What are the most challenging steps in the cost analysis process?
Of the six steps laid out in this toolkit, the first and fourth require the most thought. They are also the ones that generate the most insights. Ensure you invest sufficient time in Step 1 to come up with program definitions that make intuitive sense for your organization, as these will be the basis of your entire cost analysis and will determine how useful your analysis results end up being. Step 4 is often challenging because the concept of indirect cost allocation can be unfamiliar. In this step, pay particular attention to the concept of “cost drivers,” then use your knowledge of the organization to select the most meaningful ones. Reach out to other knowledgeable members of your staff if you feel unsure about a particular cost driver.
Related Questions
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