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APPENDIX D: Revised Cost Accounting Methodology and
Prototype
Consultancy ProjectFinal Report
14 May, 2004
Contents
• Overview of cost-accounting methodology
• Recommendations:– 2.1/2.2. Define Outputs
– 2.3. Introduce time tracking
– 2.4. Introduce Service Delivery Reporting (SDR) based on Service Level Agreements (SLAs)
– 2.5. ‘’Loaded Costs”
– 2.6 IT solutions to support the revised cost accounting
• Cost-accounting prototype
For definition of terminology see Appendix A
Contents Appendix page ref.
2
11
13
20
32
36
42
1
2
Overview of cost-accounting methodology
The revised financial management systems strengthens the linkages between planning, budgeting, accounting and reporting
Revised Financial Management System
Service Level Agreements
Strategy/Operational
Planning
Financial and cost accounting*
Service Delivery Reporting
Results-Based Budgeting
Financial, results-based and other
reporting
* Includes time tracking, loaded cost etc.3
The key challenge is to make the linkage between resources and results more direct, transparent and accurate
Three basic options for planning and cost
accountingGeneral
Secretariat ITU-R ITU-T ITU-D Outputs
4
1. No direct linkage: based on rough estimation
(current costing methodology)
2 . Project-based organisation: direct
organisational linkage between resources and
outputs
3. Time tracking and reporting: virtual linkage between resources and
outputs
With option 3 ITU will achieve a strong linkage between resources and outputs without a complete re-
organisation to a less attractive model
With option 3 ITU will achieve a strong linkage between resources and outputs without a complete re-
organisation to a less attractive model
The revised cost accounting methodology creates a more direct, transparent and accurate link between costs and Outputs
5
Allocation method
TranslationTyping
Sales & Mktg, Publication, Conference Service
Legal, CEC & SPU
SGOConference Mgt
Rest of Common Services Personnel
Information ServicesFinance
Structure
Gen
eral
Sec
reta
riat
Bur
eaux
LogisticsLibrary & Archiving
Personnel & Social ProtectionFinance
SGO (including Legal)CEC & SPU
Conference Services (including translation & typing)
Information ServicesCommon Services
(sales/mktg, pub., print/dispatch)
Outputs
Intersectoral
BDT
BR
TSB
12 Outputs 7 new outputs
added
Improved cost accounting to outputs
16 Outputs 3 new outputs added for SNF
12 Outputs
18 Outputs 1 new Output
Current Revised
‘Direct’
Forecast Annual Survey
Service Delivery Reporting
Driver –revenue & budget based
Weekly Time SurveyDriver –Post Count ‘Loaded’ Cost: Driver –
Post Count
BR
BDT
TSB
BR
BDT
TSB
Driver – Post Count
• Staff: Weekly Time Survey
• Mgt: Prorated on staff time
• Staff: Annual forecast Survey
• Mgt: Prorated on staff time
Allocation methodStructure
Summary assessment of revised costing methodology against goals
Increase of up 50%
Impact of revised costing methodology Steps leading to improvement
• ‘Delivery reporting’ on more GS services• More sector services tracked to outputs
Criteria
Direct Share of cost base
Low
Medium
High
6
• More frequent time recording• Greater consistency in tools and business
practices• Loading of costs
Accuracy
• Shared terminology• Time recording to activities• Processes and tools shared across ITU• Actual costs will be known for more activities
• Complexity increases as greater share is allocated on use of service
• But enhanced logic and consistency
Complexity
• All staff members will do timesheets• Business processes and tools will limit
added workload• Should be traded off against discontent
with current practices
Workload
Transparency
Clear improvement
Clear improvement
Increased complexity
Increased workload
Proposed steps will improve accuracy and transparency of costing
Proposed Steps
• In General Secretariat:– Increased use of internal invoicing (i.e. Conference Department, activities in
Information Services and Common Services)– Carving out activities directly related to outputs (i.e. Training, Finance working for
Satellite Network Filing, etc.) • In Sectors:
– Staff to record time to activities and determine when to cost activities to outputs
Recommendation
• Making a greater share of cost base direct
• Improved methodology for ‘internal invoicing’
• Application of improved and consistent methodology for service level agreements and service delivery reporting to Outputs
• Greater accuracy in forecasting & recording time
• Increased frequency and depth of time tracking • Introduction of improved business processes and tools
• Loading costs • Allocating Logistics costs and Personnel costs across the organization, prior to allocation of GS costs
• Increasing amount of General Secretariat costs not allocated
• Assess GS activities and determine which should not be allocated across the organization
7
Some additional GS items should be classified as Intersectoral Outputs and should not be allocated to the sectors
Unallocated General Secretariat Costs
Some GS activities are deemed as Intersectoral Outputs are not currently reallocated:
• Plenipotentiary Conference• World Telecom. Policy Forum• World Summit on Information Society• Council & Working Groups• GMPCS-MoU
The following have been identified as new Intersectoral Outputs, and so would not be reallocated to the sectors include:
