Government Costing
How do you improve mission success without adding more people? How do you manage costs “smarter” in the future? What will be your agency’s response on budget reductions?

These questions highlight high-impact opportunities that cover the full scope of the government value chain, from the supply chain, to internal people and activities, to program delivery, to citizens. We start by looking at the newest generation of cost management tools. Amongst the services that we can offer you are:

 

Full Cost Accounting for Government Services:

Measuring the cost of government services is useful for a variety of purposes, including performance measurement and benchmarking; setting user fees and charges; privatization; competition initiatives or “managed competition”; and activity-based costing and activity-based management.

 

We have in-depth experience in measuring the cost of government services through developing a policy on cost recovery through fees and charges and assessing how a service could be alternatively provided more efficiently. Several factors must be considered to ensure that cost data are used appropriately - ensured via our best-practice, industry leading and methodologies.

Structural cost management:

We help Government Agencies takes a broad, integrated view of the organization and the larger ecosystem. While traditional cost management tools typically focus on individual cost categories or processes, structural cost management seeks to optimize an agency’s portfolio of activities using strategic choices and demand management. Its goals are to enhance operating models and build new service delivery models.

This means looking at what—and where—agencies are spending their money (appropriated, industrially, or working capital funded) and the degree to which those expenditures align with agency priorities. Going beyond simply targeting cuts to transforming agency economics also calls for leaders to analyze and understand what drives agency costs before they can explore potential structural cost management opportunities.

Efficiency and cost benchmarking:

Our traditional cost management approaches typically disaggregates the enterprise into discrete pieces such as a cost category or a particular process or purchased commodity. Proven methods and tools are then applied to drive out costs by improving productivity, leveraging scale, eliminating waste, and so on. Continuous incremental improvement then allows for future gains.

In addition to our team of analysts, we can draw on a range of individuals who are have expertise in relevant aspects of government costing and key performance indicators. 

Next-generation cost management:

A new era of digital tools is ushering in the next generation of cost management. In the past, when tasks were automated, the reduction in variable costs often came with high investment costs. Expertise was greatly valued but was difficult to scale as it resided with specific individuals and their experiences.

 

Today, we utilize newly developed digital tools to change the fundamentals of mission economics and work, enabling government agencies to do more with less. These flexible tools can be used to both enhance existing operations and enable entirely new approaches.

Among the most promising government opportunities in cost management are newly emerging applications in: 1) analytics and cognitive solutions, including both analytics (potentially supported by artificial intelligence, or AI) to increase effectiveness, and robotics to automate and augment labor; and 2) digitizing government, which includes cloud computing and, potentially, blockchain.

 

Our expert network can advise Government leaders and help take advantage of these developments and transform the economics of mission delivery.

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