit Risk Management by Clark R Abrahams and Mingyuan Zhang Information Revolution: Using the Information Evolution Model to Grow Your Business, by Jim Davis, Gloria J Miller, and Allan Russell Marketing Automation: Practical Steps to More Effective Direct Marketing, by Jeff LeSueur Performance Management: Finding the Missing Pieces (to Close the Intelligence Gap) by Gary Cokins Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics by Gary Cokins The Data Asset: How Smart Companies Govern Their Data for Business Success by Tony Fisher The New Know: Innovation Powered by Analytics by Thornton May Visual Six Sigma: Making Data Analysis Lean by Ian Cox, Marie A Gaudard, Philip J Ramsey, Mia L Stephens, and Leo Wright (Publishing December 2009) For more information on any of the above titles, please visit www.wiley.com Activity-Based Management for Financial Institutions Driving Bottom Line Results Brent Bahnub John Wiley & Sons, Inc Copyright # 2010 by Brent Bahnub All rights reserved Published by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 7508400, fax (978) 646-8600, or on the web at www.copyright.com Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at www.wiley.com/go/permissions Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose No warranty may be created or extended by sales representatives or written sales materials The advice and strategies contained herein may not be suitable for your situation You should consult with a professional where appropriate Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 7622974, outside the United States at (317) 572-3993 or fax (317) 572-4002 Wiley also publishes its books in a variety of electronic formats Some content that appears in print may not be available in electronic books For more information about Wiley products, visit our website at www.wiley.com Library of Congress Cataloging-in-Publication Data Bahnub, Brent Activity-based management for financial institutions: driving bottom line results/ Brent Bahnub p cm Includes index ISBN 978-0-470-56222-2 (cloth) Activity-based costing Financial institutions I Title HF5686.C8B24 2010 332.1068 01–dc22 2009041466 Printed in the United States of America 10 For Jordan, Taylor, and Logan Contents Foreword ix Preface xv About the Website xix Acknowledgments xxi Chapter What Are ABC and ABM? What Is ABC? What Is ABM? Chapter Costing, Chargeback, and Pricing 13 Define Your Objectives 13 Costing: Absorption Choices 19 Costing: Driving Costs from Support Areas Chargeback Rates 27 34 Bank Branch Profitability Pricing 24 41 44 Chapter Implementing ABC 55 ABC Implementation Guiding Principles Model Rules, Assumptions, and Design Documents 59 Driver Decisions 60 Attribute Decisions 62 Level of Detail Decisions Tools 69 vii 66 55 viii I CONTENTS Activity and Driver Dictionaries 70 Putting It All Together: An ABC Example 72 Chapter Implementing ABM 83 Structuring the Organization and Process for Success 83 Differences between ABM and ABC Staffing Project Portfolio Management Driving Results 100 101 107 Additional Considerations for Financial Services 113 Chapter ABC/M in Shared Services 121 Starting ABC/M with Shared Services Communication Barriers 122 Expected Dialog for Planning Integrating the IT Model 121 124 129 Driving Value within Shared Services: IS Examples 137 Chapter Managing Organizational Change 143 Importance of Organizational Change Management 143 Organizational Readiness and Overcoming Resistance 145 Your Role as Change Agent 153 Chapter Avoiding the Pitfalls: Lessons Learned 161 ABC Lessons Learned 161 ABM Lessons Learned 171 Chapter Beyond ABC/M 179 Portable Skills 179 Adjacent Careers In Conclusion Appendix 184 189 ABC Model and Cost Object Reporting Rules and Assumptions 191 Modeling Rules and Assumptions 191 Cost Object Reporting Rules and Assumptions Index 193 195 186 I BEYOND ABC/M Pr o Adjacent Careers du ct Pr C us of to ita m b e Pr r S ility oj e ec gm tP en O la rg ta tio an nni n n iz g at an Pr io d oj na Pr ec lC of tP it a h Pr rio a bi oc ng r lit iti es e y za M tio Bu s Im an n ag si pr an ne ov em ss em d P en C or C om e t as nt tfo m e l i o un D M G ev ic oa an at el io lA ag ns opm em lig Ex e nm en n ec t e t ut nt io n ABC/M Portable Skills Product Manager Customer Segment Analyst Pricing Manager Project Manager Program Manager Process Improvement Consultant Financial Analyst Communications Manager FIGURE 8.2 Adjacent Careers—ABC/M Portable Skills Matrix product managers are often responsible for product marketing ABC/M team members can utilize their experience analyzing product profitability, recommending improvements, and driving improved margins to transition into product manager roles Remember, it is not uncommon for product managers to be evaluated and rewarded on revenue and revenue growth instead of profitability and margin growth In these situations, the ABC/M team may have more experience improving margins than the current product managers Customer Segment Analyst Customer segment analysts