Cost & Profit Modeling
Our approach to Cost & Profit modeling begins with a focus on decisions—and the information you need to make them. Task 1 of every project is to develop consensus on what question(s) we are to answer.
A project then proceeds with a business process analysis. Through a series of facilitated discussions with individuals from every discipline, we develop a process-based model of your organization that:
- Identifies activities at the relevant level of detail;
- Traces the resources (costs) consumed by each activity; and
- Identifies the goods and services produced by each activity.
With this model we calculate a “cost per output” for each activity. These values are used to create the focused cost information needed to make the specific decisions you've identified.
Cost Modeling at Mn/DOT
The firm was engaged by the Minnesota Department of Transportation to develop an process-based model of its Program Support Group. A series of process-based cost models and documentation were developed to support the management needs of Program Support offices. Process output measurements were developed. All of this combined to provide Mn/DOT the capability to compare themselves to inter-governmental and private industry benchmarks. As an agency, Mn/DOT could more accurately assess the level of service provided by engineering to the various Districts in support of both road maintenance and new highway construction.