We cannot address organisational efficiency and effectiveness without touching on issues related to costing and pricing. Knowing exactly what we spend our money on, and what outcomes that investment delivers, is a notoriously difficult area.
Using this guide
This resource is not written by, or for, finance specialists and it does not purport to offer a comprehensive guide to the issues or a single step-by-step model solution. What it does attempt to do is to suggest how stepping back from the traditional cycle of activity and thinking about the processes in a different way may serve to help with some, seemingly intractable, problems.
Most of our readers will not be in a position to define a new financial ‘doctrine’ and apply it across their organisation. What we offer is a basis for starting a new type of dialogue about costs and benefits within your own sphere of influence.
These resources on costing may be of use to people developing the business case for a project, costing a project, looking at benefits realisation from projects and programmes, undertaking process improvement or looking at strategy development. In relation to all of these areas, an essential activity is analysing and planning for risk.
Determining 'value for money'
Costing risk is a specialised area with tried and tested approaches and formulae. Throughout this section on costing we use the term ‘customers’ to describe the stakeholders to whom you provide a service.
With customers wanting new and enhanced services and technology offering an increasingly varied means of delivering those services, we need to find robust ways of determining what constitutes value for money. This is particularly difficult when we do not have a good grasp of the cost of existing services and a clear evaluation of the benefits they deliver.
How can we tell whether a cloud solution, shared service or outsourcing offers advantages without a baseline against which to measure?