Activity Based Management 2000: Best Practices in Shared Services and IT

Discover how activity-based management (ABM) allows managers to understand the cost to deliver a service and to communicate the cost of services and performance levels demanded by users in Activity Based Management 2000: Best Practices in Shared Services and IT.

KEY FINDINGS

Functions commonly included in shared service centers

• The essential element in the shared service center is the provision of a commonlyused service, such as accounts payable processing, by a single organizational entityfor two or more business units.

Service-level agreements and performance management

• The service-level agreement process is the foundation for performance managementand continuous improvement in a shared services environment. It is a learningprocess to reach common ground.

Charge-outs

• An effective method of charging out the costs of shared services to users is criticalto focus on cost reduction and long-term performance improvement.

Planning, budgeting, and capacity management

• Activity-based cost management information provides the foundation for morerobust planning, budgeting, and capacity management practices.

Outsourcing

• Outsourcing of potential shared service activities among our best-practiceorganizations is limited. Many important issues must be addressed whenconsidering an outsourcing arrangement.

Change management and training

• Training, change management, and effective ongoing communication are themost consistent and significant keys to success.

Performance management and compensation

• ABM information supports individual performance measures and compensationas part of the service-level agreement process.