create and examine groups of people sharing common characteristics that cause them to have similar product needs or to behave in a similar manner A customer segment has needs and behaviors distinct from other segments, has common needs and behaviors within its own segment, and it responds similarly to stimuli (marketing campaigns, pricing changes, etc.) Customer segmentation ADJACENT CAREERS J 187 results within financial services feed pricing elasticity models which identify profit margin improvement opportunities Pricing Manager Pricing managers are responsible for maximizing profitability based on the product offer and market conditions (charge what the market will bear) More recently, as indicated above, pricing managers are responsible for maximizing profit by customer segment based on the product offer This requires extensive and ongoing customer segment pricing elasticity analysis Therefore, pricing managers look externally to analyze market forces and internally to analyze customer segment reactions to pricing changes Project Manager Project managers are responsible for planning, organizing, and managing resources, timing, and scope to successfully deliver project goals (requirements) As stated throughout this book, strong project management skills are necessary for the successful delivery of the ABC project and the subsequent ABM improvement projects Like the other adjacent careers, project management expertise requires education and experience If you elect to pursue a career in project management, take a few project management courses and become a Project Management Professional (PMP) Program Manager Program managers are responsible for managing several related projects Strong program management skills are necessary for the project portfolio management and delivery required in the ABM portion of the ABC/M implementation It is important to recognize that a great project manager will not necessarily be a great program manager This is similar to the fact that great first line managers not necessarily become great middle and senior managers Program management 188 I BEYOND ABC/M frequently involves bigger-picture thinking and the ability to manage project managers Process Improvement Consultant Process improvement consultants identify, analyze, and change existing processes within an organization to meet improvement objectives in quality, cycle time, and costs Process improvement consultants come in many flavors, but can be broken down into two primary types: methodologists and generalists Methodologists follow a specific methodology or strategy to deliver successful results Popular and proven process improvement methodologies include Six Sigma and Total Quality Management (TQM) On the other hand, generalists attempt to select improvement methodologies based on the situation at hand to deliver successful results While both approaches have pros and cons, both have been used for decades with success Regardless, if you choose to become a methodologist or a generalist, make certain to immerse yourself in at least one process improvement methodology For example, attend Six Sigma training, deliver improvements based on Six Sigma, and become a certified black belt Financial Analyst Financial analysts often include ABC team members They are responsible for budgeting and forecasting within the organization In most financial services organizations, financial analysts are responsible for variance analysis, which consists of comparing budget and forecast numbers to actual results and then providing a variance explanation Also, financial analysts assist in the creation of business cases for projects and validate project results post-implementation In more progressive companies, financial analysts also identify and track financial improvement opportunities IN CONCLUSION J 189 Communications Manager Communications managers plan, implement, monitor, and revise information on all communication channels within an organization and between organizations, including communications to the customers Communications managers develop corporate communication strategies, design internal and external communications directives, and manage the flow of information, including online communication IN CONCLUSION Activity-Based Costing is an extremely versatile and powerful tool used to improve processes and margins However, without the bottom line results driven by a disciplined Activity-Based Management program, the investment in the ABC implementation is wasted Unfortunately, many financial services companies implemented ABC and did not fully comprehend the ABM commitment required to achieve the desired return on the ABC investments Many of these companies were disappointed and mistakenly blamed ABC for the lack of results However, the real failure of these implementations was overlooking and undercommitting to the ABM effort necessary to achieve the expected bottom-line results Like many organizationally complex improvement initiatives, ABC/M is difficult to implement well However, the benefit of implementing world-class improvement techniques such as ABC/M remains large Because of the large potential, organizations will continue to return to ABC/M, hoping for improved results But consider yourself forewarned—failed ABC/M implementations will fail again unless organizational, methodological, and process changes are made to ensure that the ABC results are used, improvements are made, and changes stick As Albert Einstein famously stated, ‘‘Insanity is doing the same thing over and over again and expecting different results.’’ Hopefully, this book provides some guidance and encouragement for first-time ABC/M implementers, as well as ABC/M re-implementers For the ABC/M re-implementers, closely examine your own organization 190 I BEYOND ABC/M to determine the reasons for the less-than-stellar previous implementation Create your own personalized list of lessoned learned and potentially repeated pitfalls From the first day of the re-implementation, incorporate mitigating actions to these pitfalls A former professor of mine passed along a quote from an admiral friend of his: ‘‘Don’t blame a person for accidentally shooting himself in the foot Only blame him if he reloads.’’ Learn from past shortcomings and adjust your current course When implemented properly, the ABC/M benefits are certainly worth the efforts APPENDIX ABC Model and Cost Object Reporting Rules and Assumptions I t 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 reassignment 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 191 192 I APPENDIX 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 within any activity Any time spent on these types of tasks should be logged to the associated activity For example, if an e-mail was drafted, sent, or read to surface design problems during an application development project, this time is logged to Design within the application development activities Application Development (AD) Lifecycle Terminology ABC terminology is used in the ABC model and consumption reporting ABC terminology is common throughout industry and business functions The ABC model summarizes the current AD Lifecycle for performance and consumption information A mapping of AD Life cycle modules to ABC Activities was created to bridge time tracking to the ABC Model AD Lifecycle is specific to IT developers and managers While AD Lifecycle is appropriate for project development and management within Shared Services, it is too complex for BU reporting Depreciation Some ABC models recalculate the expected useful life of equipment and use this schedule (rather than the accounting depreciation schedule) as the model expense schedule However, since the Shared Services model needs to tie actual expenses to the general ledger, actual depreciation is driven through the model APPENDIX J 193 Metrics and Surrogate Drivers In some cases, ideal drivers (resource or activity) are not available or easily used In such cases, surrogate drivers may be used to assign consumption costs Surrogate drivers are readily available, easy to use, and provide directionally correct assignments Future enhancements of the model include automated use of ideal drivers International Costs As an international corporation, Company XYZ recognizes expenses in several foreign currencies The foreign currency information is recorded in the general ledger in the local foreign currency The model requires a foreign exchange (FX) table to convert the foreign currencies to USD The FX table will be used monthly to convert the general ledger data The consumption reports will be generated in USD COST OBJECT REPORTING RULES AND ASSUMPTIONS Expected Cost Determination The expected costs for the model will be determined using FY08 cost data and either FY08 or estimated FY09 drivers Using a full year to determine standard costs removes monthly fluctuations that affect a full-year extrapolation of a single month’s cost/drivers Reconciliation for Over/Under Recovery As with all standard costing systems, there is some monthly variance The variance can be due to actual cost or volume fluctuations Since Shared Services is a zero profit Line of Business (LOB), adjustments need to be made as necessary Over/under recovery will be reconciled on a quarterly basis as a line item on the consumption report Premium and Incentive Pricing To influence consumption, some standard costs may be priced higher (premium priced) to discourage consumption, or priced lower (incentive 194 I APPENDIX priced) to encourage consumption Premium and incentive pricing are used sparingly in the initial consumption report development Cost Object Dimensions Activity consumption can be viewed in three dimensions: BU organization, product, and customer Using multidimensional modeling and reporting tools, all dimensions can be viewed BUs are combined to form LOBs Capitalized Projects As projects are capitalized in accordance with SOP-98, they will not be expensed to the BUs There is a section on the BU consumption