Activity Based Costing: A Key Weapon in the Cost Containment Wars
By Steve Murtagh, CATScan Product Manager
Activity-based costing (ABC) is a financially oriented analysis tool that examines any operation in terms of the specific tasks it performs, the resources which are consumed in executing those tasks, and the detailed costs of completing them. Because of its uniquely impressive ability to demystify a complex cost structure and significantly improve the quality of management decisions it has enjoyed a long history of success in the manufacturing and process control environments. Increasingly, contact center managers, directors and Chief Customer Officers are applying ABC concepts to their contact centers and customer facing operations to achieve breakthrough performance gains.
In an ABC analysis, your operation is defined by the detailed activities it performs and the many tasks which comprise each activity. ABC assigns costs to each task based on the resources that they consume and then produces a baseline financial view of the “business as usual” scenario. The result is a financial picture of the contact center that illuminates high-cost activities and tasks, suggests the most likely areas for changes and improvement, and helps predict the financial results of investments or process changes. Additionally, the baseline serves as a benchmark against which management can compare any potential process changes or investments, and measure actual results.
What can the ABC approach do for you?
Activity based costing is an essential tool that every contact center and customer support executive should have available. Click here for a free white paper containing more detailed information about ABC and how you can use it to address your most immediate issues.