• New Initiatives Programme• ITU News• Governance (CoCo)• TELECOM (already extra budgetary, but separating it out will ensure all
costs for work preformed will be allocated to TELECOM)
Some activities within the GS department solely focus on these intersectoralitems and should not be reallocated – once the departments have detailed
their top 5-15 tasks it will be easier to determine if all/some of their activities relate to intersectoral outputs and should not be allocated across the bureaux
8
In the proposed revision we have taken a number of steps to balance workload and complexity
Pro
• Easier to implement and maintain
• Less time consuming, requires less data compilation
• Allows to go into detail only when advantageous to do so
• Less time consuming
• Easy
• Less time consuming
• More precise
Possible Steps
• Limit the number of outputs and activities
• Limit the number of staff doing time surveys
• Target to product/department –differentiate when appropriate
• Measure on less than a daily basis
• Use a proxy driver to track costs to outputs
• Do not track costs to individual/ customer level
• Break out targeted special initiatives/projects
Con
• Less transparent
• Provides less precise tracking of time
• More complex; not uniform across ITU
• Less precise
• Less precise
• Do not know the cost of individual end product
• More effort required
9
10
Recommendations
11
Recommendation 2.1/2.2 Define Outputs
Summary of ITU Outputs – will require detailed revision by all Bureaux if our Recommendations are adopted by Council
ITU-R
1. Coordinate Member States and Sector Members in their decision making
2. Publish and distribute info material and results of studies and MS/SM deliberations
3. Perform projects and processes necessary to achieving the Sector mission
4. Promote the Sector & coordinate liaison with other bureaux
• World Radio Conf.• Regional Radio Confs• Radio Regs Bd meetgs• RAG meetings• Study Group meetings• Seminars
• ITU-R recommendations and manuals
• ITU-R regulatory publications
• Other ITU-R publications
• SNF Notifications• SNF Coordination• SNF Advance
Publication• Other space services• Notices for terrestrial
services• Other terrestrial
services
• General assistance, external co-operation and internal liaison
ITU-T ITU-D Inter-sectoral
• WTSA• Regional consultation
sessions• TSAG• Study Group meetings• Seminars
• ITU-T recommendations
• ITU-T operational bulletin
• Other ITU-T publications
• Databases accessible to the public
• UIFN registration• UIPRN/UIS CN
registration
• General assistance, external co-operation and internal liaison
Sector objectives
• WTDC• Preparatory meeting
for WTDC• TDAG• Study Group meetings
• ITU-D publications
• Plenipotentiary• WTPF• WSIS• Council &
Working Groups• GMPCS-MoU
• GS publications• ITU News
• Governance through CoCo
• New initiatives program
• Retirees• Telecom
• General assistance, external co-operation and internal liaison
• Regulatory reform• Technologies and
Telecom network dev’t• E-strategies & e-services• Economics & finance• Human capacity-building• Special program for LDCs• Statistics & info on ICT• Special Initiatives (x4)• Regional initiatives
• General assistance, external co-operation and internal liaison
-12
13
Recommendation 2.3 Introduce Time Tracking
Increasing the frequency/depth of time tracking will increase accuracy and transparency
New Standards for Time Tracking
Frequency
Electronic
Consistency
Training
Comprehensive
• Weekly if recording time to outputs• Quarterly if tracking time to activity that are not costed directly to an output• Ongoing tracking where Service Delivery Reporting is applied to track
actual resource use to sectors and outputs
• The time tracking needs to be electronic – this will help ensure that increasing the frequency and depth of tracking will not be more cumbersome
• Business processes should be consistent, simple and practical
• Staff should understand why they are filling out the time surveys, what they used for and the impact of discrepancies in their estimates
• Policies should be in place to ensure that data is collected from all staff members and to deal with any missing data
14
Who will do Time Tracking - General Secretariat
Tracking Time to Outputs Frequency Tracking Time to Activities1Group Frequency
SGO Yes YesWeekly ? Quarterly
CEC & SPU Yes QuarterlyWeekly ?Yes
Personnel Yes QuarterlyN/ANo
Finance Yes QuarterlyN/ANo (occasional)
Common Services
Logistics Services
Library & Archiving
15
Yes QuarterlyN/ANo
Yes QuarterlyN/ANo
Staff working directly on outputs under cost recovery will track
their time to activities on a weekly basis
Staff working directly on outputs under cost recovery will track
their time to activities on a weekly basis
Conference Services, Information Services and part of Common Services (Production of Publication, Sales & Marketing, and Printing & Dispatch) will use Service Level Agreements and Service Delivery Reporting
Note: 1) Time will be tracked quarterly to top 5-15 activities
Who will do Time Tracking - Sectors (org. units are illustrative)
Tracking Time to Outputs FrequencyWho Tracking Time to Activities1 FrequencyBR:
Space NoticesTerrestrialSoftware DevelopmentStudy Groups
QuarterlyQuarterlyQuarterlyQuarterly
YesYesYesYes
WeeklyWeeklyWeeklyWeekly
YesYesYesYes
TSB:
PromotionEDHSoftware DevelopmentProject Management
16
YesYesYesYes
QuarterlyQuarterlyQuarterlyQuarterly
