Paul Jackson
The approach adopted by the Cost Architecture Framework also finds sympathies in the‘ lean accounting’ literature. McNair( 2007), for example, makes the point that lean management is defined within a process structure( or‘ value streams’). Activities, he notes, have to be knitted together to create a horizontal flow of value creation. For this reason lean practitioners have emphasised the importance of‘ value stream accounting’, in contrast to traditional‘ top down’ costing methods( for example, Cooper and Maskell 2007).
In this sense, the approach adopted by the Cost Architecture Framework has more in common with lean practitioners than early advocates of ABC, whose main interest was achieving a better allocation of indirect costs to final cost objects. As mentioned above, users of the Cost Architecture have tended to focus on staffrelated costs( using time as the key cost driver). In a local authority this reflects the fact that certain attributes of ABC are of little use anyway. For example, because of the service nature of the work, there is little‘ batching’( whose set‐ups might drive costs). And while some services are charged for, pricing and product mix are not major concerns. Furthermore ‐ and as the later work by Cooper and Kaplan( 1991) noted when introducing their hierarchy of costs ‐ you can do little about certain overheads, especially in the short term.
What is particularly noteworthy about the Cost Architecture Framework, however, is the desire to achieve some kind of standardisation. For a start, the Service Reporting Code of Practice is used to categorise costs. Services are described using the Local Government Services List( LGSL), with the‘ business process architecture’ employed to achieve consistency and comparability when measuring processes. Even an activity dictionary is emerging. Moreover, a shared infrastructure – in the form of the online calculator – is available for collating and sharing measurements.
Of course, practitioners cannot afford to lose sight of why these techniques have been used in the first place. As the‘ theory of enacted systems’ posits, accounting and performance measurement should be seen as subsystems that support an integrated approach to product and service delivery( Stenzel 2007, p. xvii). Fortunately, the very evolution of the Cost Architecture Framework and supporting tools has explicitly been seen as part of an improvement ecosystem, bound up with process‐based techniques. The challenge remains, therefore, to see the techniques and tools involved, not as ends in themselves, but as the means of generating information that will support e‐Government through better process designs, more efficient ways of working and more effective customer services.
References
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