Activity Analysis Extremely flexible allocation paths allow modelers to drive costs across models in new ways. Default assignments make modeling quick and easy, and powerful override features allow different paths to be defined in different responsibility centers, versions and periods. In those responsibility centers with highly repetitive activities, time-driven analysis can be applied, building up costs from individual transactions. Activity Analysis addresses the traditional barriers to implementing ABC by combining ALG Software’s experience and success in developing functionally rich ABC applications with the benefits of ALG’s Enterprise Performance Optimization (EPO) Suite. These benefits include web-deployment, process control and easy integration with the rest of the EPO applications. Activity-Based Costing (ABC) has been in use for more than two decades, earning a reputation as a valuable tool for effective cost management and profitability optimization. For those who dismissed it first time around,ABC is now back on the corporate agenda, following an increasing realization that ABC is a critical piece in the decision-making framework of today's organizations. “ABC/M can help to reduce a company’s overall cost structure by as much as 3-5%... An enhanced focus on higher margin and growth products and the pursuit of better markets can translate to a 5% -15% increase in revenue.” Accenture CFO Project Vol. 2 Although it has demonstrated significant and tangible returns for organizations that have adopted it, others still view the methodology as “too complicated and time consuming.” Activity Analysis is a next-generation, web-based ABC application offering an easy solution to both these issues. Because it speeds up data collection and reporting, enterprises can replenish models more frequently, put reporting directly into the hands of users and make greater use of the ABC information. Activity Analysis offers a choice of allocation methodologies including time-driven ABC and is optimized for handling the large volumes of data encountered in transactional ABC.
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Activity Analysis
Extremely flexible allocation paths allow modelers to drivecosts across models in new ways. Default assignmentsmake modeling quick and easy, and powerful overridefeatures allow different paths to be defined in differentresponsibility centers, versions and periods. In thoseresponsibility centers with highly repetitive activities,time-driven analysis can be applied, building up costs fromindividual transactions.
Activity Analysis addresses the traditional barriers to implementing ABC by combining ALG Software’sexperience and success in developing functionally rich ABC applications with the benefits of ALG’s EnterprisePerformance Optimization (EPO) Suite. These benefitsinclude web-deployment, process control and easyintegration with the rest of the EPO applications.
Activity-Based Costing (ABC) has been in use for more than two decades, earning areputation as a valuable tool for effective cost management and profitability optimization.For those who dismissed it first time around,ABC is now back on the corporate agenda,following an increasing realization that ABC is a critical piece in the decision-makingframework of today's organizations.
“ABC/M can help to reduce a company’s overall cost structure by as much as 3 -5%... An enhanced focus
on higher margin and growth products and the pursuit of better markets can translate to a 5% - 15%
increase in revenue.”
Accenture CFO Project Vol. 2
Although it has demonstrated significant and tangible returns for organizations that have adopted it,
others still view the methodology as “too complicated and time consuming.”
Activity Analysis is a next-generation, web-based ABC application offering an easy solution to both
these issues. Because it speeds up data collection and reporting, enterprises can replenish models
more frequently, put reporting directly into the hands of users and make greater use of the ABC
information. Activity Analysis offers a choice of allocation methodologies including time-driven ABC
and is optimized for handling the large volumes of data encountered in transactional ABC.
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Activity Analysis offers a host of benefits over standard ABC applications:
Easy access for remote contributors and users, reducingthe time and effort usually involved in collecting non-system driver data.
Ability to process large volumes of transactional level information.
Easy administration, using EPO Work Manager.
Frequent updates to models, giving more timely results than ever before.
Integrated multi-dimensional analysis and reporting withweb books.
Easy integration with your existing IT infrastructure.
Enhanced Functionality
The calculation engine used in Activity Analysis is based onover a decade of experience in developing best-of-breedABC applications for the world’s leading organizations.Activity Analysis extends the best practice methodologydeveloped in ALG Software’s earlier ABC applications.This allows new users to take advantage of the years of development in the engine and ensures compatibility for existing users.
Web-based Interface - Activity Analysis can be deployed rapidly and cost effectively to contributorsthroughout an enterprise, across multiple sites andcountries, incorporating different languages and currencies.The application is not limited to just moving data around.It actually allows teams to run the client application in abrowser, interacting with the central data and each othervia the internet or corporate intranets.
Users access bespoke web books and reports through astandard web browser to input cost data and view theresults in dynamic charts and reports.
marketing
call center
logistics
sales
operations
executive
managers
board
Web deployment greatly reduces IT overhead, giving abroader range of employees access to important activity-based costing data without requiring installation of atraditional application on each user's desktop.
Any data updates are immediately available to all otherusers, both conventional and web-based, and the samebuilt-in security features apply in both environments.
Work Manager - The integrated Work Manager toolallows managers to control processes with the minimumof effort. The system automatically monitors progressagainst user-defined schedules to ensure that data isentered, validated and authorized on time. It can even beconfigured to issue automatic alerts to users and theirmanagers when deadlines are missed, helping managers toconcentrate on results rather than on the process.
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Revenue Dimension - The optional revenue dimensionallows EPO to handle multiple types of revenue, giving the application the ability to perform complex profitabilityanalysis.