YesYesYesYes
WeeklyWeeklyWeeklyWeekly
BDT:
Regulatory ReformE-strategiesHuman capacity buildingSpecial Initiatives
WeeklyWeeklyWeekly
Weekly
QuarterlyQuarterlyQuarterly
Quarterly
YesYesYes
Yes
YesYesYes
Yes
Staff working directly on outputs under cost recovery will track
their time to activities on a weekly basis
Staff working directly on outputs under cost recovery will track
their time to activities on a weekly basis
Note: 1) Time will be tracked quarterly to top 5-15 activities
Proposed roles and frequency in time tracking across sectors and GS
Tracking Time to…
Outputs (where applicable) ActivitiesFrequencyRole Frequency
Professional staff
…
General Service staff
• Time surveys • Track time to top 5-15 activities
• Weekly
• Quarterly• Track time to top 5-15 activities
• Quarterly
• Weekly• Time surveys
• In select cases for administrative assistants, option to prorate based on professional colleague time
Elected Officials
• No
• Time allocated to ‘Governance through CoCo’
• N/A
Senior Management(Heads of GS Departments and Sector Deputies)
• Prorated based on Department staff time surveys
• Track time to top 5-15 activities
• N/A • Quarterly
• No • N/A
17
Discussion: some of the challenges in implementing revised cost accounting procedures in ITU
Key challenges
• Choosing the most appropriate method for measuring staff time (proportional or cumulative time)
• Reporting on indirect activities such as training and administrative time (‘cleaning up’, expense reporting, time tracking, miscellaneous)
• Limiting ‘residuals’, ie. time reported to administrative/misc. category rather than directly to specific output or activity
• Designating appropriate roles
• Guarding confidentiality
• Limiting workload
Recommendation
• Allocate as percentage of time (standard 8 hours)• Find simple, straightforward way to account for part-time
• Make available categories for Administrative time (expense report, time tracking, miscellaneous)
• Cap targets set for administrative/misc.• Use exception reporting to highlight problems
• Guidelines and supervisor monitoring, but no approvals• Finance Dept. and sector controllers will manage system
• Staff to own; supervisor to own staff; all to dept. aggregates
• Time-sheets user-friendly ‘3-5 minute’ design18
19
Recommendation 2.4Introduce Service Delivery Reporting based on Service Level Agreements
Service Level Agreement (SLA) and Service Delivery Reporting (SDR) Process
SLA and SDR Process
SLASLA Results-Based BudgetResults-Based Budget
SDRSDR
Quarterly and annual
reporting
Quarterly and annual
reporting
Goals of the SLA / SDR process
• Improved forecasting and planning of shared services
• More accurate and transparent allocation of costs to outputs
• Increased accountability on the part of services providers
• Increased sensitivity to costs and enhanced sense of ownership on part of users
20
Some basic facts about the proposed use of SLAs and SDRs
21
… but they will not
• Change the structure of budget allocations between sectors and the General Secretariat
• Involve actual transfers of funds between departments
• Change the current framework of budget controls
• Require organisational changes
SLAs do
• Place greater emphasis on forecasting and prioritizing of the use of services
• Enable end-users to be more involved in the up-front decision-making process
• Create an agreement between the service department and it’s users
• Track fluctuation in demand/consumption of services across Outputs
• Use standard rates, which enables:• Better planning of utilisation of
services• Variance analysis between standard &
actual rate• Invoicing department to benchmark
itself to own performance over time as well as to external providers
The SLA process: step-by-step
SLA/SDR process
Service Department creates a ‘service
catalogue’ and sets standard prices1
Service dep’t & units create SLA (prior to
setting biennial budget)
Service dep’t records use of
services to Outputs
as consumed
On-demand access to SDR
& monthly reporting to units
Variance analysis
Revise as needed
On demand access and monthly reporting will allow continual monitoring of costsOn demand access and monthly reporting will allow continual monitoring of costs
Note: 1) Costs are ‘fully loaded’; ie. they include costs of salaries for staff directly working on activity, planned expenditure, portion of dept. management time, as well as portion of the logistics, library and archiving and personnel costs attributed to the unit
22
Proposed use of SLA/SDR from the beginning: the largest GS service groups
Services (to be refined)Department
23
• Conference Services
• Translation Services
• Trans/Typing – Arabic, Chinese, Russian
• Document Composition
• Quickpub
Conference Department
Information Services Department
Common Services Department
• Production of Publications
• Sales & Marketing
• Printing & Dispatch
• Network services
• User Services
• Database & Application Services
• Administrative & Managerial (ERP) Application Services
• Project Management
Detailed design issues
• Use of drivers other than staff time• Level of granularity in reporting to specific outputs• Other service groups in GS / sectors that would benefit from SLA/SDR• Lessons learned from IS Dept. service management work and previous internal invoicing experience at ITU