report which itemizes capitalized project expenditures These capitalized expenditures are for informational and planning purposes only Amortized software is itemized, expensed, and billed on the BU invoice BU Consumption Reporting Initial consumption reports will be generated for each LOB and later generated by BU reporting By providing BU consumption reports, Shared Services will realize the primary objective of BU consumption control The BU invoices can be mapped to Legal Entities for profitability reporting and transfer pricing Mapping Projects/Applications to BUs and Platforms It is assumed that Shared Services maintains a mapping of all applications and projects to BUs It is also assumed that Shared Services maintains (or will maintain) a mapping of all applications and projects to platforms These mappings are essential to determine BU consumption and total platform costs Index ABC/M analysis, attributes, 62–66 ABC/M cross, 7–8 ABC/M objectives, 14–19, 84 accuracy ABC/M, 14, 31–32, 164 achieving, 25, 27–28, 31–32 activity driver, 60–61 activity hierarchy, 66–68 definition, dictionary, 70–72 activity costs definition, example, 72–81 activity drivers ABC/M Cross, 7–8 definition, dictionary, 70–72 equipment-related, 20–22 hierarchy, 124–128 identifying, 60–62 proxy, 61 surrogate, 61 weighted, 62, 72–78 activity-based budgeting (ABB) goals, 33 master drivers, 124–129 example, 124–129 calculated drivers, 124–128 activity-based costing (ABC) background, 1–7 definition, design, 55–69 example, 72–81 guiding principles, implementation, 55–59 pitfalls and lessons learned, 161–171 terminology, 2–4 activity-based management (ABM) definition and overview, 7–12 board, 90–97 pitfalls and lessons learned, 171–177 alignment, goal, 183 allocation capital, 116–117 cost, 24, 29 funds transfer pricing, 115–116 assignment, cost, 14, 25, 27, 29, 52 attributes channel, 65–66 cost of quality (COQ), 64–65 fixed and variable, 62–63 unused capacity, 66 valued-added and non-valueadded, 65 behavior, see organizational change management (OCM) baselines, using, 85 benchmarks using, 85 internal, information technology example, 139 195 196 I INDEX benchmarks (continued) external, information technology example, 138 best practices using, 86 help desk example, 141 billing systems, chargeback billing systems and shared services, 27–40, 121–137 branch owning versus servicing, 41–43 profitability, 41–44 re-domiciling, 43–44 budgeting, see activity-based budgeting (ABB) business case, development, 182 business process decomposition, improvement, 8, 109–110, 165–170, 182 improvement, consultant, 188 capacity excess, 20–24, 35–39 idle, 20–22 practical, 20–22 unused, 20–22 capital, cost of, 116–117 careers, adjacent, 184–189 change, organizational see organizational change management (OCM) chargeback, 27 charter, ABC/M project, 84 Cokins, Gary, 64–65 communications, management, 189 consumption, 45, 110–112 cost data collecting, 117–119 financial data, 4, 117–119 operational data, 117–119 uses of, 14–15 cost objects accuracy, 31 activity drivers and, 3–4 customers, 3–4, 7–11 definition, hierarchy, 66–68 cost variance analysis, 47–50 costing, activity-based, see activity-based costing (ABC) costing methods full absorption, 22–24 marginal, 19–22 reciprocal, 25–26 recursive, 26–27 waterfall, 24–25 costs, standard, 35–39 Crosby, Philip B., 64 customers behaviors, 41–44, 110–112, 127 cliff charts, 9, 110–112 cost object, 2–4, 7–11 deciles, 10 profitability, 7–11, 108, 110–112 segmentation, 7–11, 180, 186–187 unrealized profits, 10, 110–112 data collection, see cost data decision making accountability, 107–108, 173–176 accuracy, 31 Deming, W Edwards, 64, 143,165–166 depreciation equipment, 20–22, 62–63 unused capacity, 20–22 design, level of detail, 68–69 INDEX employees staffing ABC, 100 staffing ABM, 83–85, 100–101, 173 execution, 95, 184 excess capacity, see capacity expenses, traceback, 63 extract, transform and load (ETL) tools, 17, 33, 69–70 financial analyst, 188 financial tracking, 98–99 Friedman, Milton, 52 funds transfer pricing (FTP), 115–116 general ledger accounting, ABC/M compared, 5–6 idle capacity, 20–22 implementation ABC, 55–81 ABM, 83–119 improvement programs, ABC/M information, use of, 170–171 information technology (IT) benchmarks, 138–139 cost assignment network, 129–137 shared services and, 121–142 Juran, Joseph M., 64, 165 Kotter, John, 87–88 Kubler-Ross, Elisabeth, 144–145 leading practices help desk example, 141 using, 86 management, activity-based, see activity-based management (ABM) J 197 management support, 90–91 ABM board, 90–97 marginal costing, 20–22 online analytical processing (OLAP), 70, 79–81 operational control and accountability, 47–52, 107–108, 173–176 organization structure ABC team, 100 ABM team, 83–85, 100–102 ABM board, 90–97 organizational change management (OCM) analysis, stakeholder assessment, 149–151 analysis, force field, 151–152 burning platform, 145–146 change agent, 153–160 change agent, attributes, 154–156 change agent, deliverables, 