Services Dimension - The optional services dimensionprovides the costing and cross-charging of shared services.Additional rules-based allocations and flexible optionsallow for cross-charging and cost recovery.
Driver Analysis - Sophisticated activity-based budgetingcan predict fixed and variable costs against each newscenario.
Scalability - Using a three-tier architecture, ActivityAnalysis can be scaled from a handful of users to literallythousands across an organization. Large volumes oftransactions are supported through efficient dataprocessing and calculation engines.
Model Management - Partitioning models by version,period or responsibility center helps optimize calculationperformance. Linking individual models using rulesprovides an enterprise view while allowing business unitsand functions local flexibility.
Systems Integration - EPO Data Bridge enables Activity Analysis to read data (via flat ASCII files) from any source, including general ledgers, ERP systems and data warehouses. EPO Data Bridge is optimized formanipulating the large volumes of data encountered intransactional ABC.
The MDX Connector provides a dynamic two-way exchangeof data between Activity Analysis and third-party reportingand analysis tools including Microsoft Excel, ProClarity and Cognos PowerPlay.
Ease of use
Quick and Easy Data Entry and Analysis Screens -Grid-based layouts with drag-and-drop functionality allowusers to analyze data in multiple dimensions.
Using the latest OLAP technology, Activity Analysis helpsusers to slice and dice, drill down and analyze data in anyway they wish, incorporating dynamic graphs and chartsquickly and easily.
Conditional Alerts - Managers can be emailed whenlimits are exceeded or other predefined conditions are met.
Uncompromised Modeling Capability - Extremelyflexible allocation paths allow modelers to drive costsacross models in new ways, including activity-to-activity re-assignments. Default assignments can be rapidly appliedacross an entire model but powerful override featuresmean that different paths can be defined in differentresponsibility centers, versions and periods.
Multi-Dimensionality in Activity Analysis - EPO’s multi-dimensionality means that costs can be allocatedacross the in-built dimensions, and data can be quickly andeasily consolidated into different views according to itsattributes. Activity Analysis has three cost objectdimensions, typically Product, Customer and Channel.Additional cost object dimensions are available fororganizations that want to analyze their cost objects infour or five dimensions. Version and Period dimensionsallow users to view cost or profit information by anycombination of periods and provide variance analysis.Work sheets provide an additional area to perform ad-hocdata manipulation outside the existing dimensions.
Benefits of Multi-Dimensionality Include:
Multi-dimensional analysis across a maximum of five cost object dimensions without maintenance-intensiveworkarounds.
Accurate assignment of costs to more than one costobject view at a time.
Presentation of any combination in a single, multi-dimensional view, from a choice of perspectives.
Rules in Activity Analysis - Activity Analysis uses a setof user-defined rules to provide greater flexibility.Driver rules allow the user to create new drivers from anyother data values held in the EPO database. Line item rulesallow the user to create Line Item Values. For example,salaries could consist of an annual basic rate, plus apercentage commission. Rules also allow the user to selectwhich Version or Period to work with and to applyweightings to the Resource Drivers using driver splits.
Multiple ABC Methodologies - Activity Analysis iscapable of handling different ABC methodologies including time-driven ABC, where activity cycle times areused to build up costs from individual transactions.Time-driven ABC is often used when responsibility centers have highly repetitive activities. Activity Analysisincludes a driver rule wizard to help model builders quickly build rules for time-driven ABC.
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Swift Deployment - Book designers can create templatesfor data entry and reporting quickly and easily. One EPOweb book can automatically satisfy the needs of multiple users.
Integrated Analysis - The Formula Editor means thatsimple calculations can be added to reports, precluding the need to export the data to an external tool formanipulation and analysis.
Reporting helps users design management reports that canbe scheduled to run periodically and converted to PDF formanagement reports, board packs and other paper-basedrequirements.
Powerful Security and Control Mechanisms - Usersare only allowed to review and update areas of the systemfor which they are responsible. Audit features can beselectively turned on to track changes to individual data cells.
Activity Analysis provides user-defined traceability of costback through even the most complex re-allocations.
Best-Practice Database Design and MemoryManagement ensures that Activity Analysis can handlelarge volumes of data.
International Languages are handled easily, enablingusers to dynamically change languages and see themapplied in real-time.
The Currency Conversion Facility allows data to beinput in local currency and converted into a commoncurrency on consolidation.
Ease of Maintenance allows users to add a new productmanually or electronically, and it automatically inherits theactivity assignments and cost drivers defined for its group.
Change a department’s name in one place and all otherreferences to that department are automatically madethroughout the model. It’s that easy.
State of the Art User Interface designed using thefamiliar Microsoft Windows® and Office® look and feelmeans that users configure their own workspace in a waythat suits them.
Navigator allows you to define your own clickablemenus, using whatever images you like to create hotspotsthat link to any screen, report, or other function.
You can use Navigator to show connections betweenfeatures, to define menus branded with your owncorporate images, or to provide simplified navigation fornovice users.
EPO Web Books - input data, analyze results and view reports on-line
©2006 Armstrong Laing Group trading as ALG Software.All rights reserved.
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