Example template: Service Level AgreementSERVICE LEVEL AGREEMENT FOR THE ‘ABC’ SERVICE FOR ‘DEF’ PERIOD This agreement is made between……………………………………….. and…………………………………………………. The agreement covers the provision and support of the ABC services which….. (brief service description). This agreement remains valid until superseded by a revised agreement mutually endorsed by the signatoriesbelow. The agreement will be reviewed annually. Minor changes may be recorded on the form at the end of the agreement, providing they are mutually endorsed by the two parties. Signatories: Name…………………………………. Position………………………. Date …………… Name…………………………………. Position………………………. Date …………… Details of previous amendments: Service Description: The ABC Service consists of …. (fuller description to include key business functions, deliverables and allrelevant information to describe the service and its scale, impact and priority for the business) Service Hours/Availability: Reliability: Service Performance: Charging (if applicable): Service Reviews: Glossary: Amendment Sheet:
• SLA will initially be prepared in a Word template
• Will also include forecast schedule of allocation of services to individual outputs (volumes and CHF)
• Axios, ITU’s off-the-self service management tool, will be assessed to see whether it can support SLAs
24
The SDR process: step-by-step
Service Delivery Reporting process
• Service Delivery department tracks time and effort to Outputs asservices are consumed
• End-users of services have on-demand access to reports detailing consumption of services, and the resulting allocation of costs
• Monthly reports will also be sent to end-users, including variance analysis
• Regular joint reviews will be held to revise forecast targets
25
One benefit of the new system is to contain the “element of surprise” when variances are passed on to sector and intersectoral outputs at end of period
Current Situation – Translation Unit
Planning Period ExampleTSB Study Group5,000 pages translated in French in 2004/05
Estimate # of translated pages, across all Outputs for biennium
GS
BR
TSB
BDT
Translation Unit
26
Actual
Based on estimated demand & capacity, rates are set for the various services
Rates used to estimate costs in the budget
At year-end finance allocates the actual cost of the unit by actual services rendered (i.e. actual translation costs across the number of pages translated)
2
Cost perpage
Forecast # of Pages
Cost of French Translators
Discrepancy –CHF 110,000
50,000 CHF 100CHF 5M
1
3TSB Budget is charged CHF 500,000(5,000 pages * CHF100) Implications
• Limited accountability for variance
• Limited incentive for gain efficiencies
4
GS
BR
TSB
BDT
Translation Unit
Cost perpage
Actual # of Pages
Cost of French Translators
41,000 CHF 122CHF 5M
TSB Budget is charged CHF 610,000(5,000 pages * CHF122)
The revised methodology will also simplify handling of variable and fixed costs (translation/typing)
Today
Service ConsumptionPlanning
Department/Bureaux
• Determine internal capacity and need for external service providers to cover excess
• ‘Invoice’ Unit/bureaux for variable cost based on the standard rate
• Perform quarterly reconciliation between standard rate charged & actual
• Estimate translation/ typing volume needed
Conference Services
Finance Department • Sets standard rates for Fixed & Variable costs
• Use Fixed capacity first• Hires external service providers to cover
excess demand as needed
Department/Bureaux
• Variable costs (cost of external service providers) comes from Bureaux budget
• No changes to the decentralization of budget • SLAs is a tool to plan volume of services• SDR is a method to track consumption of services• Actual cost recorded – no reconciliation required• On demand access and monthly reporting to detail Fixed and Variable costs
Under the Revised Methodology
27
Discussion: some of the challenges in implementing SLA / SDR procedures in ITU
Key challenges
• Same issues as for time tracking discussed under cost accounting
• Need to reach agreement on SLAs and revision of targets during reporting period
• Access / confidentiality
• Handling of variance to limit end-of-period surprises
• Handling capital expenditure
Recommendation
• Similar approaches to time tracking
• Maintain realistic links to operational plans and budget• Shared commitment to reach reasonable service levels• No veto-power for users on planning and revision of targets• Finance department and sector controllers as final arbiters
• Restricted access to individual staff reporting• Open access to aggregate reporting to outputs• On-line access followed up by monthly reports
• Standard rates calculated with regular intervals (eg. quarterly)• Open process of ’workload smoothening’ over periods with fluctuations to
avoid adverse effects on staffing levels
• Do not depreciate capital expenditure to ensure that the financial and results-based budget reconcile
28
29
Recommendation 2.5‘Loaded Costs’
Loading costs to all GS departments will more accurately reflect costs
Issue with Current “Direct Method”
• Many GS services are only allocated to Inter-sectoral“Activities” and to the Bureaux
• Does not take into account services rendered to other GS departments
• If use of GS services proportionally differs from the distribution based on post count, there will be inaccuracies
• This is likely the case in several instances (such as documentation, conference services, legal, SPU, etc.)