156–160 change agent, deliverables, change plan, 157 change agent, deliverables, communications plan, 158–160, 183 change agent, deliverables, gap analysis, 156–157 change agent, deliverables, organizational readiness assessment, 157 leading change, 87–88 reactions to change, 144–145 readiness, 145–147 resistance, 147–149 resistance, overcoming 149 198 I INDEX performance management, 15 performance measurement ABC/M data, use of, 15 organizational model and ABC/M Cross, 7–8 scorecards, 103–104 practical capacity, 20–22 predictive costing budgeting, 124–129 channels, 112–114 prices cost-plus pricing, 52–53 incentive and disincentive, 46–47 management, 187 market pricing, 52–53 processes, definition, productivity, see unused capacity management products cost objects, 1–2, management of, 185–186 profit segmentation, 8–11, 110–112 cliff chart, 8–11, 110–112 profitability customers, 8–11, 15–16, 27–28, 110–112, 180 products, 8–11, 15–16, 27–28, 180 channels, 65, 112–113 branches, 41–44 program management, 187–188 progressive Insurance, 111–112 project accounting, 131–132 project portfolio management (PPM) ABM use, 101–106, 181–182 tools, two-by-two matrix, 102 tools, pair-wise ranking, 103 tools, balanced scorecard ranking, 103–104 tools, portfolio ranking tool, 105–106 project management delivery process, 89–90, 180–181 prioritization, 86, 181–182 quality cost of quality (COQ), 64–65 total quality management (TQM), 8, 64 rates actual, 35 chargeback, 34 expected, 39–40 incentive and disincentive, 46–47 standard, 35–39 red bead experiment, 166 reporting management, 27–33 online analytical processing (OLAP), 70, 79–81 residuals determination, 49–50 overcorrection, 50–52 timing, 50–52 resources cost pools, definition, 2–4 drivers, hierarchy, 66–68 revenues, 107 Royal Bank of Canada, scope of ABC/M system, 15–17, 84 scorecard, balanced, 103–104 shared services chargeback billing systems, 27 costing, 121–142 INDEX information technology model, 129–137 driving costs, 24–27 shareholder value, 6–7, 91, 174–176 six sigma background 13–14, 64–65, 170 DMAIC, 14 SIPOC, 13 software ABC modeling, 69 Ab Initio, 69–70 Cognos, 70 extract, transform and load (ETL), 69 Hyperion, 70 Informatica, 69–70 metadata management, 70 Metify, 69 Microsoft, 70 OLAP, 70 Razza, 70 J 199 reporting, 70 SAS ABM, 69 stakeholders action plan, 152–153 assessment, 149–151 tasks, time studies, 60–61 traditional costing methods, versus ABC, 5–7 transparency, reporting, 31, 164 total quality management (TQM), 8, 14, 64 unit costs, 34–40 unused capacity assigning, 35–39 budgeting, 35–39 modeling attribute, 66 value, driving, 6–7, 107–113, 174–176 Praise for Activity-Based Management for Financial Institutions Driving Bottom-Line Results “Brent’s book astutely addresses the common struggles of ABC/M value realization The issues are seldom the design, but the implementation of ABM and a well-planned organizational change management discipline to drive sustainable change and business benefit Activity-Based Management for Financial Institutions is a must-read for practitioners trying to maximize the value of ABC/M—regardless of the industry.” —Allen Friedman, President, Americas, Celerant Consulting “Activity-Based Management for Financial Institutions puts the emphasis of ABC/M where it belongs—on shareholder value Brent’s methods for driving change within organizations work I have personally witnessed millions of dollars in benefits as a result of using the organizational change process detailed in this book For those people seeking to really make a difference using ABC/M, read this book!” —Jeffrey Kelly, CFO, RenaissanceRe Holdings Ltd., former vice chairman, National City Corporation Evaluate your institution’s processes and improve its decision-making and its bottom line— all through Activity-Based Management (ABM) Turn to Activity-Based Management for Financial Institutions: Driving Bottom-Line Results for cutting-edge guidance about: • • • • • • • • • • Costing, chargeback, and pricing Bank branch profitability Implementing activity-based costing (ABC) Implementing ABM Structuring your organization and process for success ABC/M in shared services Managing organizational change The importance of organizational change management Avoiding the pitfalls: lessons learned Beyond ABM Designed to help you actually drive bottom-line results—rather than help you make the most technically sophisticated ABC model—Activity-Based Management for Financial Institutions: Driving Bottom-Line Results is filled with the templates, tools, and techniques that work to improve your odds of a successful ABC/M implementation Delivering valuable lessons for any financial institution thinking about ABM, about to start ABM, or even recovering from a failure with ABM, author and industry leader Brent Bahnub draws from his years of experience to show you what works and what doesn’t The Wiley and SAS Business Series presents books that help senior-level managers with their critical management decisions