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Acorn Capability and Value
Shared Service Costing and Benchmarking is comprised of 3 processes:
1. The shared service organization calculates the cost of products and services they provide to business units (their customers), as well as the cost and resource consumption of each process-activity-output by shared service location.
2. Shared service creates an invoice or “chargeback” of the costs to the internal business units for a full recovery of their costs. Typically, shared service costing and chargeback is a zero-sum game. All costs consumed by the shared service organization are charged back to internal business units as a cost to them. This is typically stated as moving costs “back -to-front” or “mid-to-front”, referring to business offices within the organization.
3. Shared services benchmarks their cost and efficiency by process and by activity both internally (location-by-location) and externally (with best-in-class providers) to determine areas of improvement.
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Our Experience Reveals That Typically
• Cumbersome, manual systems for cost allocation are common, even in companies with large annual IT spends (>$500M). The most common costing methodology is allocation based, to create a standard unit cost.
• Finance within shared service is challenged in its attempt to calculate accurate chargebacks by product/service based on what each business unit actually consumes, in a timely and efficient manner.
• The business unit “customers” who receive the shared service chargeback have little-to-no transparency into why their “invoice” is what it is – and no real insight into the cost breakdown by product/service. The result is an often-times adversarial, costly, and inefficient environment between shared service and the business.
• The process between the business unit and shared service to “price” future volumes (forecasts) for shared services is a manually intensive and time consuming process for both IT and the business.
Acorn Capability |
Value to You |
| Enterprise-Wide Costing Solution. Un-paralleled scalability to perform cost calculations for every product and service that IT “produces” - inside Acorn’s application – and in a short time period. |
Insight reflects true variability in “cost-to-serve” each customer based on the products and services they use, and the resources you consume. Your insight is ready when you need it.
Integrate your costing and “chargeback” process with your planning and forecasting processes – to create a closed-loop performance management solution creating transparency and efficiency between shared services and the business.
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| Unified Model. All your costs are in one place. A unified model links products and services you provide to the other critical dimensions of your business (customer, business unit, etc.) |
There is one model, one system to charge for everything you do. |
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| Cost Transparency. Leverage the range of methodologies Acorn’s application supports to create the detail and accuracy you need for full cost transparency. |
Produce a detailed bill of charges to internal clients with cost transparency.
• Supports informed business conversations with clients
• Gives clients with the information they need to reduce costs
• Supports GL close process
Enables activity-based budgeting.
You can use time-driven ABC to add additional power, by providing capacity and costs analysis for head-count driven activity.
Use your cost and capacity insight to perform benchmarking by process , product and location.
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| Low Total Cost of Ownership. Acorn’s solution automates the cost calculation and chargeback process, eliminating manual processes. Further, Acorn’s solution runs on industry standard hardware/software, eliminating costly proprietary systems costs. |
Lower annual cost-of-ownership to maintain and produce shared service cost and chargebacks.
Fewer models to maintain and link together using 3rd party applications means a lower TCO for you.
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| Domain Expertise: Acorn’s solution for shared services costing and chargeback is used by some of the world’s largest organizations. Our people are experts in this domain, and our knowledge is available to you via best practice and functional accelerators. |
Lowers your risk and ensures your success – on time, on scope, and on budget. |
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