“Step-down Allocation” Will Address This Problem
• Costs of service departments are allocated across GS departments (before being allocated), Inter-sectoral outputs and to the Bureaux
• Selected GS services costs are allocated across ITU – then the fully loaded GS costs are allocated to outputs on the basis of their consumption of services
It is Proposed to use this Method for Several Cost Categories
• Logistics Costs allocated across all GS departments, bureaux, and outputs
• Personnel Costs allocated across all GS departments, bureaux, and outputs
• Information Services Costs across all remaining GS departments, the bureaux, and all outputs
30
Example of what loaded costs will look like
Cost Allocation
Unallocated (Intersectoral)
Internally Invoiced
General Secretariat Costs
Plen.ConferenceWorld Tel. Policy Form WSISCouncil & Work GroupGMPCS-MoUGS PublicationITU News
Finance
Conference Services
Common ServicesDocument/Translat
Bureaux
Logistics
Personnel
Library & Apartment
Step Allocation (Loaded Costs)
Output - SNFBR
Bureau ‘overhead’(director, controller, GS finance, General IS, etc.)
Output- Seminars
Output –Publications
BDT Output –Reg. Reform
Output –Study GroupsTSB Output - UIFN
TELECOM
Planned ExpenseDocumentationDirect Salary Costs
Planned ExpenseDocumentationDirect Salary Costs
Planned ExpenseDocumentationDirect Salary Costs
Planned ExpenseDocumentationDirect Salary Costs
Planned ExpenseDocumentationDirect Salary Costs
Planned ExpenseDocumentationDirect Salary Costs
Direct Costs
1
2
Bureau ‘overhead’(director, controller, GS finance, General IS, etc.)
Bureau ‘overhead’(director, controller, GS finance, General IS, etc.)
Information Services
Reallocated
General Assistance
GovernanceNew Initiatives ProgramRetireesTELECOM
3
SGOCEC & SPU
31
Example of what loaded costs will look like(L) = Logistics Services(P) = Personnel (L/A) = Library & ArchivingGeneral Secretariat Departments (CHF 000)
Logistics (“L”) 22,155
Step
Allo
catio
n (L
oade
d C
osts
)Step 1 TELECOM 642 (L) + 355 (P) + 57 (L/A) = 1,054 ’Loaded Costs’Allocate to all units across ITU, including TELECOM
Personnel (“P”) 11,078 + 765 (L) = 11,843Step 2
32
Bureau
To be allocated to units within the Bureaux
Common Services 31,427 + 2,868 (L) + 1,587 (P) +255 (L/A) = 36,137
Conference Services 37,981 + 3,032 (L) + 1,678 (P) + 270 (L/A) = 42,961
Finance 8,503 + 762 (L) + 421 (P) + 67 (L/A) = 9,753
IS 26,644 + 1,491 (L) + 826 (P) + 133 (L/A) = 29,094
SGO 7,165 + 511 (L) + 282 (P) + 45 (L/A) = 8,003
CEC & SPU 10,399 + 838 (L) + 464 (P) + 74 (L/A) = 11,775
Allocate to all units across ITU, including TELECOM (except Logistics Services)
Step 3
Invoice ‘fully loaded’ costs based on consumption to Finance, SGO, CEC/SPU, TELECOM, Bureau mgt & all outputs (GS & Bureau)
Serv
ice
Del
iver
y R
epor
ting
Allo
cate
d
BR 5,564 (L) + 3,081(P) + 495 (L/A) = 9,140 ’Loaded Costs’
Library & Archiving (“L/A”) 1,629 + 167 (L) + 93 (P) = 1,889Step 2
Allocate to all units across ITU, including TELECOM (except Logistics Services and Personnel) TSB 2,087 (L) + 1,155 (P) + 186 (L/A) = 3,428 ’Loaded Costs’
To be allocated to units within the Bureaux
BDT 3,431 (L) + 1,900 (P) + 305 (L/A) = 5,636 ’Loaded Costs’
To be allocated to units within the Bureaux
All unit costs willbe tracked or allocated to
Outputs
Step 4
Allocate ‘fully loaded’ costs (based on cost driver) to TELECOM, Bureau mgt & all outputs (GS & Bureau)
33
Recommendation 2.6 IT solutions to support revised cost-accounting
Time Tracking - Tools
ITU Internal Web
34
My ITU
Click here
TIM ESHEET (Exam ple BR) Nam e: _______________________ Departm ent: __________________ Grade: _______________ Output: % of tim e 1 W orld Radiocom m unication Conference 2 Regional Radiocom m unication Conference 3 Radio Regu lation Board 4 Radiocom m unication Advisory G roup 5 S tudy Group M eeting 6 Sem inars 7 ITU-R recom m endations and m anuals 8 ITU-R-regulatory publications 9 ITU-R O ther publications Cost Recovery O utputs % of tim e 10 SNF - Advance Publication
i) Activity 1 ii) Activity 2 iii) Activity 3 iv) Activity 4 v) Activity 5
11 SNF - Coordination
i) Activity 1 ii) Activity 2 iii) Activity 3 vi) Activity 4 vii) Activity 5
