How can reengineering team use it?
Reengineering teams can use ABC to determine the cost and benefits associated with their reengineered processes and systems. This cost and benefit analysis will then become part of the overall business case for the project. An ABC approach will account for: • Activities / processes (comparing before and after the reengineering project) • The frequency and cost of the activity/process (comparing before and after the reengineering project) • The do-nothing scenario (what would happen if we do not do the project) • Which processes provide value (i.e. are needed to attract and retain customers, result in operational savings) An example of the steps needed to develop ABC data: • Define the major business processes and key activities of the organization (Process Map). • Trace operating costs and capital charges to key activities. Use existing accounting and financial data which includes labor and capital equipment expenses and any other resource that can be changed / eliminated. Some reports