12 SNF - Notifications 13 O ther space services 14 Notices for Terrestrial services 15 O ther terrestria l services 16 L ia ison w ith & support to developm ent activities 17 G eneral Support – m anagem ent Total (100% ): _________ E-signature of staff m em ber: _______________________ Date: ________________________ E-signature of supervisor: _______________________ Date: ________________________
Timesheet
My ITU
Latest news at ITU
ApplicationsTimesheetExpensesTraining
Timesheet
Goals is user-friendly SDR tool for recording use of services (illustrative)
Time Sheet Personnel ID: D41 RP5 811
Week 20 - 2004
Activity Sub activity Output Monday Tuesday Wednesday Thursday Friday Saturday Sunday
• Delivery of Services recorded by Output
• Account codes can distinguish between Fixed and Variable Costs
35
Overview of IT solution for Service Delivery Reporting
Web Timesheet
SAP R/3
HR Access
Other sources
DPS, other
Reporting (Service Delivery)
Initial SDR with SAP and / or Excel
SAP Business Warehouse
Business Explorer Analyzer
Eventually SDR
reporting with BW
Capturing Processing
36
How it all fits together (short-term solution)Application
Interface
Possible interface
37
SAP Business Warehouse
ITU staff
SAP R/3
Laptop
HR Access
Other applications
User Self Service
timesheet
1
1
2 2
2
3
3
The timesheet should be user friendly and web based (in either SAP or HR access, tbd)
SAP / HR access are the core administrative applications
SAP Business Warehouse is used as central storage of information
Note: SAP Business Warehouse and Cognos are not currently available to ITU, but they are examples of software tools that could be obtained through normal tendering processes
How it all fits together (with full SAP implementation)
Enterprise Portal
SAP Business Warehouse
ITU staff
SAP R/3
Laptop
HR Access
• time sheets, Travel req.
Other applications
ITU members
Application
Interface
Possible interface1
2 SAP Business Warehouse publishes updated reports (service delivery) in user specific portal or with workflow
The Employee Self Service Portal is used to do time sheet but also to do travel requests and training etc.
1
2
Note: SAP Business Warehouse and Cognos are not currently available to ITU, but they are examples of software tools that could be obtained through normal tendering processes
38
39
Cost-accounting prototype
Objectives of cost-accounting prototype
• Display the new cost-accounting methodology through a shell model in Excel
• Consolidate cost information into one Excel template, rather than having all of the data compiled in numerous files as is done today
• Reduce manual re-entry of data by linking cost-accounting data to SAP and HR Access
• Consolidate costs based on Output leading to increased transparency and accuracy of costs
• Increase the direct cost base through linking costs directly to Outputs
• Cost accounting prototype is contained in unpublished Excel model
• The prototype will be available to Council members during the 2004 Council and Dalberg will be available to demonstrate and answer questions about the prototype
40
Cost-accounting prototype inputs – Creating the Results-based Budget
To Create the Costing Information for the Results-based Budget
41
Required Inputs
• Post count
• Planned Expenditure
• Forecasted Timesheets (based on prior year time tracking adjusted for known differences)
• Outputs from Service Level Agreements
Purpose
• To calculate “loaded costs” of Logistics, Personnel and Library & Archiving
• To determine planned costs across each Output and/or department (GS & Bureaux)
• To link staff costs to Outputs across SGO, CEC & SPU, and the Bureaux; and to identify special projects to Outputs in Finance and Personnel
• To forecast consumption of services to Outputs for the following dep’ts: Conference Services, Information Services, and parts of Common Services (Production of Publication, Sales/Marketing, & Printing/Dispatch)
Source
• HR Access/SAP
• Electronic form stored filled out by GS and Bureaux; captured in SAP
• HR Access/SAP
• Electronic document stored in SAP
Cost-accounting prototype inputs – Maintaining the Results-based Budget
Ongoing Maintenance of the Costing information for the Result-based Budget
42
Required Inputs
• Actual Expenditure (related to Planned Expenditure)
• Actual Timesheets
• Service Delivery Reporting
Purpose
• To capture costs related to Outputs/departments on an ongoing basis as they occur
• To capture staff costs to Outputs on an ongoing basis
• To capture costs of services consumed at the Output and department level by service departments
Source
• SAP
• HR Access/SAP
• Detail in SAP, and eventually in SAP Business Warehouse
There are six main steps in the cost-accounting prototype
• Enter information on staff costs and planned expenditure on a per unit basis
• Load Logistic Services, Personnel and Library & Archiving costs across all of the units in the GS and bureaux (driver – post count)
• Allocate ‘loaded cost’ of general mgmt to the respective units they manage for Conference Services, Information Services & remainder of Common Services (all ‘service units to do SDR)
• Cost of these units are then allocated to specific Outputs and departments/bureaux based on the relevant Service Level Agreements and Service Delivery Reporting
• Allocate Finance costs of special projects to specific Outputs (based on projected time spent), with remaining costs being allocated to remaining General Secretariat departments and the Bureaux (driver – post count)
• Allocate costs of SGO and CEC & SPU to specific Outputs as relevant based on time tracking and the remaining costs to bureaux based on post count
• Allocate costs of the bureaux general mgmt to the units in the bureaux based on staff time tracking – costs of these units are then allocated to specific Outputs based on staff time tracking
Step One:
Step Two:
Step Three:
Step Four:
Step Five:
Step Six:
43
Steps: Cost-accounting prototype (1/6)
Enter information on staff costs (post count and grade level) and planned expenditure on a per unit basis
Step One:
Post count data is required across all units in ITUPlanned Expenditure is required across all units in ITU
Department: _________________
Unit: _____________________
Category of Expenditure
Staff costsOther staff costsTravel on dutyContractual servicesRental & maintenance of
premises & equip’tMaterial & suppliesAcquisition of premises,
furniture & equip’tPublic & internal service utilitiesAudit & inter-agency fees & Misc.
Total
CHF (000)
2 0 0 4 /2 0 0 5 D a ys M o n th s
G e n e ra l S e c re ta r ia t T e m p o ra ry P e rm a n e n tS G OO ff ic e o f th e S G & D S GL e g a l A ffa irs U n itIn te rn a l A u d ito rC ,E R ,C ,S P UC o o rd in a tio nE x te rn a l R e la t io n sC o m m u n ic a t io nS tra te g y & P o lic y U n itsC o n fe re n c e D e p tC o n fe re n c e M a n a g e m e n tC o n fe re n c e S e rv ic e sP la n n in g & C o n tro l S e rv ic e sT ra n s la t io n S e rv ic e sT ra n s /T yp - A ra b ic /C h in e s e /R u s s ia nD o c u m e n t C o m p o s it io n S e rv ic eQ u ic k p u b S e rv ic eC o m m o n S e rv ic e sC o m m o n S e rv ic e s M a n a g e m e n tP ro d u c t io n s o f P u b lic a t io n sS a le s & M a rk e t in gP rin t in g & D is p a tc hP la n n in g & C o m p u te r iz a t io n S e rv ic eL ib ra ry & A rc h iv e sL o g is tic s S e rv ic e sP e rs o n n e lP e rs o n n e l M a n a g e m e n tP e rs o n n e l A d m in is tra t io n D iv is io nH u m a n R e s o u rc e s D e v e lo p m e n tS o c ia l S e rv ic e sS ta ff C o u n c il S e c re ta r ia tIT U C e n tra lize d E xp e n d itu reF in a n c eF in a n c e M a n a g e m e n tB u d g e t-C o n tro l-C o s t A n a ly s isP a y ro ll S e rv ic eV o lu n ta ry F u n d s S e rv ic eA c c o u n ts D iv is io n (e xc e p t P a y ro ll)In fo rm a tio n S e rv ic e sIS M a n a g e m e n tN e tw o rk S e rv ic e sU s e r S e rv ic e sD a ta b a s e & A p p lic a tio n S e rv ic e sA d m in . & M g t (E R P ) A p p lic a tio n S e rv ic e sP ro je c t M a n a g e m e n tT o ta l G e n e ra l S e c re ta r ia t P o s t C o u n t
2 004 /2 00 5 D a ys M o n th sT e m p o rary P erm a n e n t
R ad io co m m u n ic a tio n B u re auN E E D T O D E F IN E U N IT SC on fe ren c esR ad io R e gs .R ad io A dv is ?S tud y G rou p - Inc ld? 40 55 C om m is s io n S tud y?
B R - D irec to rS tud y G rou pS S D (S pa c e S e rv ic es )S S D - A d va nc e P ub licS S D - C oo rd ina tionS S D - N o tif ic a tionT S D - T e rres te ria lO th e rT o ta l R ad io co m . B u rea u P o s t C o u n t
T e lec o m . S tan d a riz a tio n B u rea uN E E D T O D E F IN E U N IT SC on fe ren c esW o ld T e le c om A s s em b lyR eg io na l S e s s io nsG rou p C on s u lta if N o rm a lis aS tud y G rou ps ?
T S B - D irec to rA S E PS tud y G rou pU IF NT S O N , U IF N , U IP R N /U IS C NT o ta l T e lec o m . S tan d ard s P o s t C o u n t
T e lec o m . D e ve lo p m en t B u rea u N E E D T O D E F IN E U N IT SC on fe ren c eG rou p C on s u lta if D e ve lS tud y G rou p
B D T - D ire c to rA d m in - F in an c eO th e rP S FF O PIO ST o ta l T e lec o m . D e ve lo p m e n t P o s t C o u n t
T E L E C O M
ITU T O T AL P O S T C O U N T
44
Steps: Cost-accounting prototype (2/6)
Load Logistics, Personnel and Library & Archiving across all of the units in the GS and bureaux (driver – post count)
Steps Two:
‘Loaded’ Cost
Allocate
45
Conference Services- Unit A- Unit B
Common Services- Unit A- Unit B
SGO & DSG- Unit A- Unit BLogistic Services
22,155,000
Allocate to all units across ITU, including TELECOM
First General Secretariat
Information Services - Unit A- Unit B
CEC & SPU- Unit A- Unit B
Finance- Unit A- Unit B
Personnel & Social Protection 1
11,078,000
Allocate to all units across ITU, including TELECOM (except Logistics Services)
Second
Bureau Management Unit A Unit BBR
Library & Archiving
1,629,000
Third Allocate to all units across ITU, including TELECOM (except Logistics Services
Bureau Management
BDT Unit A Unit B
Bureau ManagementTSB Unit A Unit B
TELECOM
1) Excludes costs related to ITU Retired Employees, which is a new Output; any “special initiatives” related to Outputs should be directly costed to Outputs first prior to being loaded across the Union.
Steps: Cost-accounting prototype (3/6)
Steps Three: Allocate ‘loaded cost’ of general management to the respective units that they manage, for the following: Conference Services, Information Services (IS) and Common Services (remaining units are all ‘service units’ to do Service Delivery Reporting: Production of Publication, Printing & Dispatch, and Sales & Marketing)
46
Conference Mgt
Translation Services
Translation/ Typing -Arabic
-Chinese-Russian
Document Composition
Service
QuickpubService
Conference Services/
Planning & Control Service
Example – Conference Services Department
May want to allocate this cost across the
units as well
The costs of these units are then allocated to specific Outputs and departments/bureaux based on the relevant Service Level Agreements and Service Delivery Reporting
OutputOutputDepartment Output
Notes: 1) Allocate fixed costs of Translation and Typing to Outputs first prior to allocating variable costs (costs for short-term employees) – need to use different codes in SAP to indicate fixed and variable costs2) Some IS services (i.e. E-Mail maintenance) may be spread across the Union based on post count.
Steps: Cost-accounting prototype (4/6)
Allocate Finance costs of special projects to specific Outputs (based on projected time spent), with remaining costs being allocated to remaining General Secretariat departments and the Bureaux (driver – post count)
Steps Four:
Finance
General SecretariatOutput
TELECOMTSB BDTBR
SGO & DSG- Unit A- Unit B
• Unit A• Unit B
• Unit A• Unit B
CEC & SPU- Unit A- Unit B
• Unit A• Unit B
Output
47
Steps: Cost-accounting prototype (5/6)
Allocate costs of Secretary-General Office and Coordination, External Relation, Communication and Strategy & Policy Unit to specific Outputs as relevant based on timesheets and the remaining costs to bureaux based on post count
Steps Five:
Office of the Secretary General & Deputy Secretary General
Coordination, External Relations, Communication and Strategy & Policy Unit
External Relations Communication
48
CoordinationSGO Legal Strategy & Policy Unit
InternalAuditor
Output Output TELECOMTSB BDTBR
• Unit A• Unit B
• Unit A• Unit B
• Unit A• Unit B
Output Output
Steps: Cost-accounting prototype (6/6)
Allocate costs of the Bureaux management to the units in the Bureaux based on staff time tracking
Steps Six:
Example – TSB Bureau (org. units illustrative)
BureauxManagement
Promotion Software Development
Project ManagementEDH
The costs of these units are then allocated to specific Outputs based on staff time tracking
OutputOutput OutputOutput
49
Issues/Questions
Issues
• Classifying variable and fixed costs• Need to create list of variable and fixed costs and capture costs in this manner, both within
the prototype and within the SAP system (can code accounts differently to indicate variable versus fixed costs
50
We do not have the detail at the level we need to fill in the prototype – but it can serve as a guideline on what the cost-accounting methodology looks like